National security review (Investment Canada Act)

A foreign buyer meets this separately from the net benefit review. Section 25.1 says Part IV.1 applies to an investment, implemented or proposed, by a non-Canadian to establish a new Canadian business, to acquire control of a Canadian business in a manner described in s.28(1), or to acquire, in whole or in part, or establish an entity carrying on any part of its operations in Canada if it has a place of operations, workers or assets used in its operations in Canada. That section sets no value test. Compare the review threshold and the net benefit review.

How it runs

Under s.25.2, the Minister may, within the prescribed period, send a notice that an order for review may be made. A non-Canadian who has not implemented the investment when the notice arrives may not do so unless it receives a notice that consideration is complete or an order authorizing it. Under s.25.3(1), if the Minister, after consulting the Minister of Public Safety and Emergency Preparedness, considers the investment could be injurious to national security, the Minister must order further review. On a referral, s.25.4 lets the Governor in Council take measures it considers advisable to protect national security, including directing that the investment not be implemented, authorizing it on terms, or requiring divestiture. Section 10(2) lists transactions to which Part IV.1 does not apply. The Regulations set the prescribed periods.

What to ask

• Whether the buyer is a non-Canadian under the Act
• Whether the deal fits one of the three kinds of investment in s.25.1
• Whether the purchase agreement addresses delay or conditions from a review