Non-Canadian investor (Investment Canada Act)

A foreign or foreign-controlled buyer meets this term first when working out whether the Act applies. Section 3 defines a non-Canadian as an individual, a government or an agency of one, or an entity that is not a Canadian. “Canadian” is defined separately in s. 3; it includes a Canadian citizen and an entity that is Canadian-controlled as determined under s. 26, subject to the conditions stated there.

How control is decided

• Under s. 26(1)(a), where one Canadian, or two or more members of a voting group who are Canadians, own a majority of the voting interests of an entity, it is a Canadian-controlled entity.
• Under s. 26(1)(b), where paragraph (a) does not apply and one non-Canadian, or two or more members of a voting group who are non-Canadians, own a majority of the voting interests, it is not a Canadian-controlled entity.
• Paragraphs (c) and (d) deal with the remaining cases. Section 26(1) is subject to subsections (2.1) to (2.2), (2.31) and (2.32), under which the Minister may determine or declare that an entity is not Canadian-controlled.

What to ask

Ask who owns the voting interests of the buyer at each level, and whether the investment is subject to notification or review. See the review threshold for a foreign buyer and Investment Canada Act notification. This entry describes the federal Act only.