CANADA: Guidelines on the National Security Review of Investments – Sensitive Areas

Wednesday March 31 2021

The Government of Canada has released updated Guidelines on the National Security Review of Investments under the Investment Canada 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’).

It is recommended that investors and Canadian businesses take account of the national security review provisions, the Regulations and the Guidelines in their business planning and communications. The national security review process is separate from the net benefit review process conducted by the Minister or Minister of Canadian Heritage under Part IV of the Act.

The Canadian government released the Guidelines on December 19, 2016, as part of a transparency initiative intended to encourage foreign investment by providing investors with more information about the types of transactions that may require a national security review and the factors considered by the government when assessing national security risk.

With the latest update of the Guidelines, the factors considered by the government when assessing national security risk now include:

• The effect on Canada’s defence capabilities and interests;
• Transfers of sensitive technology or know-how outside of Canada;
• The impact on the supply of critical goods and services to Canadians;
• The effect on critical minerals and critical mineral supply chains;
• Critical infrastructure;
• The enablement of foreign surveillance or espionage;
• The hindering of law enforcement operations and the potential involvement of illicit actors, such as terrorists or organized crime syndicates;
• The impact on Canada’s international interests, such as diplomatic relationships; and
• The access to sensitive personal data.

Sensitive Technology Areas

The following is a non-exhaustive list of technology areas that may be considered sensitive for the purposes of review under the national security provisions of the Investment Canada Act.

• Advanced Materials and Manufacturing
• Advanced Ocean Technologies
• Advanced Sensing and Surveillance
• Advanced Weapons
• Aerospace
• Artificial Intelligence (AI)
• Biotechnology
• Energy Generation, Storage and Transmission
• Medical Technology
• Neurotechnology and Human-Machine Integration
• Next Generation Computing and Digital Infrastructure
• Position, Navigation and Timing (PNT)
• Quantum Science
• Robotics and Autonomous Systems
• Space Technology

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