Pursuant to Part IV.1 of the Investment Canada Act, the Canadian government can review foreign investment that could be injurious to national security. Under this Part of the Act, if national security threats associated with investments in Canada by non-Canadians are identified, primarily by Canada's security and intelligence agencies, they will be brought to the attention of the Minister of Industry. Once identified, the Minister of Industry, after consultation with the Minister of Public Safety and Emergency Preparedness is responsible for deciding whether to refer these investments to the Governor in Council (GIC). The GIC is responsible for determining whether a review should be ordered. Once the GIC orders a review, the Minister of  Industry, after consultation with the Minister of Public Safety and Emergency Preparedness, conducts the review and, if required, submits a report to the GIC with recommendations. The GIC has the authority to take any measures in respect of the investment that it considers advisable to protect national security.
On 18 April 2020, the Canadian Government published a Policy Statement on Foreign Investment Review and COVID-19 that announces "enhanced scrutiny" of "foreign direct investments of any value, controlling or non-controlling, in Canadian businesses that are related to public health or involved in the supply of critical goods and services to Canadians or to the Government". This measure was taken, according to the Canadian government in response to "opportunistic investment behaviour" caused by declines in valuations of Canadian businesses as well as by investment of state-owned enterprises that "may be motivated by non-commercial imperatives that could harm Canada's economic or national security interests, a risk that is amplified in the current context". The approach is temporary until the economy has recovered from the fallout of the COVID-19 pandemic.
On 27 July 2020, the Time Limits and Other Periods Act (COVID-19) entered into force. The Act expands certain time limits for administrative processes in light of the Coronavirus pandemic. On 31 July 2020, the Order Respecting Time Limits and Other Periods Established By or Under Certain Acts and Regulations for Which the Minister of Industry is Responsible (COVID-19) was issued based on the Act. Among others, it extends the initial review period under the National Security Review of Investments Regulations for any investments notified between 31 July 2020 and 31 December 2020 and by extending the time given to the Minister to take action for investments that are subject to the Investment Canada Act but do not require a filing.
On 24 March 2021, the Canadian Government issued updated Guidelines on the National Security Review of Investments under the Investment Canada Act. Such Guidelines had first been made public in December 2016. Among others, the revised Guidelines identify sensitive technology areas, critical minerals, sensitive personal data and investments by state-owned or state-influenced investors as areas of heightened scrutiny by Canadian authorities when assessing whether an investment poses a security risk.
On 8 March 2022, Canadian authorities published a Policy Statement announcing an adjustment of administrative practice and controls in relation to foreign acquisitions controlled by or subject to influence by the Russian Federation. According to the Statement, the existence of ties between the investment and an individual or entity associated with, controlled by or subject to influence by the Russian State constitutes a ground to assess that the investment could be harmful to national security. Foreign investors are thus asked to identify the components of proposed transactions holding such ties.
On 2 August 2022, the Regulations Amending the National Security Review of Investments Regulations came into force. These Regulations provide an option for non-Canadian investors to obtain pre-implementation regulatory certainty with respect to a national security review of investment that do not require a filing under the Investment Canada Act (ICA). Where a voluntary filing is submitted, non-Canadian investors benefit from a shorter period of 45 days (as compared to five years) during which the Canadian Government must initiate a national security review.
"Prescribed Periods
Minister's notice
2 For the purposes of subsection 25.2(1) of the Act, the prescribed period is [...]
(c) in respect of an investment referred to in paragraph 25.1(c) of the Act, the period beginning on the day on which the investment first comes to the Minister's attention and ending on the earlier of
(i) 45 days after the day on which the required information set out in the schedule, or reasons for the inability to provide any part of the required information, has been received by the Minister, as certified by the Minister, and
(ii) 5 years after the day on which the investment is implemented.
[...]
Order for review
4 For the purposes of subsection 25.3(1) of the Act, the prescribed period is [...]
(iii) in respect of an investment referred to in paragraph 25.1(c) of the Act, the period beginning on the day on which the investment first comes to the Minister's attention and ending on the earlier of
(A) 45 days after the day on which the required information set out in the schedule, or reasons for the inability to provide any part of the required information, has been received by the Minister, as certified by the Minister, and
(B) 5 years after the day on which the investment is implemented [...]" (National Security Review of Investments Regulations (SOR/2009-271), last amended 2022-08-02, Sections 2 and 4)
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"1. The following Guidelines are issued under section 38 of the Investment Canada Act ('the Act') by the Minister of Innovation, Science and Industry ('the Minister'), who is the Minister responsible for the administration of the Act. These Guidelines inform investors of procedures that will be followed in the administration of the national security review process set out in Part IV.1 of the Act and in the National Security Review of Investments Regulations ('the Regulations'). [...]
2. Section 25.1 of the Act identifies the scope of investments by non-Canadians, whether implemented or proposed, that may be subject to national security review under Part IV.1. These are: the establishment of a new Canadian business or an entity carrying on operations in Canada; acquisitions of control of a Canadian business of any dollar value; and acquisitions of all or part of an entity carrying on operations in Canada. [...]
4. Under Part IV.1 of the Act, proposed or implemented investments are evaluated on the basis of the facts related to the investment, which may include sensitive information, including as defined in section 38 of the Canada Evidence Act. Investors and the other parties involved in an investment that is, or may be, subject to a national security review under section 25.3 are notified in a timely manner as required by the Act and the Regulations. If an order for review of an investment is made by the Governor in Council, the Act provides the opportunity for the non-Canadian or other parties to make representations to the Minister. Throughout this process, commercial information is protected by the strict confidentiality provisions contained in the Act. Sensitive information is protected under the Canada Evidence Act and other applicable laws. National security considerations may restrict the degree to which the Government can share information with the investor and others in this context.
[...]
7. In particular, some investments into Canada by state-owned enterprises may be motivated by non-commercial imperatives that could harm Canada's national security. The Government will subject all foreign investments by state-owned investors, or private investors assessed as being closely tied to or subject to direction from foreign governments, to enhanced scrutiny under Part IV.1, regardless of the value of the investment.
8. For the purposes of making determinations under Part IV.1 of the Act, the Minister or Governor in Council may take into account factors including but not limited to the following as they relate to national security:
i. The potential effects of the investment on Canada's defence capabilities and interests, including but not limited to the defence industrial base and defence establishments;
ii. The potential effects of the investment on the transfer of sensitive technology or know-how outside of Canada, including consideration of whether the investment provides access to information not in the public domain related to the research, design or manufacture of sensitive technologies. Sensitive technology areas include those that have military, intelligence or dual military/civilian applications. Such technologies may be developed in multiple fields, including, but not limited to those listed at Annex A. The list at Annex A may be updated periodically in accordance with the evolution of technologies, the military and intelligence applications of technology, and national security imperatives;
iii. Involvement in the research, manufacture or sale of goods/technology identified in Section 35 of the Defence Production Act;
iv. The potential impact of the investment on the supply of critical goods and services to Canadians, or the supply of goods and services to the Government of Canada;
v. The potential impact of the investment on critical minerals and critical mineral supply chains. For more information, please consult the Government of Canada's Critical Minerals List;
vi. The potential impact of the investment on the security of Canada's critical infrastructure. Critical infrastructure refers to processes, systems, facilities, technologies, networks, assets and services essential to the health, safety, security or economic well-being of Canadians and the effective functioning of government. For more information on Canada's critical infrastructure, see National Strategy for Critical Infrastructure and Action Plan for Critical Infrastructure;
vii. The potential of the investment to enable foreign surveillance or espionage;
viii. The potential of the investment to hinder current or future intelligence or law enforcement operations;
ix. The potential impact of the investment on Canada's international interests, including foreign relationships;
x. The potential of the investment to involve or facilitate the activities of illicit actors, such as terrorists, terrorist organizations, organized crime or corrupt foreign officials; and,
xi. The potential of the investment to enable access to sensitive personal data that could be leveraged to harm Canadian national security through its exploitation, including, but not limited to:
a. personally identifiable health or genetic (e.g., health conditions or genetic test results);
b. biometric (e.g., fingerprints);
c. financial (e.g., confidential account information, including expenditures and debt);
d. communications (e.g., private communications);
e. geolocation; or,
f. personal data concerning government officials; including members of the military or intelligence community." (Guidelines on the National Security Review of Investments, March 24, 2021)
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"Definitions
3 In this Act, [...]
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 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)
[...]
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)
[...]
PART II - Exemptions [...]
Exempt transactions — Part IV.1
10 (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.
[...]
PART IV.1 - Investments Injurious to National Security
Application
25.1 This Part applies in respect of an investment, implemented or proposed, by a non-Canadian
(a) to establish a new Canadian business;
(b) to acquire control of a Canadian business in any manner described in subsection 28(1); or
(c) to acquire, in whole or in part, or to establish an entity carrying on all or any part of its operations in Canada if the entity has
(i) a place of operations in Canada,
(ii) an individual or individuals in Canada who are employed or self-employed in connection with the entity's operations, or
(iii) assets in Canada used in carrying on the entity's operations.
Notice
25.2 (1) If the Minister has reasonable grounds to believe that an investment by a non-Canadian could be injurious to national security, the Minister may, within the prescribed period, send to the non-Canadian a notice that an order for the review of the investment may be made under subsection 25.3(1).
[...]
Reviewable investments
25.3 (1) An investment is reviewable under this Part if the Minister, after consultation with the Minister of Public Safety and Emergency Preparedness, considers that the investment could be injurious to national security and the Governor in Council, on the recommendation of the Minister, makes an order within the prescribed period for the review of the investment.
Notice
(2) The Minister shall, without delay after the order has been made, send to the non-Canadian making the investment and to any person or entity from which the Canadian business or the entity referred to in paragraph 25.1(c) is being acquired, a notice indicating that an order for the review of the investment has been made and advising them of their right to make representations to the Minister.
Condition for investment
(3) If a non-Canadian has not implemented a proposed investment when they receive a notice under subsection (2), they shall not implement the investment unless they receive
(a) a notice under paragraph (6)(b) indicating that no further action will be taken in respect of the investment; or
(b) a copy of an order made under section 25.4 authorizing the investment to be implemented.
[...]
Governor in Council's powers
25.4 (1) On the referral of an investment under paragraph 25.3(6)(a) or subsection 25.3(7), the Governor in Council may, by order, within the prescribed period, take any measures in respect of the investment that he or she considers advisable to protect national security, including
(a) directing the non-Canadian not to implement the investment;
(b) authorizing the investment on condition that the non-Canadian
(i) give any written undertakings to Her Majesty in right of Canada relating to the investment that the Governor in Council considers necessary in the circumstances, or
(ii) implement the investment on the terms and conditions contained in the order; or
(c) requiring the non-Canadian to divest themselves of control of the Canadian business or of their investment in the entity.
[...]
PART V - Rules and Presumptions
Manner of acquiring control
28 (1) For the purposes of this Act, a non-Canadian acquires control of a Canadian business only by
(a) the acquisition of voting shares of a corporation incorporated in Canada carrying on the Canadian business;
(b) the acquisition of voting interests of an entity that
(i) is carrying on the Canadian business, or
(ii) controls, directly or indirectly, another entity carrying on the Canadian business,
where there is no acquisition of control of any corporation;
(c) the acquisition of all or substantially all of the assets used in carrying on the Canadian business; or
(d) the acquisition of voting interests of an entity that controls, directly or indirectly, an entity in Canada carrying on the Canadian business, where
(i) there is no acquisition of control, directly or indirectly, of a corporation incorporated elsewhere than in Canada that controls, directly or indirectly, an entity in Canada carrying on the Canadian business, or
(ii) there is an acquisition of control described in subparagraph (i).
Rules and presumptions respecting control of entities
(2) Subject to subsections (4) to (5), (6.1) and (6.2), for the purposes of this Act,
(a) where one entity controls another entity, it is deemed to control indirectly any entity or entities controlled directly or indirectly by that other entity;
(b) an entity controls another entity directly
(i) where the controlling entity owns a majority of the voting interests of the other entity, or
(ii) where the other entity is a corporation and the controlling entity owns less than a majority of the voting shares of the corporation but controls the corporation in fact through the ownership of one-third or more of its voting shares;
(c) entities that are controlled, directly or indirectly, by the same entity are deemed to be associated with each other, with any other entities controlled by any one or combination of them and with the entity or entities that control them; and
(d) where entities that are associated pursuant to paragraph (c) own voting interests of the same entity, the associated entities may be treated as one entity for the purposes of establishing direct or indirect control of the entity in which they own voting interests.
Presumptions respecting acquisition of control
(3) Subject to subsections (4) to (5), (6.1) and (6.2), for the purposes of this Act,
(a) the acquisition of a majority of the voting interests of an entity or of a majority of the undivided ownership interests in the voting shares of an entity that is a corporation is deemed to be acquisition of control of that entity;
(b) the acquisition of less than a majority of the voting interests of an entity other than a corporation is deemed not to be acquisition of control of that entity;
(c) the acquisition of less than a majority but one-third or more of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and
(d) the acquisition of less than one-third of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is deemed not to be acquisition of control of that corporation.[...]" (Investment Canada Act (R.S.C., 1985, c. 28 (1st Supp.)), last amended on 2021-04-01, Sections 3, 10, 11, 14, 14.1, 14.11, 15, 16, 20, 21, 23, 24, 25.1, 25.3, 25.4 and 28)
National Security Review of Investments Regulations (SOR/2009-271), last amended 2022-08-02, Sections 2 and 4
Guidelines on the National Security Review of Investments, March 24, 2021
Investment Canada Act (R.S.C., 1985, c. 28 (1st Supp.)), as last amended on 2021-04-01
Government of Canada, Policy Statement on Foreign Investment Review and COVID-19 (18 April 2020, modified 19 April 2020)
Time Limits and Other Periods Act (COVID-19) (S.C. 2020, c. 11, s. 11), in force from 27 July 2020
Order Respecting Time Limits and Other Periods Established By or Under Certain Acts and Regulations for which the Minister of Industry is Responsible (COVID-19) (S.C. 2020, c. 11, s. 11), of 31 July 2020
Government of Canada, Policy Statement on Foreign Investment Review and the Ukraine Crisis (8 March 2022)

[<a href="https://laws-lois.justice.gc.ca/eng/regulations/sor-2009-271/page-1.html">Reg</a>],[<a href="https://ised-isde.canada.ca/site/investment-canada-act/en/investment-canada-act/guidelines/guidelines-national-security-review-investments">Guidelines</a>],[<a href="https://laws-lois.justice.gc.ca/eng/acts/I-21.8/">Act</a>],[<a href="https://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/lk81224.html">Policy Statement</a>],[<a href="https://laws.justice.gc.ca/eng/acts/T-11.1/page-1.html">Act</a>],[<a href="http://www.ic.gc.ca/eic/site/693.nsf/eng/h_00184.html">Order</a>],[<a href="https://ised-isde.canada.ca/site/investment-canada-act/en/investment-canada-act/policy-statement-foreign-investment-review-and-ukraine-crisis">Policy Statement</a>]