Foreign investment by unfriendly state-owned companies in Canadian critical minerals projects will undergo a more intense scrutiny by the federal government.
Ottawa is producing a new set of guidelines as part of its federal critical minerals strategy that also involves the Investment Canada Act in cases regarding critical minerals and those related supply chains.
Federal Innovation, Science and Industry Minister François-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson said they are leading the charge.
"Starting today, significant transactions by foreign state-owned enterprises in Canada's critical minerals sectors will only be approved as of likely net benefit on an exceptional basis,” the two ministers said in a joint Oct. 28 news release.
“As well, should a foreign state-owned company participate in these types of transactions, it could constitute reasonable grounds to believe that the investment could be injurious to Canada's national security, regardless of the value of the transaction."
Critical minerals include chromite, graphite, nickel, cobalt, platinum group elements and others used in electric vehicle industry, and in various defence, aerospace, digital, electronics, stainless steel, energy, health and life sciences applications.
With its abundance of these minerals, Ottawa said this represents a “generational economic opportunity” to be a “global supplier of choice” as the federal government moves on its lofty goals of transitioning Canada into a net-zero emitting economy. While welcoming foreign countries, the ministers said, it must come from countries that share “our interests and values.”
"That is why Canada must build strategic resilience in the North American critical minerals supply chain with like-minded partners at home, within North America, and around the world,” the ministers said in a joint release.
"While we continue to welcome foreign direct investment that supports this goal, Canada will act decisively when investments threaten our national security and our critical minerals supply chains.
“The federal government is determined to work with Canadian businesses to attract foreign direct investments from partners that share our interests and values. Canada's critical minerals are key to the future prosperity of our country. We will continue to encourage and work with Canadian businesses that require investment capital, by helping to identify and find partnerships that will serve in the best interest of Canadian businesses, workers, and the economy.”