Canada will require certain foreign minority investments in businesses in sensitive sectors to be notified to Ottawa before they close, under amendments to the Investment Canada Act that are expected to take effect in early 2027. The change could lengthen financing timelines for critical minerals miners and developers that depend on strategic investors, according to Chris Hersh, a partner in the Competition & Foreign Investment Group at Cassels in Toronto.
The rules matter because Ottawa is trying to draw billions of dollars into critical minerals projects while tightening scrutiny of who provides the money. The legislation was enacted in 2024, but the provisions that depend on regulations have not yet taken effect, and the government has not finalized which business activities will be covered.
What Changes for Investors
Today, acquisitions of control of a Canadian business that fall below the net-benefit review threshold generally require a notification that can be filed up to 30 days after closing. Minority investments that do not trigger a mandatory filing can be notified voluntarily to gain greater certainty under the act’s national security provisions. The government can review foreign investments on national security grounds regardless of their value or whether control changes hands.
The 2024 amendments add a mandatory pre-closing filing for some non-control investments. It will apply where the Canadian entity carries on a “prescribed business activity” and the foreign investor obtains rights such as access to material non-public technical information or material assets, together with certain governance or other special rights.
“The new mandatory notification regime is not going to apply to every single transaction,” Hersh told MINING.COM. He said companies must now consider how the act applies to minority transactions as well as control deals.
What Remains Undefined
The prescribed activities are the largest open question. The government has said they will target sensitive sectors and will draw partly on existing policy statements and guidelines, including Canada’s Sensitive Technology List and guidance on the national security regime. Critical minerals are already a national security priority under Canada’s foreign investment policy, and Hersh expects them to be covered. He stressed that the regime is broader than mining.
Timing Becomes the Main Cost
Hersh said the immediate issue for miners may be speed of access to capital rather than its availability. Transactions caught by the regime must be notified before completion. He expects most to clear an initial 45-day national security screening period without further action. Those that raise concerns could face a review of up to 200 days or longer. Companies may not know at the outset which track a deal will follow.
“It means that you can’t necessarily do quick transactions in the same way you can today,” Hersh said. That could weigh on junior miners that need cash quickly, particularly where a foreign company takes a minority equity stake in return for board representation or technical information.
One possible workaround is staged financing, Hersh said. A company could close a first tranche structured so that it does not grant the rights that trigger the filing, then complete a second investment through the review process. Any such structure would have to comply with the final regulations, and it would not rule out national security concerns about the second tranche. The regulations are unpublished, so how workable this approach is remains untested.
The Policy Rationale
Ottawa has said the pre-implementation requirement is meant to prevent irreversible national security harm and to avoid ordering divestitures after a deal has closed. The precedent is recent. In 2022, the government ordered three Chinese companies to sell stakes in Canadian critical minerals firms after national security reviews: Sinomine Rare Metals Resources in Power Metals, Chengze Lithium International in Lithium Chile and Zangge Mining Investment (Chengdu) in Ultra Lithium.
“The intention is to prevent situations like that, where somebody buys something, and then is told to divest after the fact,” Hersh said. He said the pre-closing process offers a degree of certainty that previously required a voluntary filing, at the price of slower closings.
What to Watch
The outcome depends on how Ottawa treats deals that fall between plainly benign and clearly risky. “The real question is what happens in the middle to those transactions in the gray area,” Hersh said, adding that the test is whether the government can manage risks through mitigation measures rather than blocking investments. He remains cautiously optimistic that investment will not be materially undermined, noting that few stable jurisdictions hold significant critical mineral reserves.
The milestones to track are the publication of the final regulations and the list of prescribed activities, followed by the share of early filings that clear the 45-day stage. Until then, companies weighing strategic minority investments face uncertainty about whether board seats or data access would trigger a filing.