Investment Canada Act

The Investment Canada Act (ICA) is a Canadian Federal law governing large foreign direct investment in Canada. The ICA was one of the first acts of Brian Mulroney's newly elected Progressive Conservative government, receiving royal assent on 20 June 1985. It has been amended at various times, including recently the Economic Action Plan 2013 Act. Pertinent regulations include the Investment Canada Regulations, SOR/85-611. The Act empowers the government to forbid foreign investments of "significant" size if they do not present a "net benefit to Canada." As of 2014, Canadian policy is to consider over $354 million "significant." The determination of what substantially constitutes the locus of control of a corporation is governed by the Canadian Ownership and Control Determination Act.

The Act was intended to signal Canada's openness to foreign investment and coincided with a narrowed mandate of the Foreign Investment Review Agency (FIRA), which was renamed Investment Canada. FIRA had been set up by Pierre Trudeau's Liberal government to limit increasing US ownership of Canadian business. Canadian nationalists criticized FIRA's effectiveness, noting that in practice it was rarely used to actually forbid an investment. The business community and opposition Progressive Conservative Party criticized FIRA for its activism, saying it had stifled investment from the emerging global economy.

The Act empowers a Director of Investments, who as of April 2015 is Deputy Minister of Industry John Knubley, to produce decisions, and reports of decisions. The thresholds, for valuations above which the ICA is to be invoked, are (according to the legislation) several and hinge on whether or not the investors are part of the World Trade Organisation.

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