Hadri Law is an Investment Canada Act lawyer team in Toronto advising non-Canadian investors on notifications, net benefit reviews, and national security reviews under the Investment Canada Act. Our boutique practice delivers counsel in English, French, Spanish, and Catalan from First Canadian Place in the heart of Toronto's financial district -- a practical advantage for investors from the United States, Europe, Latin America, and North Africa.

Call (437) 974-2374 for a free consultation | Counsel in English, French, Spanish, Catalan

Why Foreign Investors in Canada Need Investment Canada Act Counsel

Every non-Canadian acquiring control of a Canadian business -- or establishing a new unrelated Canadian business -- encounters the Investment Canada Act. Most inbound transactions will require at minimum a Notification filing under Part III of the Act. A smaller subset crosses the monetary thresholds that trigger a full Application for Review under Part IV, and a growing number trigger a national security review under Part IV.1.

The consequences of getting this wrong are not abstract. Daily penalties accrue under section 40. Courts can order divestiture. The Governor in Council can block a transaction outright on national security grounds. With Bill C-34's 2024 amendments adding new ministerial authority and modernizing the review framework, the Investment Canada Act is a more active and intrusive regime than it was five years ago.

Our founder, Nassira El Hadri, holds an LLM in Canadian Common Law from Osgoode Hall Law School and a Master's in International Business Law from Universite de Perpignan Via Domitia -- a credential set specifically suited to cross-border foreign investment work. We advise foreign investors, in-house counsel of non-Canadian acquirers, and co-counsel teams serving sophisticated international clients.

What Is the Investment Canada Act?

The Investment Canada Act (ICA) is the federal statute -- R.S.C. 1985, c. 28 (1st Supp.) -- that governs foreign investment in Canada. Enacted in 1985 to replace the Foreign Investment Review Act, it is administered by the Minister of Innovation, Science and Industry through Innovation, Science and Economic Development Canada (ISED). The Act's dual mandate is to attract beneficial foreign investment while protecting Canadian national security.

Two regulations operate alongside the Act: the Investment Canada Regulations (SOR/85-611) and the National Security Review of Investments Regulations (SOR/2009-271). Together, they prescribe filing forms, content requirements, timelines, and the sectors and factors that inform ministerial review.

The Act applies whenever a non-Canadian acquires control of an existing Canadian business or establishes a new unrelated one -- regardless of the transaction's dollar value, because national security review can apply to any investment by a non-Canadian, including minority positions.

Who Is a "Non-Canadian" Under the Investment Canada Act?

The threshold question in every Investment Canada Act matter is whether the investor is in fact non-Canadian. Section 3 of the Act defines a Canadian as a citizen, a permanent resident ordinarily resident in Canada, or an entity controlled by Canadians. Everyone else is a non-Canadian.

Control rules in Part V of the Act set specific share-ownership thresholds. A share acquisition that carries one-third or more voting rights in a corporation creates a rebuttable presumption of acquisition of control under section 28. More than half triggers a definitive acquisition of control. Separate tests apply to partnerships, trusts, and joint ventures.

Common foreign-investor scenarios that trigger the Act:

U.S. private equity funds acquiring Canadian targets through Delaware or Cayman vehicles
European family offices investing through Ontario numbered companies
Non-Canadian majority joint ventures with Canadian minority partners
Corporate reorganizations that shift control of Canadian subsidiaries to non-Canadian parents
New Canadian businesses established by non-Canadian founders or parents

Getting the control analysis right early prevents the most expensive mistake in Investment Canada Act practice: filing on the wrong track or missing a filing entirely.

Notification or Review -- The Two Investment Canada Act Filing Tracks

Every transaction subject to the Investment Canada Act goes down one of two paths. Notifications are information-gathering filings; Applications for Review require ministerial approval before closing.

Notifications (Part III, sections 11-13)

A Notification is filed within 30 days before or after implementation. No pre-closing approval is required. Once the Director issues a receipt under section 13, the Director has 45 days to decide whether to send a review notice. If no notice is issued within that window, the investment becomes non-reviewable.

Notifications cover:

Acquisitions of control below the monetary threshold for review
Establishment of new unrelated Canadian businesses by non-Canadians
Certain indirect acquisitions by trade-agreement or WTO investors that would otherwise be exempt

Applications for Review / Net Benefit Review (Part IV, sections 14-25)

Transactions above the applicable monetary threshold are reviewable and require the Minister's approval before closing. The Minister has 45 days from a complete application to determine whether the investment is likely to be of net benefit to Canada, extendable by a further 30 days under section 21. If the Minister does not respond within the allowed period, the investment is deemed approved -- a statutory safeguard foreign investors should not rely on but should understand.

Current Thresholds

The general statutory threshold in section 14 is CAD 5 million in asset value for a direct acquisition and CAD 50 million for an indirect acquisition. The higher thresholds in sections 14.1 and 14.11 apply to private-sector investors from WTO member states and trade-agreement partners respectively, and are indexed annually:

WTO private-sector investors: CAD 1 billion enterprise value (indexed to Canadian GDP)
Trade-agreement investors (CUSMA, CETA, CPTPP, UK TCA and others): CAD 1.5 billion enterprise value (indexed)
State-owned enterprises: a separate indexed asset-value threshold, lower than private-sector thresholds
Cultural businesses: remain at CAD 5 million asset value regardless of investor origin

Because the indexed figures are updated each year, we advise every foreign investor to confirm the current-year threshold at the moment of filing rather than rely on figures published in prior years' client alerts.

The Net Benefit Test -- How the Minister Decides

Section 20 of the Investment Canada Act sets out the six factors the Minister must consider when deciding whether a reviewable investment is likely to be of net benefit to Canada:

The effect on the level and nature of economic activity in Canada -- employment, resource processing, the use of Canadian-made parts and components, and exports
The degree and significance of Canadian participation in the Canadian business and in the relevant industry
The effect on productivity, industrial efficiency, technological development, product innovation, and product variety in Canada
The effect on competition within any industry in Canada
Compatibility with national industrial, economic, and cultural policies, including protection of personal information
Contribution to Canada's ability to compete in world markets

A successful Application for Review does more than recite these factors. It demonstrates, with data, that the investment delivers measurable Canadian benefit on most of them. In practice, this means negotiating written undertakings -- binding commitments on matters like Canadian employment levels, R&D spend, head-office location, Canadian board representation, and capital investment.

Undertakings are live obligations. They are monitored during the commitment period, and non-compliance can trigger enforcement under section 40. Our approach is to help foreign investors structure undertakings they can realistically meet over the commitment window, not aspirational promises that generate regulatory risk after closing.

Historical precedents shape current practice. In 2008, the federal government blocked Alliant Techsystems' proposed acquisition of MacDonald, Dettwiler & Associates' space division -- the first outright rejection under the Act. In 2010, BHP Billiton's proposed CAD 38 billion acquisition of PotashCorp was effectively blocked through conditions BHP was unwilling to accept. Both matters continue to inform how the Minister evaluates strategic Canadian assets today.

National Security Review and Bill C-34

Part IV.1 of the Investment Canada Act (sections 25.1 through 25.9) authorizes a national security review of any investment by a non-Canadian that the Minister believes could be injurious to national security. Unlike net benefit review, national security review applies regardless of transaction size -- a minority investment, a greenfield business, or a non-controlling position can all be reviewed.

What Bill C-34 Changed

Bill C-34, the National Security Review of Investments Modernization Act (S.C. 2024, c. 4), received Royal Assent on March 22, 2024. Its core changes strengthen the national security review framework:

Expanded ministerial authority to impose interim conditions during a review
Updated penalty regime -- up to CAD 10,000 per day for non-Canadians in contravention under section 40(2)(d), and up to the greater of CAD 25,000 per day or a prescribed amount under section 40(2.1)
Formalized review-commencement rules -- a national security review under the amended section 25.11 begins on the day the investment first comes to the attention of the Minister
Broader information-sharing with international counterparts
New pre-closing notification obligations for investments in prescribed sensitive sectors

Sensitive Sectors

ISED's Guidelines on the National Security Review of Investments, most recently updated on March 5, 2025, identify the sectors and asset types that attract elevated scrutiny: critical minerals, sensitive technology (including artificial intelligence, quantum, advanced semiconductors, biotechnology, and robotics), critical infrastructure, sensitive personal data, and dual-use goods. Investments by state-owned enterprises or state-influenced investors in any of these areas are presumed to warrant close examination.

Process and Remedies

The Minister may issue a notice of review under section 25.2 on reasonable grounds to believe the investment could be injurious to national security. That triggers a multi-stage process involving consultation with the Minister of Public Safety and, where the matter proceeds, a decision by the Governor in Council under section 25.4. The Governor in Council's remedies range from authorizing the investment with conditions or undertakings to ordering non-implementation or divestiture.

Judicial review lies to the Federal Court under the closed-proceeding rules in sections 25.7 and 25.8. In March 2026, the Minister publicly announced the outcome of the TikTok Technology Canada Inc. national security review -- a recent example of how the regime now operates in practice.

For the most sensitive national security matters -- involving state-owned enterprises in critical minerals or advanced semiconductors, for example -- we will be candid with clients about where co-counsel with a national firm adds value. Where the matter fits our capabilities, we handle it end to end.

Cultural Business Investments -- Special Rules

Cultural businesses occupy a distinct track under the Investment Canada Act. Section 14.1(6) and Schedule IV of the Regulations define the category, which includes publishing, film and video, music, broadcasting, and related activities.

The elevated thresholds available to WTO and trade-agreement investors do not apply. The acquisition of a cultural business by any non-Canadian remains reviewable at the general thresholds of CAD 5 million for a direct acquisition and CAD 50 million for an indirect acquisition. The Minister of Canadian Heritage participates alongside the Minister of Innovation, Science and Industry in cultural business reviews, and CUSMA contains specific provisions that may require divestiture to Canadian purchasers in defined circumstances.

Multilingual publishing, Spanish- or Catalan-language media, and French-language creative industries are organically within the scope of this area -- and firmly within Hadri Law's linguistic capacity.

Timelines -- What Foreign Investors Should Expect

A practical Investment Canada Act engagement generally follows this arc:

Pre-engagement diagnostic (same day): threshold analysis, identification of filing track, go / no-go read on national security exposure
Filing preparation (one to three weeks for notifications; three to eight weeks for Applications for Review): collection of information required under the Regulations, drafting of the application or notification, coordination with transaction counsel
Statutory review periods:
- Notification track -- 45 days from the Director's receipt for the Director to issue a review notice (section 13)
- Net benefit track -- 45 days plus a 30-day extension under section 21
- National security track -- up to approximately 200 days aggregate across initial review, Governor in Council consideration, and any judicial review
Undertakings negotiation (where applicable): parallel to review, typically one to four weeks
Closing clearance and post-closing compliance: ongoing undertakings monitoring over the commitment period

Investment Canada Act filings often run in parallel with a pre-merger notification under the Competition Act. The two regimes have different tests, different timelines, and different decision-makers. We coordinate filings so that neither regime delays closing unnecessarily.

Penalties and Enforcement

Section 40 of the Investment Canada Act arms the Minister and the courts with a broad set of remedies: divestiture of control, injunctions against specified actions, compliance directives, suspension of voting rights, asset-disposition orders, and vesting orders under section 41 that place assets in a trustee for sale. Daily financial penalties accrue during contravention:

Up to CAD 10,000 per day under section 40(2)(d) for non-Canadians
Up to the greater of CAD 25,000 per day or a prescribed amount under section 40(2.1) for persons and entities generally

Summary conviction offences under section 42 cover the disclosure of privileged information contrary to section 36 and the knowing provision of false or misleading information. Section 43 sets a two-year limitation on prosecutions running from the subject-matter arising.

For foreign investors, the practical point is simple: the penalties are structured to accrue. Each day of non-compliance adds to the exposure. Early counsel prevents the problem, and early counsel is a fraction of the cost of defending an enforcement action.

How Hadri Law Supports Foreign Investors Under the Investment Canada Act

Our Investment Canada Act services cover the full lifecycle of a foreign investment into Canada:

Threshold analysis and filing diagnosis before a letter of intent is signed
Preparation and filing of Notifications under Part III
Preparation and filing of Applications for Review under Part IV, including representations on the six net benefit factors
Drafting and negotiation of undertakings with the Minister
National security review response, including information requests under section 25.5 and coordination with the Minister's investigative process
Post-closing undertakings compliance monitoring and annual reporting
Coordination with Competition Act pre-merger notifications, CUSMA-related clearances, and parallel foreign regulatory filings in parent-company jurisdictions
Interface with our tax counsel on investment structuring -- Martina Caunedo, our Tax Lawyer, brings international tax experience to structuring decisions that have Investment Canada Act implications

Nassira El Hadri, our Founder & Principal Lawyer, leads the Investment Canada Act practice. Nicholas Dempsey, our Corporate Lawyer, brings more than ninety asset and share transactions of experience to the transactional side of foreign investment work. Together with our Corporate Legal Assistant, Ana Gomez, and legal assistant Sukaina Syed, the team can move quickly when closing timelines are tight.

Serving Foreign Investors Across the GTA and Internationally

Our Toronto office at First Canadian Place, 100 King Street West, Suite 5700 puts us in the geographic and professional heart of Canadian finance. We meet foreign clients and their Canadian advisors in person across the GTA -- Mississauga, Oakville, Burlington, Hamilton, Vaughan, Markham, Kitchener, and Niagara -- and maintain a working remote practice for investors based in the United States, Spain, France, the United Kingdom, Mexico, Argentina, Peru, and Morocco.

Counsel is available in English, French, Spanish, and Catalan. Our membership in the Spain-Canada Chamber of Commerce reflects the concrete cross-border work we do for Spanish- and Catalan-speaking clients investing in Canada. For foreign in-house counsel, the practical benefit is immediate: strategy calls, filings, and undertakings negotiations can happen in the client's working language without translation friction.

Call (437) 974-2374 for a free consultation on your Investment Canada Act matter.

Frequently Asked Questions

Do I have to file under the Investment Canada Act if I am only buying a minority stake?

Net benefit review is triggered by an acquisition of control. A true minority stake below the section 28 control presumptions generally does not require a net benefit filing. National security review under Part IV.1, however, applies regardless of percentage -- any investment by a non-Canadian, including a minority position, can be reviewed if the Minister has reasonable grounds to believe it may be injurious to national security.

Does the Investment Canada Act apply to asset purchases, or only share purchases?

Both. Section 14 captures the acquisition of control of a Canadian business whether the deal is structured as a share acquisition, an asset acquisition of all or substantially all the business's operating assets, or an amalgamation. The thresholds use asset value or enterprise value depending on investor category. Structure the transaction as a share deal or an asset deal -- the Act follows either.

What happens if my Investment Canada Act filing is reviewed and rejected?

If the Minister determines an investment is not likely to be of net benefit, the non-Canadian cannot implement the acquisition under section 16. For national security reviews, the Governor in Council under section 25.4 can order non-implementation, impose conditions, or require divestiture if closing has already occurred. Judicial review to the Federal Court under sections 25.7 and 25.8 is limited and proceeds through closed-proceeding rules.

Are state-owned enterprises treated differently under the Investment Canada Act?

Yes. State-owned enterprises face a lower indexed net benefit threshold than private-sector WTO or trade-agreement investors and attract heightened national security scrutiny under ISED's guidelines. Investments by state-owned or state-influenced investors in critical minerals, sensitive technology, or critical infrastructure are presumed to warrant close review. Expect a longer timeline and more detailed information requests.

Can I withdraw an Investment Canada Act filing after submission?

A filing can generally be withdrawn before the Minister issues a final decision, though the practical effect depends on the stage. Withdrawing a Notification before the 45-day review window expires ends the matter. Withdrawing an Application for Review typically requires a fresh filing if the transaction later proceeds. National security review continues under the Minister's own motion once initiated, independent of the applicant's wishes.

How is confidential information protected during an Investment Canada Act review?

Section 36 of the Investment Canada Act treats information submitted under the Act as privileged. Unauthorized disclosure is a summary conviction offence under section 42. In national security judicial reviews, sections 25.7 and 25.8 establish closed-proceeding rules to protect sensitive evidence provided by the Minister. Strategically, submissions should be marked and formatted to preserve the statutory privilege.

Does the Investment Canada Act apply to real estate investments in Canada?

The Act targets the acquisition of an operating Canadian business, not bare real estate. A foreign investor buying raw land or a single rental property is generally outside the Act's scope -- though other federal and provincial regimes apply to non-resident real estate acquisitions. If the real estate is held within an operating business (a hotel operating company, for example), the Act applies to the acquisition of that business.

In what languages does Hadri Law handle Investment Canada Act matters?

Our Investment Canada Act practice operates in English, French, Spanish, and Catalan. Foreign investors from Spain, France, Mexico, Argentina, Peru, Morocco, and French-speaking Canada can retain counsel, review filings, negotiate undertakings, and participate in strategy calls in their working language. This is rare among Toronto corporate firms and material for cross-border deal teams.

Sources & Official Resources

Federal Statutes Cited

Regulations Cited

Government Resources

Innovation, Science and Economic Development Canada -- Investment Canada Act

Contact Hadri Law Today

If you are a foreign investor -- or counsel for a foreign investor -- evaluating a Canadian acquisition, greenfield investment, or strategic minority position, call Hadri Law. We will run a threshold and filing-track diagnostic in a free consultation and give you a clear read on what the Investment Canada Act requires of your specific transaction.

Phone: (437) 974-2374
Address: First Canadian Place, 100 King Street West, Suite 5700, Toronto, ON M5X 1C7
Book a free consultation: calendly.com/hadrilaw/free-consultation
Languages: English, French, Spanish, Catalan

Investment Canada Act Lawyer in Toronto -- Counsel for Foreign Investors

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