Laws and Regulations

Related Categories: Investment Canada Regulations

 

Investment Canada Act

1. Organization and Mandate
2. Exemptions
3. Notification
4. Review
5. Rules and Presumptions
6. General
7. Remedies, Offences and Punishment
8. Part VIII
9. Transitional, Consequential Amendments and Commencement

Short Title

Short title

1. This Act may be cited as the Investment Canada Act.

Purpose

Purpose of Act

2. Recognizing that increased capital and technology would benefit Canada, the purpose of this Act is to encourage investment in Canada by Canadians and non-Canadians that contributes to economic growth and employment opportunities and to provide for the review of significant investments in Canada by non-Canadians in order to ensure such benefit to Canada.

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Definitions

Definitions

3. In this Act,

"Agency" [Repealed, 1995, c. 1, s. 45]

"assets"

« actifs »

"assets" includes tangible and intangible property of any value;

"business"

« entreprise »

"business" includes any undertaking or enterprise capable of generating revenue and carried on in anticipation of profit;

"Canada"

« Canada »

"Canada" includes the exclusive economic zone of Canada and the continnental shelf of Canada

"Canadian"

« Canadien »

"Canadian" means

(a) a Canadian citizen,

(b) a permanent resident within the meaning of subsection 2(1) of the the Immigration and Refugee Protection Act who has been ordinarily resident in Canada for not more than one year after the time at which he first became eligible to apply for Canadian citizenship,

(c) a Canadian government, whether federal, provincial or local, or an agency thereof, or

(d) an entity that is Canadian-controlled, as determined pursuant to subsection 26(1) or (2) and in respect of which no determination or declaration has been made under subsection 26(2.1) or (2.2);

"Canadian business"

« entreprise canadienne »

"Canadian business" means a business carried on in Canada that has

(a) a place of business in Canada,

(b) an individual or individuals in Canada who are employed or self-employed in connection with the business, and

(c) assets in Canada used in carrying on the business;

"corporation"

« personne morale »

"corporation" means a body corporate with or without share capital;

"Director"

« directeur  »

"Director" means the Director of Investments appointed under section 6;

"entity"

« unité »

"entity" means a corporation, partnership, trust or joint venture;

"joint venture"

« coentreprise »

"joint venture" means an association of two or more persons or entities, where the relationship among those associated persons or entities does not, under the laws in force in Canada, constitute a corporation, a partnership or a trust and where, in the case of an investment to which this Act applies, all the undivided ownership interests in the assets of the Canadian business or in the voting interests of the entity that is the subject of the investment are or will be owned by all the persons or entities that are so associated;

"Minister"

« ministre »

"Minister" means such member of the Queen's Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act;

"new Canadian business"

« nouvelle entreprise canadienne »

"new Canadian business", in relation to a non-Canadian, means a business that is not already being carried on in Canada by the non-Canadian and that, at the time of its establishment,

(a) is unrelated to any other business being carried on in Canada by that non-Canadian, or

(b) is related to another business being carried on in Canada by that non-Canadian but falls within a prescribed specific type of business activity that, in the opinion of the Governor in Council, is related to Canada's cultural heritage or national identity;

"non-Canadian"

« non-Canadien »

"non-Canadian" means an individual, a government or an agency thereof or an entity that is not a Canadian;

"own"

« propriétaire »

"own" means beneficially own;

"person"

« personne »

"person" means an individual, a government or an agency thereof or a corporation;

"prescribed"

Version anglaise seulement

"prescribed" means prescribed by the regulations made pursuant to this Act;

"voting group"

« groupement de votants »

"voting group" means two or more persons who are associated with respect to the exercise of rights attached to voting interests in an entity by contract, business arrangement, personal relationship, common control in fact through the ownership of voting interests, or otherwise, in such a manner that they would ordinarily be expected to act together on a continuing basis with respect to the exercise of those rights;

"voting interest"

« intérêt avec droit de vote »

"voting interest", with respect to

(a) a corporation with share capital, means a voting share,

(b) a corporation without share capital, means an ownership interest in the assets thereof that entitles the owner to rights similar to those enjoyed by the owner of a voting share, and

(c) a partnership, trust or joint venture, means an ownership interest in the assets thereof that entitles the owner to receive a share of the profits and to share in the assets on dissolution;

"voting share"

« action avec droit de vote »

"voting share" means a share in the capital of a corporation to which is attached a voting right ordinarily exercisable at meetings of shareholders of the corporation and to which is ordinarily attached a right to receive a share of the profits, or to share in the assets of the corporation on dissolution, or both.

R.S., 1985, c. 28 (1st Supp.), s. 3; 1993, c. 35, s. 1; 1995, c. 1, s. 45.

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Part I

Organization and Mandate

Minister

Role of Minister

4. The Minister is responsible for the administration of this Act.

R.S., 1985, c. 28 (1st Supp.), s. 4; 1995, c. 1, s. 46.

Duties and powers of Minister

5. (1) The Minister shall

(a) to (e) [Repealed, 1995, c. 1, s. 47]

(f) ensure that the notification and review of investments are carried out in accordance with this Act; and

(g) perform all other duties required by this Act to be performed by the Minister.

Other powers

(2) In exercising the Minister's powers and performing his duties under this Act, the Minister

(a) shall, where appropriate, make use of the services and facilities of other departments, branches or agencies of the Government of Canada;

(b) may, with the approval of the Governor in Council, enter into agreements, for the purposes of this Act, with the government of any province or any agency thereof, or with any other entity or person, and may make disbursements up to an amount equal to the aggregate of the amounts to be contributed by all parties to the agreement, even before those amounts have been contributed; and

(c) may consult with, and organize conferences of, representatives of industry and labour, provincial and local authorities and other interested persons.

R.S., 1985, c. 28 (1st Supp.), s. 5; 1993, c. 35, s. 2; 1995, c. 1, s. 47.

Director of Investments

Director of Investments

6. The Minister may appoint an officer, to be known as the Director of Investments, to advise and assist the Minister in exercising the Minister's powers and performing the Minister's duties under this Act.

R.S., 1985, c. 28 (1st Supp.), s. 6; 1995, c. 1, s. 48.

7. to 9. [Repealed, 1995, c. 1, s. 48]

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Part II

Exemptions

Exempt transactions

10. (1) This Act does not apply to

(a) the acquisition of voting shares or other voting interests by any person in the ordinary course of that person's business as a trader or dealer in securities;

(b) the acquisition of voting interests by any person in the ordinary course of a business carried on by that person that consists of providing, in Canada, venture capital on terms and conditions not inconsistent with such terms and conditions as may be fixed by the Minister;

(c) the acquisition of control of a Canadian business in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of this Act;

(d) the acquisition of control of a Canadian business for the purpose of facilitating its financing and not for any purpose related to the provisions of this Act on the condition that the acquirer divest himself of control within two years after it is acquired or within such longer period as is approved by the Minister;

(e) the acquisition of control of a Canadian business by reason of an amalgamation, a merger, a consolidation or a corporate reorganization following which the ultimate direct or indirect control in fact of the Canadian business, through the ownership of voting interests, remains unchanged;

(f) the acquisition of control of a Canadian business carried on by an agent of Her Majesty in right of Canada or a province or by a Crown corporation within the meaning of the Financial Administration Act;

(g) the acquisition of control of a Canadian business carried on by a corporation the taxable income of which is exempt from tax under Part I of the Income Tax Act by virtue of paragraph 149(1)(d) of that Act;

(h) any transaction to which section 522 of the Bank Act applies;

(i) the involuntary acquisition of control of a Canadian business on the devolution of an estate or by operation of law;

(j) the acquisition of control of a Canadian business by

(i) an insurance company incorporated in Canada that is a company or a provincial company to which the Insurance Companies Act applies, on the condition that the gross investment revenue of the company from the Canadian business is included in computing the income of the company under subsection 138(9) of the Income Tax Act,

(ii) a non-resident insurance company the insurance of risks in Canada by which has been approved by order of the Superintendent of Financial Institutions under Part XIII of the Insurance Companies Act, on the condition that the gross investment revenue of the company from the Canadian business is included in computing the income of the company under subsection 138(9) of the Income Tax Act and the voting interests of the entity carrying on the Canadian business, or the assets used in carrying on the Canadian business, are vested in trust under that Part, or

(iii) a corporation incorporated in Canada, all the issued voting shares of which, other than the qualifying voting shares of directors, are owned by an insurance company described in subparagraph (i) or (ii) or by a corporation controlled directly or indirectly through the ownership of voting shares by such an insurance company, on the condition that, in the case of an insurance company described in subparagraph (ii), the voting interests of the entity carrying on the Canadian business, or the assets used in carrying on the Canadian business, are vested in trust under Part XIII of the Insurance Companies Act; and

(k) the acquisition of control of a Canadian business the revenue of which is generated from farming carried out on the real property acquired in the same transaction.

Where condition not complied with

(2) Where any condition referred to in paragraph (1)(d) or (j) is not complied with, the exemption under that paragraph does not apply and the transaction referred to in that paragraph is subject to this Act as if it had never been exempt.

R.S., 1985, c. 28 (1st Supp.), s. 10; 1991, c. 46, s. 600, c. 47, s. 735.

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Part III

Notification

Investments subject to notification

11. The following investments by non-Canadians are subject to notification under this Part:

(a) an investment to establish a new Canadian business; and

(b) an investment to acquire control of a Canadian business in any manner described in subsection 28(1), unless the investment is reviewable pursuant to section 14.

Notice of investment

12. Where an investment is subject to notification under this Part, the non-Canadian making the investment shall, at any time prior to the implementation of the investment or within thirty days thereafter, in the manner prescribed, give notice of the investment to the Director providing such information as is prescribed.

R.S., 1985, c. 28 (1st Supp.), s. 12; 1995, c. 1, s. 50.

Receipt

13. (1) Where a notice given under section 12 provides all the required information or reasons for the inability to provide any part of the required information, or where the notice is completed pursuant to subsection (2), the Director shall forthwith send a receipt to the non-Canadian that gave the notice

(a) certifying the date on which

(i) the complete notice given under section 12 was received by the Director, or

(ii) the information required to complete the notice was received by the Director pursuant to subsection (2); and

(b) advising the non-Canadian that

(i) the investment is not reviewable, or

(ii) unless the Director sends the non-Canadian a notice for review pursuant to section 15 within twenty-one days after the certified date referred to in paragraph (a), the investment is not reviewable.

Incomplete notice

(2) Where a notice given under section 12 is incomplete, the Director shall forthwith send a notice to the non-Canadian that gave the notice under that section, specifying the information required to complete the notice under section 12 and requesting that the information be provided to the Director in order to complete that notice.

Where investment not reviewable

(3) An investment in respect of which a receipt is sent under subsection (1) is not reviewable if

(a) the information provided by the non-Canadian and relied on by the Director in sending the receipt is accurate; and

(b) in a case where the receipt contains the advice referred to in subparagraph (1)(b)(ii), no notice for review is sent to the non-Canadian pursuant to section 15 within twenty-one days after the certified date referred to in paragraph (1)(a).

R.S., 1985, c. 28 (1st Supp.), s. 13; 1995, c. 1, s. 50.

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Part IV

Review

Reviewable investments

14. (1) The following investments by non-Canadians are reviewable under this Part:

(a) an investment to acquire control of a Canadian business in any manner described in paragraph 28(1)(a), (b) or (c), where the limits set out in subsection (3) apply;

(b) an investment to acquire control of a Canadian business in the manner described in subparagraph 28(1)(d)(i), where the limits set out in subsection (3) apply;

(c) an investment to acquire control of a Canadian business in the manner described in subparagraph 28(1)(d)(ii), where the circumstances described in subsection (2) and the limits set out in subsection (3) apply; and

(d) an investment to acquire control of a Canadian business in the manner described in subparagraph 28(1)(d)(ii), where the circumstances described in subsection (2) do not apply and the limits set out in subsection (4) apply.

Circumstances

(2) The circumstances referred to in paragraphs (1)(c) and (d) are that the value, calculated in the manner prescribed, of the assets of the entity carrying on the Canadian business, and of all other entities in Canada, the control of which is acquired, directly or indirectly, amounts to more than fifty per cent of the value, calculated in the manner prescribed, of the assets of all entities the control of which is acquired, directly or indirectly, in the transaction of which the acquisition of control of the Canadian business forms a part.

Limits

(3) An investment described in paragraph (1)(a), (b) or (c) is reviewable under this Part where the value, calculated in the manner prescribed, of

(a) the assets acquired, in the case where control of a Canadian business is acquired in the manner described in paragraph 28(1)(c), or

(b) the assets of the entity carrying on the Canadian business, and of all other entities in Canada, the control of which is acquired, directly or indirectly, in the case where control of a Canadian business is acquired in the manner described in paragraph 28(1)(a), (b) or (d),

is five million dollars or more.

Limits

(4) An investment described in paragraph (1)(d) is reviewable under this Part where the value, calculated in the manner prescribed, of the assets of the entity carrying on the Canadian business, and of all other entities in Canada, the control of which is acquired, directly or indirectly, is fifty million dollars or more.

14.01 and 14.02 [Repealed, 1994, c. 47, s. 132]

14.03 [Repealed, 1994, c. 47, s. 133]

Limits for WTO investors

14.1 (1) Notwithstanding the limits set out in subsection 14(3), an investment described in paragraph 14(1)(a), (b) or (c) by

(a) a WTO investor, or

(b) a non-Canadian, other than a WTO investor, where the Canadian business that is the subject of the investment is, immediately prior to the implementation of the investment, controlled by a WTO investor,

is reviewable pursuant to section 14 only where the value, calculated in the manner prescribed, of the assets described in paragraph 14(3)(a) or (b), as the case may be, is equal to or greater than the applicable amount determined pursuant to subsection (2).

Amount for subsequent years

(2) For the purposes of subsection (1), the amount for any year shall be determined by the Minister in January of that year by rounding off to the nearest million dollars the amount arrived at by using the formula:

where

"Current Nominal GDP at Market Prices" means the average of the Nominal Gross Domestic Products at market prices for the most recent four consecutive quarters; and

"Previous Year Nominal GDP at Market Prices" means the average of the Nominal Gross Domestic Products at market prices for the four consecutive quarters for the comparable period in the year preceding the year used in calculating the Current Nominal GDP at Market Prices.

Publication in Canada Gazette

(3) As soon as possible after determining the amount for any particular year, the Minister shall publish the amount in the Canada Gazette.

Investments not reviewable

(4) Notwithstanding paragraph 14(1)(d), an investment described in that paragraph by

(a) a WTO investor, or

(b) a non-Canadian, other than a WTO investor, where the Canadian business that is the subject of the investment is, immediately prior to the implementation of the investment, controlled by a WTO investor,

that is implemented after this section comes into force is not reviewable pursuant to section 14.

Exceptions

(5) This section does not apply in respect of an investment to acquire control of a Canadian business that

(a) engages in the production of uranium and owns an interest in a producing uranium property in Canada;

(b) provides any financial service;

(c) provides any transportation service, as that expression may be defined by the regulations; or

(d) is a cultural business.

Definitions

(6) In this section and section 14.2,

"controlled by a WTO investor"

« sous le contrôle d'un investisseur OMC »

"controlled by a WTO investor", with respect to a Canadian business, means, notwithstanding subsection 28(2),

(a) the ultimate direct or indirect control in fact of the Canadian business by a WTO investor through the ownership of voting interests, or

(b) the ownership by a WTO investor of all or substantially all of the assets used in carrying on the Canadian business;

"cultural business"

« entreprise culturelle »

"cultural business" means a Canadian business that carries on any of the following activities, namely,

(a) the publication, distribution or sale of books, magazines, periodicals or newspapers in print or machine readable form, other than the sole activity of printing or typesetting of books, magazines, periodicals or newspapers,

(b) the production, distribution, sale or exhibition of film or video recordings,

(c) the production, distribution, sale or exhibition of audio or video music recordings,

(d) the publication, distribution or sale of music in print or machine readable form, or

(e) radio communication in which the transmissions are intended for direct reception by the general public, any radio, television and cable television broadcasting undertakings and any satellite programming and broadcast network services;

"financial institution"

« institution financière »

"financial institution" means any entity authorized to do business under the laws applicable to a WTO Member or any of its political subdivisions relating to financial institutions, as defined by the laws applicable to that WTO Member or any of its political subdivisions, and includes a holding company thereof;

"financial service"

« service financier »

"financial service" means a service of a financial nature offered by a financial institution excluding the underwriting and selling of insurance policies;

"WTO Agreement"

« Accord sur l'OMC »

"WTO Agreement" has the meaning given to the word "Agreement" by subsection 2(1) of the World Trade Organization Agreement Implementation Act;

"WTO investor"

« investisseur OMC »

"WTO investor" means

(a) an individual, other than a Canadian, who is a national of a WTO Member or who has the right of permanent residence in relation to that WTO Member,

(b) a government of a WTO Member, whether federal, state or local, or an agency thereof,

(c) an entity that is not a Canadian-controlled entity, as determined pursuant to subsection 26(1) or (2), and that is a WTO investor-controlled entity, as determined in accordance with subsection (7),

(d) a corporation or limited partnership

(i) that is not a Canadian-controlled entity, as determined pursuant to subsection 26(1),

(ii) that is not a WTO investor within the meaning of paragraph (c),

(iii) of which less than a majority of its voting interests are owned by WTO investors,

(iv) that is not controlled in fact through the ownership of its voting interests, and

(v) of which two thirds of the members of its board of directors, or of which two thirds of its general partners, as the case may be, are any combination of Canadians and WTO investors,

(e) a trust

(i) that is not a Canadian-controlled entity, as determined pursuant to subsection 26(1) or (2),

(ii) that is not a WTO investor within the meaning of paragraph (c),

(iii) that is not controlled in fact through the ownership of its voting interests, and

(iv) of which two thirds of its trustees are any combination of Canadians and WTO investors, or

(f) any other form of business organization specified by the regulations that is controlled by a WTO investor;

"WTO Member"

« membre de l'OMC »

"WTO Member" means a Member of the World Trade Organization established by Article I of the WTO Agreement.

Interpretation

(7) For the purposes only of determining whether an entity is a "WTO investor-controlled entity" under paragraph (c) of the definition "WTO investor" in subsection (6),

(a) subsections 26(1) and (2) and section 27 apply and, for that purpose,

(i) every reference in those provisions to "Canadian" or "Canadians" shall be read and construed as a reference to "WTO investor" or "WTO investors", respectively,

(ii) every reference in those provisions to "non-Canadian" or "non-Canadians" shall be read and construed as a reference to "non-Canadian, other than a WTO investor," or "non-Canadians, other than WTO investors," respectively, except for the reference to "non-Canadians" in subparagraph 27(d)(ii), which shall be read and construed as a reference to "not WTO investors",

(iii) every reference in those provisions to "Canadian-controlled" shall be read and construed as a reference to "WTO investor-controlled", and

(iv) the reference in subparagraph 27(d)(i) to "Canada" shall be read and construed as a reference to "a WTO Member"; and

(b) where two persons, one being a Canadian and the other being a WTO investor, own equally all of the voting shares of a corporation, the corporation is deemed to be WTO investor-controlled.

1988, c. 65, s. 135; 1993, c. 35, s. 3; 1994, c. 47, s. 133.

Regulations

14.2 The Governor in Council may make such regulations as the Governor in Council deems necessary for carrying out the purposes and provisions of section 14.1, including regulations defining the expression "transportation service" for the purposes of paragraph 14.1(5)(c).

1988, c. 65, s. 135; 1994, c. 47, s. 133.

Other reviewable investments

15. An investment subject to notification under Part III that would not otherwise be reviewable is reviewable under this Part if

(a) it falls within a prescribed specific type of business activity that, in the opinion of the Governor in Council, is related to Canada's cultural heritage or national identity; and

(b) within twenty-one days after the certified date referred to in paragraph 13(1)(a)

(i) the Governor in Council, where the Governor in Council considers it in the public interest on the recommendation of the Minister, issues an order for the review of the investment, and

(ii) the Director sends the non-Canadian making the investment a notice for review.

R.S., 1985, c. 28 (1st Supp.), s. 15; 1995, c. 1, s. 50.

Prohibition

16. (1) A non-Canadian shall not implement an investment reviewable under this Part unless the investment has been reviewed under this Part and the Minister is satisfied or is deemed to be satisfied that the investment is likely to be of net benefit to Canada.

Exceptions

(2) Subsection (1) does not apply

(a) where the Minister has sent a notice to a non-Canadian making an investment to the effect that the Minister is satisfied that a delay in implementing the investment would result in undue hardship to the non-Canadian or would jeopardize the operations of the Canadian business that is the subject of the investment;

(b) to an investment made through an acquisition referred to in subparagraph 28(1)(d)(ii); or

(c) to an investment reviewable pursuant to section 15.

Application

17. (1) Where an investment is reviewable under this Part, the non-Canadian making the investment shall, in the manner prescribed, file an application with the Director containing such information as is prescribed.

When application must be filed

(2) The application required by subsection (1) shall be filed

(a) subject to paragraph (b), in the case of an investment reviewable pursuant to section 14, at any time prior to the implementation of the investment;

(b) in the case of an investment made through an acquisition referred to in subparagraph 28(1)(d)(ii) or an investment with respect to which a notice referred to in paragraph 16(2)(a) has been sent, at any time prior to the implementation of the investment or within thirty days thereafter; or

(c) in the case of an investment reviewable pursuant to section 15, forthwith on receipt of a notice for review referred to in subparagraph 15(b)(ii).

R.S., 1985, c. 28 (1st Supp.), s. 17; 1995, c. 1, s. 50.

Receipt

18. (1) Where an application filed under section 17 contains all the required information or reasons for the inability to provide any part of the information, or where the application is completed pursuant to subsection (2) or is deemed to be complete pursuant to subsection (3), the Director shall forthwith send a receipt to the applicant, certifying the date on which

(a) the complete application filed under section 17 was received by the Director;

(b) the information required to complete the application was received by the Director pursuant to subsection (2); or

(c) the application was deemed to be complete pursuant to subsection (3).

Incomplete application

(2) Where an application filed under section 17 is incomplete, the Director shall send a notice to the applicant specifying the information required to complete the application and requesting that that information be provided to the Director in order to complete the application.

Where application deemed complete

(3) Where the Director does not, within fifteen days after an application under section 17 has been received by the Director, send a receipt under subsection (1) or a notice under subsection (2), the application is deemed to be complete as of the date the application was received by the Director.

R.S., 1985, c. 28 (1st Supp.), s. 18; 1995, c. 1, s. 50.

Matters to be referred to Minister

19. The Director shall refer to the Minister, for the purposes of section 21, any of the following material received by the Director in the course of the review of an investment under this Part:

(a) the information contained in the application filed under section 17 and any other information submitted by the applicant;

(b) any information submitted to the Director by the person or entity from whom or which control of the Canadian business is being or has been acquired;

(c) any written undertakings to Her Majesty in right of Canada given by the applicant; and

(d) any representations submitted to the Director by a province that is likely to be significantly affected by the investment.

R.S., 1985, c. 28 (1st Supp.), s. 19; 1995, c. 1, s. 50.

Factors

20. For the purposes of section 21, the factors to be taken into account, where relevant, are

(a) the effect of the investment on the level and nature of economic activity in Canada, including, without limiting the generality of the foregoing, the effect on employment, on resource processing, on the utilization of parts, components and services produced in Canada and on exports from Canada;

(b) the degree and significance of participation by Canadians in the Canadian business or new Canadian business and in any industry or industries in Canada of which the Canadian business or new Canadian business forms or would form a part;

(c) the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada;

(d) the effect of the investment on competition within any industry or industries in Canada;

(e) the compatibility of the investment with national industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives enunciated by the government or legislature of any province likely to be significantly affected by the investment; and

(f) the contribution of the investment to Canada's ability to compete in world markets.

Net benefit

21. (1) Subject to sections 22 and 23, the Minister shall, within forty-five days after the certified date referred to in subsection 18(1), send a notice to the applicant that the Minister, having taken into account any information, undertakings and representations referred to the Minister by the Director pursuant to section 19 and the relevant factors set out in section 20, is satisfied that the investment is likely to be of net benefit to Canada.

Where Minister deemed to be satisfied

(2) Subject to sections 22 and 23, where the Minister does not send a notice under subsection (1) within the forty-five day period referred to in that subsection, the Minister is deemed to be satisfied that the investment is likely to be of net benefit to Canada and shall send a notice to that effect to the applicant.

R.S., 1985, c. 28 (1st Supp.), s. 21; 1995, c. 1, s. 50.

Extension period

22. (1) Where the Minister is unable to complete the consideration of an investment within the forty-five day period referred to in subsection 21(1), the Minister shall, within that period, send a notice to that effect to the applicant and the Minister shall, within thirty days from the date of the sending of the notice or within such further period as may be agreed on by the applicant and the Minister, complete the consideration of the investment.

Notice

(2) If, within the thirty day period referred to in subsection (1) or such further period as is agreed on pursuant to that subsection, the Minister is satisfied that the investment is likely to be of net benefit to Canada, the Minister shall, within that period, send a notice to that effect to the applicant.

Where Minister deemed to be satisfied

(3) Subject to section 23, where the Minister does not send a notice under subsection (2) within the period referred to in that subsection, the Minister is deemed to be satisfied that the investment is likely to be of net benefit to Canada and shall send a notice to that effect to the applicant.

Notice of right to make representations and submit undertakings

23. (1) Where the Minister is not satisfied, within the forty-five day period referred to in subsection 21(1) or within any extension period referred to in subsection 22(1), that an investment is likely to be of net benefit to Canada, the Minister shall send a notice to that effect to the applicant, advising the applicant of his right to make representations and submit undertakings within thirty days from the date of the notice or within such further period as may be agreed on by the applicant and the Minister.

Representations and undertakings

(2) Where, after receipt of the notice referred to in subsection (1), the applicant advises the Minister that he wishes to make representations or submit undertakings, the Minister shall afford the applicant a reasonable opportunity, within the period referred to in subsection (1) for so doing, to make representations in person or by an agent and to give undertakings to Her Majesty in right of Canada, as the applicant sees fit.

Net benefit

(3) On the expiration of the period referred to in subsection (1) for making representations and submitting undertakings, the Minister shall, in the light of any such representations and undertakings and having regard to the matters to be taken into account under subsection 21(1), forthwith send a notice to the applicant

(a) that the Minister is satisfied that the investment is likely to be of net benefit to Canada; or

(b) confirming that the Minister is not satisfied that the investment is likely to be of net benefit to Canada.

Divestiture

24. (1) On receipt of a notice under paragraph 23(3)(b), the applicant shall not implement the investment to which the notice relates or, if the investment has been implemented, shall divest himself of control of the Canadian business that is the subject of the investment.

(1.1) to (1.3) [Repealed, 1994, c. 47, s. 134]

Authority to purchase cultural business

(2) Notwithstanding section 90 of the Financial Administration Act, where a NAFTA investor is, pursuant to a review under this Part, required to divest control of a cultural business, as defined in subsection 14.1(6), that has been acquired in the manner described in subparagraph 28(1)(d)(ii), where the circumstances described in subsection 14(2) do not apply, Her Majesty in right of Canada may acquire all or part of the cultural business and dispose of all or any part of the cultural business so acquired.

Designation of agent

(3) For the purposes of subsection (2), the Governor in Council may, on the recommendation of the Minister and the Treasury Board, by order, designate any Minister of the Crown in right of Canada, or any Crown corporation within the meaning of the Financial Administration Act, to act as agent on behalf of Her Majesty with full authority to do all things necessary, subject to such terms and conditions not inconsistent with the obligations of the parties to the NAFTA Agreement under Article 2106 of the Agreement, as the Governor in Council considers appropriate.

Definitions

(4) In this section,

"controlled by a NAFTA investor"

« sous le contrôle d'un investisseur ALÉNA »

"controlled by a NAFTA investor", with respect to a Canadian business, means, notwithstanding subsection 28(2),

(a) the ultimate direct or indirect control in fact of the Canadian business by a NAFTA investor through the ownership of voting interests, or

(b) the ownership by a NAFTA investor of all or substantially all of the assets used in carrying on the Canadian business;

"NAFTA Agreement"

« Accord ALÉNA »

"NAFTA Agreement" has the meaning given to the word "Agreement" by the North American Free Trade Agreement Implementation Act;

"NAFTA country"

« pays ALÉNA »

"NAFTA country" means a country that is a party to the NAFTA Agreement;

"NAFTA investor"

« investisseur ALÉNA »

"NAFTA investor" means

(a) an individual, other than a Canadian, who is a national as defined in Article 201 of the NAFTA Agreement,

(b) a government of a NAFTA country, whether federal, state or local, or an agency thereof,

(c) an entity that is not a Canadian-controlled entity, as determined pursuant to subsection 26(1) or (2), and that is a NAFTA investor-controlled entity, as determined in accordance with subsection (5),

(d) a corporation or limited partnership

(i) that is not a Canadian-controlled entity, as determined pursuant to subsection 26(1),

(ii) that is not a NAFTA investor within the meaning of paragraph (c),

(iii) of which less than a majority of its voting interests are owned by NAFTA investors,

(iv) that is not controlled in fact through the ownership of its voting interests, and

(v) of which two thirds of the members of its board of directors, or of which two thirds of its general partners, as the case may be, are any combination of Canadians and NAFTA investors,

(e) a trust

(i) that is not a Canadian-controlled entity, as determined pursuant to subsection 26(1) or (2),

(ii) that is not a NAFTA investor within the meaning of paragraph (c),

(iii) that is not controlled in fact through the ownership of its voting interests, and

(iv) of which two thirds of its trustees are any combination of Canadians and NAFTA investors, or

(f) any other form of business organization specified by the regulations that is controlled by a NAFTA investor.

Interpretation

(5) For the purposes only of determining whether an entity is a NAFTA investor-controlled entity under paragraph (c) of the definition "NAFTA investor" in subsection (4),

(a) subsections 26(1) and (2) and section 27 apply and, for that purpose,

(i) every reference in those provisions to "Canadian" or "Canadians" shall be read and construed as a reference to "NAFTA investor" or "NAFTA investors", respectively,

(ii) every reference in those provisions to "non-Canadian" or "non-Canadians" shall be read and construed as a reference to "non-Canadian, other than a NAFTA investor," or "non-Canadians, other than NAFTA investors," respectively, except for the reference to "non-Canadians" in subparagraph 27(d)(ii), which shall be read and construed as a reference to "not NAFTA investors",

(iii) every reference in those provisions to "Canadian-controlled" shall be read and construed as a reference to "NAFTA investor-controlled", and

(iv) the reference in subparagraph 27(d)(i) to "Canada" shall be read and construed as a reference to "a NAFTA country"; and

(b) where two persons, one being a Canadian and the other being a NAFTA investor, own equally all of the voting shares of a corporation, the corporation is deemed to be NAFTA investor-controlled.

R.S., 1985, c. 28 (1st Supp.), s. 24; 1988, c. 65, s. 136; 1993, c. 44, s. 179; 1994, c. 47, s. 134.

Information for monitoring

25. A non-Canadian that implements an investment in accordance with this Part shall submit such information in his possession relating to the investment as is required from time to time by the Director in order to permit the Director to determine whether the investment is being carried out in accordance with the application filed under section 17 and any representations made or undertakings given in relation to the investment.

R.S., 1985, c. 28 (1st Supp.), s. 25; 1995, c. 1, s. 50.

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Part V

Rules and Presumptions

Canadian Status Rules

Rules respecting control of entities

26. (1) Subject to subsections (2.1) and (2.2), for the purposes of this Act,

(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;

(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 of an entity, it is not a Canadian-controlled entity;

(c) where paragraphs (a) and (b) do not apply and a majority of the voting interests of an entity are owned by Canadians and it can be established that the entity is not controlled in fact through the ownership of its voting interests by one non-Canadian or by a voting group in which a member or members who are non-Canadians own one-half or more of those voting interests of the entity owned by the voting group, it is a Canadian-controlled entity; and

(d) where paragraphs (a) to (c) do not apply and less than a majority of the voting interests of an entity are owned by Canadians, it is presumed not to be a Canadian-controlled entity unless the contrary can be established by showing that

(i) the entity is controlled in fact through the ownership of its voting interests by one Canadian or by a voting group in which a member or members who are Canadians own a majority of those voting interests of the entity owned by the voting group, or

(ii) in the case of an entity that is a corporation or limited partnership, the entity is not controlled in fact through the ownership of its voting interests and two-thirds of the members of its board of directors or, in the case of a limited partnership, two-thirds of its general partners, are Canadians.

Trusts

(2) Subject to subsections (2.1) and (2.2), where it can be established that a trust is not controlled in fact through the ownership of its voting interests, subsection (1) does not apply and the trust is a Canadian-controlled entity where two-thirds of its trustees are Canadians.

Minister may determine

(2.1) Where an entity that carries on or proposes to carry on a specific type of business activity that is prescribed for the purposes of paragraph 15(a) qualifies as a Canadian-controlled entity by virtue of subsection (1) or (2), the Minister may nevertheless determine that the entity is not a Canadian-controlled entity where, after considering any information and evidence submitted by or on behalf of the entity or otherwise made available to the Minister or the Director, the Minister is satisfied that the entity is controlled in fact by one or more non-Canadians.

Minister may declare

(2.2) Where an entity referred to in subsection (2.1) has refused or neglected to provide, within a reasonable time, information that the Minister or the Director has requested and that the Minister considers necessary in order to make a decision under that subsection, the Minister may declare that the entity is not a Canadian-controlled entity.

Retroactivity possible

(2.3) A determination made under subsection (2.1) or a declaration made under subsection (2.2) may be retroactive to such date, not earlier than June 19, 1992, as the Minister specifies, in which case the determination or declaration shall, for all purposes of this Act, be deemed to have been made on the date so specified.

Entity to be informed

(2.4) The Minister shall forthwith inform the entity concerned, in writing, of any determination made under subsection (2.1) or declaration made under subsection (2.2), and of any date specified under subsection (2.3).

Where corporation deemed to be Canadian

(3) Where, after considering any information and evidence submitted by or on behalf of a corporation incorporated in Canada the voting shares of which are publicly traded in the open market, the Minister is satisfied that, with respect to the corporation,

(a) the majority of its voting shares are owned by Canadians,

(b) four-fifths of the members of its board of directors are Canadian citizens ordinarily resident in Canada,

(c) its chief executive officer and three of its four most highly remunerated officers are Canadian citizens ordinarily resident in Canada,

(d) its principal place of business is located in Canada,

(e) its board of directors supervises the management of its business and affairs on an autonomous basis without direction from any shareholder other than through the normal exercise of voting rights at meetings of its shareholders, and

(f) the circumstances described in paragraphs (a) to (e) have existed for not less than the twelve month period immediately preceding the submission of the information and evidence,

the corporation shall be deemed to be a Canadian for the purpose of making any investment described in subsection 14(1), except an investment falling within a prescribed specific type of business activity that, in the opinion of the Governor in Council, is related to Canada's cultural heritage or national identity, and the Minister shall so notify the corporation.

Proof

(4) The Minister may accept, as proof of the circumstances described in paragraphs (3)(e) and (f), a written statement by the corporation to that effect, signed by all the members of its board of directors.

Duration of presumption

(5) If the material facts submitted by or on behalf of the corporation are accurate, the presumption under subsection (3) applies, from the date of the notification by the Minister referred to in that subsection, for so long as those material facts remain substantially unchanged or for two years from the date of that notification, whichever period is shorter.

Equal ownership

(6) Where two persons own equally all of the voting shares of a corporation and at least one of them is a non-Canadian, the corporation is not a Canadian-controlled entity.

R.S., 1985, c. 28 (1st Supp.), s. 26; 1993, c. 35, s. 4; 1995, c. 1, s. 50.

Other rules

27. For the purposes of section 26,

(a) where voting interests of an entity are owned by a partnership, a trust, other than a trust described in subsection 26(2), or a joint venture, those voting interests are deemed to be owned by the partners, beneficiaries or members of the joint venture, as the case may be, in the same proportion as their respective ownership interests in the assets of the partnership, trust or joint venture;

(b) a trust described in subsection 26(2) is deemed to be a person for the purposes of the definition "voting group" in section 3;

(c) any voting shares of a corporation that are issued to bearer are deemed to be owned by non-Canadians unless the contrary is established; and

(d) where voting interests of an entity are held by individuals each of whom holds not more than one per cent of the total number of voting interests of the entity, the Minister shall, in the absence of evidence to the contrary, accept as evidence that those voting interests are owned by individuals who are Canadians a statement purporting to be signed by a person duly authorized by the entity in that behalf indicating that

(i) according to the records of the entity, the individuals who hold those voting interests have addresses in Canada, and

(ii) the person purporting to have signed the statement has no knowledge or reason to believe that those voting interests are owned by individuals who are non-Canadians.

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Acquisition of Control Rules

Manner of acquiring control

28. (1) For the purposes of this Act, a non-Canadian acquires control of a Canadian business only by

(a) the acquisition of voting shares of a corporation incorporated in Canada carrying on the Canadian business;

(b) the acquisition of voting interests of an entity that

(i) is carrying on the Canadian business, or

(ii) controls, directly or indirectly, another entity carrying on the Canadian business,

where there is no acquisition of control of any corporation;

(c) the acquisition of all or substantially all of the assets used in carrying on the Canadian business; or

(d) the acquisition of voting interests of an entity that controls, directly or indirectly, an entity in Canada carrying on the Canadian business, where

(i) there is no acquisition of control, directly or indirectly, of a corporation incorporated elsewhere than in Canada that controls, directly or indirectly, an entity in Canada carrying on the Canadian business, or

(ii) there is an acquisition of control described in subparagraph (i).

Rules and presumptions respecting control of entities

(2) Subject to subsections (4) and (5), for the purposes of this Act,

(a) where one entity controls another entity, it is deemed to control indirectly any entity or entities controlled directly or indirectly by that other entity;

(b) an entity controls another entity directly

(i) where the controlling entity owns a majority of the voting interests of the other entity, or

(ii) where the other entity is a corporation and the controlling entity owns less than a majority of the voting shares of the corporation but controls the corporation in fact through the ownership of one-third or more of its voting shares;

(c) entities that are controlled, directly or indirectly, by the same entity are deemed to be associated with each other, with any other entities controlled by any one or combination of them and with the entity or entities that control them; and

(d) where entities that are associated pursuant to paragraph (c) own voting interests of the same entity, the associated entities may be treated as one entity for the purposes of establishing direct or indirect control of the entity in which they own voting interests.

Presumptions respecting acquisition of control

(3) Subject to subsections (4) and (5), for the purposes of this Act,

(a) the acquisition of a majority of the voting interests of an entity or of a majority of the undivided ownership interests in the voting shares of an entity that is a corporation is deemed to be acquisition of control of that entity;

(b) the acquisition of less than a majority of the voting interests of an entity other than a corporation is deemed not to be acquisition of control of that entity;

(c) the acquisition of less than a majority but one-third or more of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and

(d) the acquisition of less than one-third of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is deemed not to be acquisition of control of that corporation.

Minister may determine

(4) In the case of an entity that carries on or proposes to carry on a specific type of business activity that is prescribed for the purposes of paragraph 15(a), the Minister may, notwithstanding subsection (2) or (3), after considering any information and evidence submitted by or on behalf of the entity or otherwise made available to the Minister or the Director, determine that the entity is or is not controlled by another entity or that there has or has not been an acquisition of control of the entity, where the Minister is satisfied that the entity is or is not controlled in fact by that other entity or that there has or has not in fact been an acquisition of control of that entity, as the case may be.

Minister may declare

(5) Where an entity referred to in subsection (4) has refused or neglected to provide, within a reasonable time, information that the Minister or the Director has requested and that the Minister considers necessary in order to make a decision under that subsection, the Minister may declare that the entity is or is not controlled by another entity or that there has or has not been an acquisition of control of the entity, as the case may be.

Retroactivity possible

(6) A determination made under subsection (4) or a declaration made under subsection (5) may be retroactive to such date, not earlier than June 19, 1992, as the Minister specifies, in which case the determination or declaration shall, for all purposes of this Act, be deemed to have been made on the date so specified.

Entity to be informed

(7) The Minister shall forthwith inform the entity concerned, in writing, of any determination made under subsection (4) or declaration made under subsection (5), and of any date specified under subsection (6).

R.S., 1985, c. 28 (1st Supp.), s. 28; 1993, c. 35, s. 5; 1995, c. 1, s. 50.

Acquisition by more than one transaction or event

29. (1) For the purposes of this Act, the acquisition of anything includes any acquisition thereof that occurs as a result of more than one transaction or event, whether or not those transactions or events occur or have occurred as, or as a part of, a series of related transactions or events and, subject to any provision of this Act, whether or not one or more of those transactions or events occurred before the coming into force of this Act.

Presumption

(2) For the purposes of subsection (1), where, as a result of more than one transaction or event, not one of which is an acquisition of control within the meaning of subsection 28(1), an entity carrying on a Canadian business is controlled in fact through the ownership of voting interests by a non-Canadian, that non-Canadian is deemed to have acquired control of the entity at the time and in the manner of the latest of those transactions or events.

Contractual rights to acquire voting interests or assets

30. (1) For the purposes of this Act, a non-Canadian who has an absolute right under a written contract to acquire voting interests of an entity or to acquire any assets used in carrying on a business may, at the option of that non-Canadian, treat that right as if it had been exercised and as if that non-Canadian owned the voting interests or assets that are the subject of that right.

Voting shares carrying more or less than a voting right

(2) For the purposes of this Act, where a voting share has attached to it more than a single voting right, or a fraction of a voting right, that voting share is deemed to be the number of voting shares, or the fraction of a voting share, that corresponds to the number of voting rights or fraction of a voting right that the voting share confers.

Business partly in Canada

31. (1) A Canadian business shall be deemed to be carried on in Canada notwithstanding that it is carried on partly in Canada and partly in some other place.

Part of a business

(2) A part of a business that is capable of being carried on as a separate business is a Canadian business if the business of which it is a part is a Canadian business.

Timing Rules

New Canadian businesses

32. (1) The time at which a new Canadian business is established is the time at which it becomes a Canadian business.

Investments

(2) The time at which an investment is implemented is the time at which the new Canadian business that is the subject of the investment is established or the time at which control of the Canadian business that is the subject of the investment is acquired.

Sending Notices, Receipts or Demands

Means of sending

33. Where a notice, receipt or demand is required to be sent by the Minister or the Director under any provision of this Act, it shall be sent by personal delivery, registered mail, telecommunicated text or any other verifiable means of communication.

R.S., 1985, c. 28 (1st Supp.), s. 33; 1995, c. 1, s. 50.

Operation of Other Acts

Operation of other Acts

34. Nothing in or done under the authority of this Act affects the operation of any other Act of Parliament that applies to or in respect of any particular Canadian business or class of Canadian businesses, except as expressly provided in this Act.

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Part VI

General

Regulations

Regulations

35. (1) The Governor in Council may make regulations

(a) prescribing anything that, pursuant to any provision of this Act, is to be prescribed; and

(b) prescribing any other matter or thing necessary for carrying into effect the purposes and provisions of this Act.

Tabling regulations

(2) Any regulations made for the purposes of section 15 or the definition "new Canadian business" in section 3 that prescribe a specific type of business activity that, in the opinion of the Governor in Council, is related to Canada's cultural heritage or national identity shall be laid before each House of Parliament on any of the first five days on which that House is sitting after they are made and shall not come into force before sixty days after they are made.

Referral to committee

(3) Any regulations laid before a House of Parliament pursuant to subsection (2) shall be referred to such standing or special committee of that House as may be established or designated for the purpose of studying matters to which the regulations relate.

Exception

(4) Subsection (2) does not apply to any regulation referred to in that subsection that comes into force on the day this Act comes into force.

Privileged Information

Privileged information

36. (1) Subject to subsections (3) and (4), all information obtained with respect to a Canadian, a non-Canadian or a business by the Minister or an officer or employee of Her Majesty in the course of the administration or enforcement of this Act is privileged and no one shall knowingly communicate or allow to be communicated any such information or allow anyone to inspect or to have access to any such information.

Evidentiary privilege

(2) Notwithstanding any other Act or law but subject to subsections (3) and (4), no minister of the Crown and no officer or employee of Her Majesty in right of Canada or a province shall be required, in connection with any legal proceedings, to give evidence relating to any information that is privileged under subsection (1) or to produce any statement or other writing containing such information.

Communication or disclosure of information

(3) Information that is privileged under subsection (1) may, on such terms and conditions and under such circumstances as the Minister deems appropriate,

(a) on request in writing to the Director by or on behalf of the Canadian or non-Canadian to which the information relates, be communicated or disclosed to any person or authority named in the request; or

(b) for any purpose relating to the administration or enforcement of this Act, be communicated or disclosed to a minister of the Crown in right of Canada or a province or to an officer or employee of Her Majesty in right of Canada or a province.

Exceptions

(4) Nothing in this section prohibits the communication or disclosure of

(a) information for the purposes of legal proceedings relating to the administration or enforcement of this Act;

(b) information contained in any written undertaking given to Her Majesty in right of Canada relating to an investment that the Minister is satisfied or is deemed to be satisfied is likely to be of net benefit to Canada;

(c) information to which the public has access;

(d) information the communication or disclosure of which has been authorized in writing by the Canadian or the non-Canadian to which the information relates;

(e) information contained in

(i) any receipt sent pursuant to subsection 13(1) relating to an investment that is not reviewable pursuant to subsection 13(3),

(ii) any notice sent under subsection 21(1) or (2), 22(2) or (3) or 23(3), or

(iii) any demand sent by the Minister under section 39; or

(f) information to which a person is otherwise legally entitled.

Non-disclosure

(5) No minister of the Crown and no officer or employee of Her Majesty in right of Canada or a province may be required, in connection with any legal proceedings or otherwise, to give evidence relating to or otherwise to communicate or disclose any information referred to in paragraph (4)(b) where, in the opinion of the Minister or a person designated by the Minister, the communication or disclosure of that information is not necessary for any purpose relating to the administration or enforcement of this Act and would prejudicially affect the non-Canadian that gave the written undertaking referred to in that paragraph in the conduct of the business affairs of that non-Canadian.

R.S., 1985, c. 28 (1st Supp.), s. 36; 1995, c. 1, s. 50.

Written Opinions

Ministerial opinions

37. (1) Where any question arises under this Act as to whether an individual or an entity is a Canadian, the Minister shall, on application by or on behalf of the individual or entity, forthwith consider the application and any information and evidence submitted therewith and, unless the Minister concludes that the information and evidence submitted therewith is not sufficient to enable the Minister to reach an opinion on the question, shall provide the applicant with a written opinion for the guidance of the applicant.

Other opinions

(2) Anyone may apply to the Minister, with supporting information, for an opinion on the applicability to him of any provision of this Act or the regulations to which subsection (1) does not apply, and the Minister may provide the applicant with a written opinion for the applicant's guidance.

Opinion binding

(3) If the material facts submitted by or on behalf of an applicant for an opinion are accurate, a written opinion provided under this section is binding on the Minister and the Director for so long as the material facts on which the opinion was based remain substantially unchanged.

Authorized opinions

(4) The Minister may authorize the Director or any person the Minister deems qualified to provide written opinions under this section, and any opinion so provided has the same effect as if it had been provided under this section by the Minister.

R.S., 1985, c. 28 (1st Supp.), s. 37; 1988, c. 65, s. 137; 1994, c. 47, s. 135; 1995, c. 1, s. 50.

Guidelines and Interpretation Notes

Guidelines and interpretation notes

38. The Minister may issue and publish, in such manner as the Minister deems appropriate, guidelines and interpretation notes with respect to the application and administration of any provision of this Act or the regulations.

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Part VII

Remedies, Offences and Punishment

Ministerial demand

39. (1) Where the Minister believes that a non-Canadian, contrary to this Act,

(a) has failed to give a notice under section 12 or file an application under section 17,

(b) has implemented an investment the implementation of which is prohibited by section 16 or 24,

(c) has implemented an investment on terms and conditions that vary materially from those contained in an application filed under section 17 or from any information or evidence provided under this Act in relation to the investment,

(d) has failed to divest himself of control of a Canadian business as required by section 24,

(e) has failed to comply with a written undertaking given to Her Majesty in right of Canada relating to an investment that the Minister is satisfied or is deemed to be satisfied is likely to be of net benefit to Canada,

(f) has failed to comply with any other provision of this Act or with the regulations, or

(g) has entered into any transaction or arrangement primarily for a purpose related to this Act,

the Minister may send a demand to the non-Canadian, requiring the non-Canadian, forthwith or within such period as is specified in the demand, to cease the contravention, to remedy the default, to show cause why there is no contravention of the Act or regulations or, in the case of undertakings, to justify any non-compliance therewith.

Contents of demand

(2) A demand under subsection (1) shall indicate the nature of the proceedings that may be taken under this Act against the non-Canadian to whom it is sent in the event that the non-Canadian fails to comply therewith.

Application for court order

40. (1) Where a non-Canadian fails to comply with a demand under section 39, an application on behalf of the Minister may be made to a superior court for an order under subsection (2).

Court orders

(2) Where, at the conclusion of the hearing on an application referred to in subsection (1), the superior court decides that the Minister was justified in sending a demand to the non-Canadian under section 39 and that the non-Canadian has failed to comply therewith, the court may make such order or orders as, in its opinion, the circumstances require, including, without limiting the generality of the foregoing, an order

(a) directing the non-Canadian to divest himself of control of the Canadian business on such terms and conditions as the court deems just and reasonable;

(b) enjoining the non-Canadian from taking any action specified in the order in relation to the investment that might prejudice the ability of a superior court, on a subsequent application for an order under paragraph (a), to effectively accomplish the end of such an order;

(c) directing the non-Canadian to comply with a written undertaking given to Her Majesty in right of Canada in relation to an investment that the Minister is satisfied or is deemed to be satisfied is likely to be of net benefit to Canada;

(d) against the non-Canadian imposing a penalty not exceeding ten thousand dollars for each day the non-Canadian is in contravention of this Act or any provision thereof;

(e) directing the revocation, or suspension for any period specified in the order, of any rights attached to any voting interests acquired by the non-Canadian or of any right to control any such rights; or

(f) directing the disposition by any non-Canadian of any voting interests acquired by the non-Canadian or of any assets acquired by the non-Canadian that are or were used in carrying on a Canadian business.

Penalties recoverable as debts

(3) A penalty imposed by an order made under paragraph (2)(d) is a debt due to Her Majesty in right of Canada and is recoverable as such in a superior court.

Contempt of court

(4) Every one who fails or refuses to comply with an order made by a superior court under subsection (2) that is directed to him may be cited and punished by the court that made the order, as for other contempts of that court.

Rights of appeal

(5) For greater certainty, all rights of appeal provided by law apply in the case of any decision or order made by a superior court under this section, as in the case of other decisions or orders made by that court.

Definition of "superior court"

(6) In this section, "superior court" has the same meaning as in subsection 35(1) of the Interpretation Act but does not include the Supreme Court of Canada.

Vesting orders

41. (1) Where any voting interests or assets in respect of which an order is made under paragraph 40(2)(f) are owned by a non-Canadian outside Canada and that non-Canadian fails to comply with the order within such reasonable time as is fixed by the court that made the order, the court may, by order, vest those voting interests or assets in a trustee named by it who may thereupon, notwithstanding any other Act or law, do all such things and execute all such documents as are necessary to give effect to the order of the court.

Application of proceeds

(2) Any proceeds of the disposition of any voting interests or assets received by a trustee under subsection (1) shall first be applied to the payment of the trustee's fees and expenses in acting as trustee and thereafter any balance remaining shall be paid by the trustee to those who would, but for the vesting order, have been entitled to receive the proceeds.

Summary conviction offences

42. Every one who contravenes section 36 or who knowingly provides false or misleading information under this Act or the regulations is guilty of an offence punishable on summary conviction.

Limitation period

43. Proceedings by way of summary conviction in respect of an offence under this Act may be instituted at any time within but not later than two years after the time when the subject-matter of the proceedings arose.

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Part VIII

[Repealed, 1995, c. 1, s. 49]

Part IX

Transitional, Consequential Amendments and Commencement

Transitional

Terms, conditions and undertakings

45. (1) All terms and conditions of, and all undertakings given in relation to, an investment that has been allowed under the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, are enforceable under this Act as if the investment were subject to this Act.

Legal proceedings under FIRA

(2) Any legal proceedings taken in respect of an investment under section 19, 20 or 21 of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, that are pending on the coming into force of this Act may be continued in respect of that investment under this Act.

Legal proceedings under this Act

(3) Any legal proceedings may be taken under this Act in respect of an investment that has been the subject of any order or deemed allowance under section 12 or 13 of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74.

Privileged information

(4) All information that is privileged under section 14 of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, remains privileged under this Act, subject to the provisions of section 36 of this Act.

Pending notices

(5) Where an investment, whether implemented or not, notice of which has been given under section 8 of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, has not, on the coming into force of this Act, been the subject of any order or deemed allowance under section 12 or 13 of the Foreign Investment Review Act, a complete notice under section 12 of this Act or a complete application under section 17 of this Act shall be deemed to have been received by the Agency in respect of that investment on the day this Act came into force.

Prior investments

(6) Where an investment to which the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, applied has been implemented, and no notice has been given in respect of that investment under section 8 of that Act prior to the coming into force of this Act, that investment shall be deemed to have been implemented on the day this Act came into force.

Prior opinions

(7) Where, on the coming into force of this Act, a person has a binding opinion furnished under section 4 of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, that the person is not a non-eligible person under that Act, that person is deemed to be a Canadian for so long as the material facts on which that opinion was based remain substantially unchanged or for two years from the date of the coming into force of this Act, whichever period is shorter.

Access to Information Act

46. [Amendment]

Bank Act

47. [Amendment]

Canadian Ownership and Control Determination Act

48. [Amendment]

Citizenship Act

49. [Amendment]

Northern Pipeline Act

50. [Amendments]

Commencement

Coming into force

*51. This Act or any provision thereof shall come into force on a day or days to be fixed by proclamation.

*[Note: Act in force June 30, 1985, see SI/85-128.]

Related Provisions

- 1995, c. 1, s. 50(2):

Other references

(2) Every reference to Investment Canada in any order, regulation or other instrument made under the Act shall, unless the context otherwise requires, be read as a reference to the Director of Investments.

- 1995, c. 1, s. 51:

Validity

51. Anything done on or after June 25, 1993 and before the date on which this Act comes into force by the Minister responsible for Investment Canada, the President of Investment Canada or any other person pursuant to any of subsections 13(1) and (2) and 14.1(3) and (4), section 15, subsection 16(2), sections 18 and 21 to 23, subsection 26(3) and sections 37 to 40 of the Investment Canada Act is deemed to be validly done.