On 24 March 2021, the Canadian Government announced updates to its guidelines on national security reviews (Guidelines) under the Investment Canada Act (Act).

The updated Guidelines identify additional areas that, in the Government’s view, could present national security concerns in foreign investment, including sensitive personal data, certain sensitive technologies and critical minerals, in addition to expressly re-emphasising the Government’s views on investments by state-owned or state-influenced investors.

More specifically:

  • With respect to the identity of the investor (sometimes known as “acquirer risk”), the updated Guidelines confirm and stress the Government’s previous position that investments by state-owned or state-influenced investors will be subject to enhanced scrutiny, irrespective of the value of the investment.
  • The updated Guidelines include a more detailed list of sensitive industries and business activities of Canadian target businesses, adding critical minerals and a number of specific sensitive technologies (whose potential transfer outside of Canada in particular may attract national security focus) such as advanced materials, artificial intelligence, aerospace, medical technology, and robotics.
  • The Guidelines also now add investments providing access to sensitive personal data (e.g., biometric, financial and communications data) to the list of areas potentially subject to enhanced scrutiny.

All other factors in the illustrative list of those that may potentially give rise to national security concerns have been retained from the prior version of the Guidelines, including an investment’s potential effects on Canada’s defence capabilities and interests, the supply of critical goods or the security of critical infrastructure, as well as an investment’s potential to enable foreign surveillance or espionage.

The updated Guidelines build on a policy statement of April 2020 that announced the Government’s intention to take action to protect the health and safety of Canadians and to stabilize the Canadian economy during and after the pandemic. They reflect a continued and now intensified emphasis on the Government’s ability to review foreign investments under the national security provisions of the Act, which are distinct from the economic provisions (which focus on economic growth and employment opportunities in Canada and require a mandatory filing when prescribed conditions are met). As the Government has discretion to review a much wider range of investments under the national security provisions of the Act than it does under the economic provisions (notably, investments not otherwise subject to the Act, such as minority investments), the updated Guidelines signal that it will be more important than ever for foreign (and particularly state-controlled or -influenced) investors to proactively consider their strategy for addressing the potential risks associated with their investment activities in Canada.


Yana Ermak is a partner in Baker McKenzie’s International Commercial Practice Group and a member of the Global Antitrust & Competition Group focusing on competition/antitrust and foreign investment law.


Eva Massai Warden is an associate in Baker McKenzie's Global Antitrust & Competition Group. She joined the Firm’s Toronto office as an associate in 2013 and is now based in the Firm's London office with the EU, Competition & Trade Practice Group. Eva regularly advises clients in a variety of industries on Canadian and international merger control, foreign investment and national security in corporate and commercial transactions.