The Canadian government is set to intensify its scrutiny of foreign capital investment. According to some analysts, this move is seen as aligning with the United States’ efforts to curb China’s influence.
As per industry sources on the 31st, the Canadian government has decided to conduct strict reviews on foreign investment proposals in sensitive areas. The government announced this decision in a statement released on the 26th (local time).
This action by the Canadian government is based on the recently amended Investment Canada Act. The revised law requires foreign enterprises intending to acquire companies in sensitive sectors to report to the Canadian government before finalizing the transaction. As identified by the Canadian government, sensitive sectors include artificial intelligence (AI), quantum computing, and space technology.
With these strengthened measures, the Canadian government can restrict access from foreign investors looking to acquire companies in these sectors during the review period. Consequently, even if acquisition deals are agreed upon, investors may face restrictions in accessing the data and assets of the acquired company.
The Canadian government, which used to adopt an open stance towards foreign investments, is seen to have toughened its review process due to China’s influence. Last year, the Canadian government ordered Chinese investors to sell their stakes in three lithium companies. Some industry insiders believe that Canada is following in the footsteps of the United States, being wary of China’s growing influence.
The Canadian government has hinted at the possibility of expanding the application of these regulations to other sectors in the future, which is expected to draw significant attention.
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