Investment Canada Act (R.S.C., 1985, c. 28 (1st Supp.))

Short Title

Marginal note:Short title

1 This Act may be cited as the Investment Canada Act.

Purpose

Marginal note:Purpose of Act

2 Recognizing that increased capital and technology benefits Canada, and recognizing the importance of protecting national security, the purposes of this Act are to provide for the review of significant investments in Canada by non-Canadians in a manner that encourages investment, economic growth and employment opportunities in Canada and to provide for the review of investments in Canada by non-Canadians that could be injurious to national security.

Definitions

Marginal note:Definitions

3 In this Act,

Agency

Agency[Repealed, 1995, c. 1, s. 45]

assets

assets includes tangible and intangible property of any value; (actifs)

business

business includes any undertaking or enterprise capable of generating revenue and carried on in anticipation of profit; (entreprise)

Canada

Canada includes the exclusive economic zone of Canada and the continental shelf of Canada; (Canada)

Canadian

Canadian means

• (a) a Canadian citizen,

• (b) a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act who has been ordinarily resident in Canada for not more than one year after the time at which he or she first became eligible to apply for Canadian citizenship,

• (c) a Canadian government, whether federal, provincial or local, or an agency thereof, or

• (d) an entity that is Canadian-controlled, as determined under subsection 26(1) or (2) and in respect of which there has been no determination made under any of subsections 26(2.1), (2.11) and (2.31) or declaration made under subsection 26(2.2) or (2.32); (Canadien)

Canadian business

Canadian business means a business carried on in Canada that has

• (a) a place of business in Canada,

• (b) an individual or individuals in Canada who are employed or self-employed in connection with the business, and

• (c) assets in Canada used in carrying on the business; (entreprise canadienne)

corporation

corporation means a body corporate with or without share capital; (personne morale)

Director

Director means the Director of Investments appointed under section 6; (directeur)

entity

entity means a corporation, partnership, trust or joint venture; (unité)

joint venture

joint venture means an association of two or more persons or entities, where the relationship among those associated persons or entities does not, under the laws in force in Canada, constitute a corporation, a partnership or a trust and where, in the case of an investment to which this Act applies, all the undivided ownership interests in the assets of the Canadian business or in the voting interests of the entity that is the subject of the investment are or will be owned by all the persons or entities that are so associated; (coentreprise)

Minister

Minister means such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act; (ministre)

new Canadian business

new Canadian business, in relation to a non-Canadian, means a business that is not already being carried on in Canada by the non-Canadian and that, at the time of its establishment,

• (a) is unrelated to any other business being carried on in Canada by that non-Canadian, or

• (b) is related to another business being carried on in Canada by that non-Canadian but falls within a prescribed specific type of business activity that, in the opinion of the Governor in Council, is related to Canada’s cultural heritage or national identity; (nouvelle entreprise canadienne)

non-Canadian

non-Canadian means an individual, a government or an agency thereof or an entity that is not a Canadian; (non-Canadien)

own

own means beneficially own; (propriétaire)

person

person means an individual, a government or an agency thereof or a corporation; (personne)

prescribed

prescribed means prescribed by the regulations made pursuant to this Act; (Version anglaise seulement)

state-owned enterprise

state-owned enterprise means

• (a) the government of a foreign state, whether federal, state or local, or an agency of such a government;

• (b) an entity that is controlled or influenced, directly or indirectly, by a government or agency referred to in paragraph (a); or

• (c) an individual who is acting under the direction of a government or agency referred to in paragraph (a) or who is acting under the influence, directly or indirectly, of such a government or agency; (entreprise d’État)

voting group

voting group means two or more persons who are associated with respect to the exercise of rights attached to voting interests in an entity by contract, business arrangement, personal relationship, common control in fact through the ownership of voting interests, or otherwise, in such a manner that they would ordinarily be expected to act together on a continuing basis with respect to the exercise of those rights; (groupement de votants)

voting interest

voting interest, with respect to

• (a) a corporation with share capital, means a voting share,

• (b) a corporation without share capital, means an ownership interest in the assets thereof that entitles the owner to rights similar to those enjoyed by the owner of a voting share, and

• (c) a partnership, trust or joint venture, means an ownership interest in the assets thereof that entitles the owner to receive a share of the profits and to share in the assets on dissolution; (intérêt avec droit de vote)

voting share

voting share means a share in the capital of a corporation to which is attached a voting right ordinarily exercisable at meetings of shareholders of the corporation and to which is ordinarily attached a right to receive a share of the profits, or to share in the assets of the corporation on dissolution, or both. (action avec droit de vote)

PART IOrganization and Mandate

Minister

Marginal note:Role of Minister

4 The Minister is responsible for the administration of this Act.

Marginal note:Duties and powers of Minister

• 5 (1) The Minister shall

  • (a) to (e) [Repealed, 1995, c. 1, s. 47]

  • (f) ensure that the notification and review of investments are carried out in accordance with this Act; and

  • (g) perform all other duties required by this Act to be performed by the Minister.

• Marginal note:Other powers

  (2) In exercising the Minister’s powers and performing his duties under this Act, the Minister

  • (a) shall, where appropriate, make use of the services and facilities of other departments, branches or agencies of the Government of Canada;

  • (b) may, with the approval of the Governor in Council, enter into agreements, for the purposes of this Act, with the government of any province or any agency thereof, or with any other entity or person, and may make disbursements up to an amount equal to the aggregate of the amounts to be contributed by all parties to the agreement, even before those amounts have been contributed; and

  • (c) may consult with, and organize conferences of, representatives of industry and labour, provincial and local authorities and other interested persons.

Director of Investments

Marginal note:Director of Investments

6 The Minister may appoint an officer, to be known as the Director of Investments, to advise and assist the Minister in exercising the Minister’s powers and performing the Minister’s duties under this Act.

7 to 9 [Repealed, 1995, c. 1, s. 48]

PART IIExemptions

Marginal note:Exempt transactions

• 10 (1) This Act, other than Part IV.1, does not apply in respect of

  • (a) the acquisition of voting shares or other voting interests by any person in the ordinary course of that person’s business as a trader or dealer in securities;

  • (b) the acquisition of voting interests by any person in the ordinary course of a business carried on by that person that consists of providing, in Canada, venture capital on terms and conditions not inconsistent with such terms and conditions as may be fixed by the Minister;

  • (c) the acquisition of control of a Canadian business in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of this Act, if the acquisition is subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act;

  • (d) the acquisition of control of a Canadian business for the purpose of facilitating its financing and not for any purpose related to the provisions of this Act on the condition that the acquirer divest himself of control within two years after it is acquired or within such longer period as is approved by the Minister;

  • (e) the acquisition of control of a Canadian business by reason of an amalgamation, a merger, a consolidation or a corporate reorganization following which the ultimate direct or indirect control in fact of the Canadian business, through the ownership of voting interests, remains unchanged;

  • (f) the acquisition of control of a Canadian business carried on by an agent of Her Majesty in right of Canada or a province or by a Crown corporation within the meaning of the Financial Administration Act;

  • (g) the acquisition of control of a Canadian business carried on by a corporation the taxable income of which is exempt from tax under Part I of the Income Tax Act by virtue of paragraph 149(1)(d) of that Act;

  • (h) any transaction to which Part XII.01 of the Bank Act applies;

  • (i) the involuntary acquisition of control of a Canadian business on the devolution of an estate or by operation of law;

  • (j) the acquisition of control of a Canadian business by

    • (i) an insurance company incorporated in Canada that is a company or a provincial company to which the Insurance Companies Act applies, on the condition that the gross investment revenue of the company from the Canadian business is included in computing the income of the company under subsection 138(9) of the Income Tax Act,

    • (ii) a foreign entity that has been approved by order of the Superintendent of Financial Institutions under Part XIII of the Insurance Companies Act to insure in Canada risks, on the condition that the gross investment revenue of the company from the Canadian business is included in computing the income of the company under subsection 138(9) of the Income Tax Act and the voting interests of the entity carrying on the Canadian business, or the assets used in carrying on the Canadian business, are vested in trust under that Part, or

    • (iii) a corporation incorporated in Canada, all the issued voting shares of which, other than the qualifying voting shares of directors, are owned by an insurance company described in subparagraph (i), a foreign entity described in subparagraph (ii) or by a corporation controlled directly or indirectly through the ownership of voting shares by such an insurance company or foreign entity, on the condition that, in the case of a foreign entity described in subparagraph (ii), the voting interests of the entity carrying on the Canadian business, or the assets used in carrying on the Canadian business, are vested in trust under Part XIII of the Insurance Companies Act; and

  • (k) the acquisition of control of a Canadian business the revenue of which is generated from farming carried out on the real property acquired in the same transaction.

• Marginal note:Exempt transactions — Part IV

  (1.1) Part IV does not apply in respect of the acquisition of control of a Canadian business in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of this Act, if the acquisition is not subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act.

• Marginal note:Exempt transactions — Part IV.1

  (2) Part IV.1 does not apply in respect of

  • (a) the acquisition of control of a Canadian business in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of this Act, if the acquisition is subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act;

  • (b) the acquisition of control of a Canadian business by reason of an amalgamation, a merger, a consolidation or a corporate reorganization following which the ultimate direct or indirect control in fact of the Canadian business, through the ownership of voting interests, remains unchanged, if the acquisition is subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act;

  • (c) the acquisition of control of a Canadian business carried on by an agent of Her Majesty in right of Canada or a province or by a Crown corporation within the meaning of the Financial Administration Act;

  • (d) any transaction to which Part XII.01 of the Bank Act applies; or

  • (e) the acquisition of control of a Canadian business by any of the following entities, if the acquisition is subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act:

    • (i) an insurance company incorporated in Canada that is a company or a provincial company to which the Insurance Companies Act applies, on the condition that the gross investment revenue of the company from the Canadian business is included in computing the income of the company under subsection 138(9) of the Income Tax Act,

    • (ii) a foreign entity that has been approved by order of the Superintendent of Financial Institutions under Part XIII of the Insurance Companies Act to insure in Canada risks, on the condition that the gross investment revenue of the company from the Canadian business is included in computing the income of the company under subsection 138(9) of the Income Tax Act and the voting interests of the entity carrying on the Canadian business, or the assets used in carrying on the Canadian business, are vested in trust under that Part, or

    • (iii) a corporation incorporated in Canada, all the issued voting shares of which, other than the qualifying voting shares of directors, are owned by an insurance company described in subparagraph (i), by a foreign entity described in subparagraph (ii) or by a corporation controlled directly or indirectly through the ownership of voting shares by such an insurance company or foreign entity, on the condition that, in the case of a foreign entity described in subparagraph (ii), the voting interests of the entity carrying on the Canadian business, or the assets used in carrying on the Canadian business, are vested in trust under Part XIII of the Insurance Companies Act.

• Marginal note:If condition not complied with

  (3) If any condition referred to in paragraph (1)(d) or (j) or (2)(e) is not complied with, the exemption under that paragraph does not apply and the transaction referred to in that paragraph is subject to this Act as if it had never been exempt.