Summary#

Bill C-34 updates the Investment Canada Act to tighten and speed up national security reviews of foreign investments. It adds a pre-closing notice and waiting period for certain deals, lets the Minister set interim conditions during a review, expands who can be reviewed (including some minority investments and state‑owned enterprises), raises penalties, and allows limited information sharing with allies. Most provisions take effect on dates set by Cabinet order (Coming into Force).

• Requires some foreign investors to notify the government before closing and to wait while initial security checks run (s. 12(1)(a), 12(2)).
• Lets the Minister impose interim conditions during a review to prevent harm (s. 25.3(1.1)).
• Expands review to certain minority investments that grant access to sensitive assets or non‑public technical information, or special governance rights (s. 11(1)(c)).
• Makes more state‑owned enterprise (SOE) deals reviewable even below normal thresholds (s. 15(2); s. 25.1(b.1)).
• Raises penalties up to the greater of $500,000 and a prescribed amount for failing to pre‑notify, and up to the greater of $25,000/day and a prescribed amount for other breaches (s. 40(2)(d)).
• Allows undertakings (binding promises) to mitigate risks, and protects sensitive information in any court review (s. 25.3(6)(c); s. 25.7).

What it means for you#

• Households

  • No direct new obligations. Effects are indirect, through how the government screens foreign investments. Data on prices, wages, or service levels is unavailable.

• Workers

  • If you work in sensitive sectors (to be prescribed by regulation), foreign acquisitions or investments may face pre‑closing notice, waiting periods, interim conditions, or blocks (s. 12(1)(a); s. 25.3(1), (1.1)).
  • Reviews must now consider impacts on intellectual property funded by the Government of Canada and the use and protection of Canadians’ personal information (s. 20(c), 20(e)).

• Canadian businesses

  • If your business is in a prescribed sector, or a deal gives a non‑Canadian access to “material non‑public technical information” or “material assets,” and board/management nomination or special rights, the investor must pre‑notify and wait before closing (s. 11(1)(c); s. 12(1)(a), 12(2)). Definitions of “material assets” and “material non‑public technical information” will be set by regulation (s. 11(2)).
  • During review, you may face interim conditions (for example, limits on data access) until the review ends (s. 25.3(1.1)).
  • You and the investor can offer undertakings to mitigate national security risks; the Minister can approve the deal based on those undertakings and can later adjust or release them (s. 25.3(6)(c); s. 25.31).
  • You may be required to provide information to the Minister during a review (s. 25.11; s. 25.12; s. 25.5).

• Non‑Canadian investors (including funds)

  • Pre‑closing notice and a standstill are required for certain investments; closing before the waiting periods expire is prohibited (s. 12(1)(a), 12(2); s. 25.2(1); s. 25.3(1)).
  • Certain minority investments are now in scope if they grant governance rights or access to sensitive assets or non‑public technical information (s. 11(1)(c)).
  • SOE deals face broader review, including asset acquisitions, even below normal review thresholds (s. 15(2); s. 25.1(b.1)).
  • A prior conviction for an act of corruption, inside or outside Canada, by itself gives the Minister reasonable grounds to issue an initial notice (s. 25.2(1.1)).
  • Penalties for non‑compliance are higher, including up to the greater of $500,000 and a prescribed amount for failing to pre‑notify, and up to the greater of $25,000/day and a prescribed amount for other breaches (s. 40(2)(d)).
  • Sensitive information can be protected in any judicial review; the court may consider evidence not fully disclosed to you, but must provide a summary that reasonably informs you of the case (s. 25.7).

• Provinces and local governments

  • In “net benefit” reviews, compatibility with provincial policy objectives remains a factor, now with explicit references to personal information protection and federally funded IP (s. 20(c), 20(e)). No new direct mandates.

Expenses#

Estimated net cost: Data unavailable.

• No explicit appropriation is in the bill. Administration and enforcement costs for the federal government are not stated. Data unavailable.
• The bill adjusts penalties and enforcement tools (potential revenues depend on future enforcement). Key monetary changes:

Proponents' View#

• Modernizes screening to capture sensitive minority investments that grant access to critical assets or non‑public technical information, closing known gaps (s. 11(1)(c); s. 11(2)).
• Reduces risk between signing and closing by requiring pre‑closing notice and a standstill for higher‑risk deals, allowing issues to be addressed before harm occurs (s. 12(1)(a), 12(2); s. 25.2, 25.3).
• Interim conditions prevent injury during reviews (for example, limiting data or facility access) and are quicker to deploy (s. 25.3(1.1)).
• Undertakings create a flexible path to mitigate risks while allowing beneficial investment to proceed; the Minister can accept, adjust, or release undertakings as circumstances change (s. 25.3(6)(c); s. 25.31).
• Stronger enforcement and clearer court procedures improve compliance and protect sensitive information, while ensuring the investor receives a summary of the case (s. 40(2)(d); s. 25.7).
• Better coordination with allies through limited information sharing with foreign investment review agencies enhances cross‑border security screening (s. 36(3.1)(c)).
• Explicit attention to federally funded IP and Canadians’ personal information strengthens protection of key assets and data (s. 20(c), 20(e)).

Assumptions to note: That pre‑notification and interim conditions will be applied proportionally and will not deter benign investment. Data on deterrence effects is unavailable.

Opponents' View#

• Regulatory uncertainty: key terms like “material assets” and “material non‑public technical information” will be defined later by regulation, leaving businesses unsure what triggers pre‑notice and review (s. 11(2)).
• Broader discretion and limited appeal: ministerial and Governor in Council decisions are final except for judicial review, which can rely on evidence not fully disclosed to the investor, reducing transparency (s. 25.6; s. 25.7).
• Transaction delays and costs: pre‑closing notice, standstills, and interim conditions can slow deals, complicate financing, and increase legal/compliance costs, especially in fast‑moving sectors (s. 12(2); s. 25.3(1.1)). Quantified impacts unavailable.
• Chilling effect on investment by SOEs and minority investors: more SOE and minority deals are reviewable or notifiable, even for asset purchases, which could reduce capital inflows in targeted sectors (s. 15(2); s. 25.1(b.1); s. 11(1)(c)). Evidence on magnitude is unavailable.
• Information sharing and confidentiality risks: allowing disclosure of otherwise privileged information to foreign states may raise confidentiality concerns despite terms and conditions (s. 36(3.1)(c)).
• High penalties and open‑ended review start (“when it comes to the Minister’s attention”) may increase risk for routine transactions and create uncertainty about timing (s. 40(2)(d); s. 25.11).

Assumptions to note: That broader scope and stronger penalties will materially deter investment; the bill does not provide empirical estimates. Data unavailable.