Investment Canada Act

The Investment Canada Act (ICA) is administered by Innovation, Science and Economic Development Canada (ISED), with the Department of Canadian Heritage handling cultural businesses. It applies to non-Canadians: broadly, individuals who are not Canadian citizens or permanent residents, and entities that are not controlled by Canadians. It works on three tracks:

• Notification for every new Canadian business and every acquisition of control of a Canadian business that is not reviewable, however small.
• Net benefit review for acquisitions of control above annual thresholds, which cannot close until the Minister is satisfied the investment is likely to be of net benefit to Canada.
• National security review for any investment by a non-Canadian, of any size, including minority stakes.

A Canadian business is a business carried on in Canada that has a place of business here, people employed or self-employed in Canada in connection with it, and assets in Canada used in carrying it on. That describes almost every operating company in the GTA.

The ICA is not the foreign buyer ban. The Prohibition on the Purchase of Residential Property by Non-Canadians Act, in force since January 1, 2023 and extended in 2024 to run until January 1, 2027, restricts non-Canadians from buying certain residential property. It is a separate statute aimed at home purchases, not business acquisitions, and an ICA filing does nothing to satisfy it.

Under sections 11 and 12, a non-Canadian that acquires control of a Canadian business, or establishes a new one, must notify the Director of Investments at any time before implementing the investment or within 30 days after, unless the acquisition is reviewable. There is no minimum deal size: a U.S. buyer of a $900,000 Burlington landscaping company has the same obligation as a buyer paying $90 million. The Director sends a receipt, and a notified investment is generally not reviewable for net benefit, subject to narrow exceptions for certain cultural businesses.

Control is decided under section 28. Acquiring a majority of a corporation's voting shares is an acquisition of control. Acquiring one-third or more but less than a majority is presumed to be control unless the buyer shows it does not control the corporation in fact, and less than one-third is deemed not to be control. Buying all or substantially all of the assets used in a Canadian business is also an acquisition of control, so choosing an asset purchase instead of a share purchase does not avoid the filing. Nor does routing the deal through a new Ontario acquisition corporation, because a corporation controlled from outside Canada is itself a non-Canadian.

An acquisition of control becomes reviewable, rather than merely notifiable, when it exceeds the threshold for the buyer's category. ISED publishes the figures each year. For 2026:

The first three figures are adjusted annually for growth in nominal GDP, so check the ISED thresholds page for the year of closing.

A reviewable investment needs an application before closing and cannot be implemented until the Minister is satisfied, or deemed satisfied, that it is likely to be of net benefit to Canada. The Minister has 45 days after the application is certified complete, extendable by 30 days and then by agreement. Net benefit review touches very few private GTA deals; notification and national security are the live issues.

Part IV.1 of the Act lets the federal government review any investment by a non-Canadian on national security grounds, including acquisitions of control of any dollar value and investments in all or part of an entity carrying on operations in Canada. ISED's national security guidelines list sensitive factors such as defence, critical minerals and critical infrastructure, and say investments by state-owned or state-influenced investors get enhanced scrutiny regardless of value.

Timing drives the deal plan. The Minister can begin a review within 45 days after a notification is certified complete. For investments that need no filing, such as most minority stakes, the government has five years after implementation unless the investor files voluntarily, an option available since August 2, 2022. ISED strongly encourages filing at least 45 days before the planned closing, so a buyer in a sensitive sector that files early can close knowing the window has passed. Amendments in force since September 3, 2024 also let the Minister impose interim conditions while a review is under way.

A mandatory pre-closing filing rule is enacted but not yet in force. The 2024 amendments (S.C. 2024, c. 4) would require a filing before closing for certain investments in prescribed sensitive business sectors, including some minority investments, and would bar closing until the review periods expire. As of October 2026, the federal consolidation of the Act (current to September 30, 2026) still lists these provisions as amendments not in force, and ISED has said they need regulations before they can be implemented. Until they are, the 30-day post-closing notification remains the legal deadline for an ordinary acquisition of control.

For a foreign buyer of an Ontario business, the ICA is usually a covenant and a closing item:

• The share purchase agreement says who files and when. In a sensitive sector, it makes expiry of the national security window a condition precedent to closing.
• Due diligence confirms what the target actually does, including defence or government contracts, sensitive personal data and critical technology that could attract national security interest.
• Large deals may also need pre-merger notification under the Competition Act, a separate regime with its own thresholds and waiting periods.

The ICA turns on the buyer's status. The seller's status triggers different rules: a non-resident seller of taxable Canadian property needs a section 116 certificate. Our guide to cross-border share purchases shows how these pieces fit together, and Lamba Law's buying or selling a business page explains how these filings are coordinated with the closing.

Brightline Controls LLC, a privately held Ohio company, agrees to buy all the shares of Halton Sensor Systems Inc., an Oakville maker of industrial sensors, for $48 million. Brightline is a private trade agreement investor, so the deal is nowhere near the $2.179 billion review threshold for 2026, but it is an acquisition of control and must be notified.

During diligence, Halton's founder, Teresa Kowalczyk, mentions that about 15% of sales go to Canadian defence suppliers. Brightline's Canadian counsel therefore files the notification eight weeks before the planned closing instead of within 30 days after it, and the share purchase agreement makes closing conditional on the 45-day national security window passing without a notice. ISED certifies the notification complete on March 2, 2026, no notice arrives by April 16, and the deal closes on April 20.

Had Brightline closed first and notified afterward, the government could still have started a review after closing and imposed conditions on a business Brightline already owned.