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Canada tightens foreign investment screening for critical minerals with pre-closing review rule
Under the Investment Canada Act, foreign minority investments in critical minerals firms must face national security screening before closing, with reviews lasting up to 200 days and minimum $500,000 fines for missing filings.
Why it matters
Canada is significantly tightening national security screening of foreign investment in critical minerals. Under rules implementing the 2024 Investment Canada Act amendments, foreign investors taking even minority, non-control stakes must file with the federal government and wait out a national security review before closing — if the investment gives access to material non-public technical information, key assets or governance rights.
Reviews can run up to about 200 days, and failing to file carries a minimum penalty of $500,000. The regulations are expected to be published for consultation in fall 2026 and to take effect in early 2027. The list of prescribed sensitive sectors will be set in the regulations; legal observers widely expect it to include critical minerals production and supply chains.
Full report
Historically, Canada's filing obligations applied mainly to acquisitions of control, and minority investments faced minimal regulatory friction. The new regime expands mandatory filings to minority and asset transactions and requires the review — and any remedies — to happen pre-closing, effectively a suspensory filing system.
The backdrop is Ottawa's 2022 orders forcing Chinese-linked firms — Sinomine, Chengze Lithium and Zangge Mining — out of Canadian lithium and rare metals projects, which left investors worried about retroactive unwinding. The pre-closing mandate gives deal parties legal certainty up front instead of money-in-then-stopped outcomes.
Canada holds major reserves of lithium, cobalt, nickel, copper and rare earths — central to clean-energy and defence supply chains. Ottawa says the aim is not to restrict capital but to keep sensitive-sector investment transparent and reviewable, with conditions where needed. Legal analysis notes junior miners that rely on strategic minority investors to fund exploration and construction now face longer financing timelines and more complex deal structures.
Regulation details are still being drafted; the first major minority investment to run the new process is expected to test the system before the end of 2027.
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