Canada issues policy restricting foreign SOE investment in critical minerals under the Investment Canada Act

Mechanism

The policy operates under the Investment Canada Act's national-security review powers (Part IV.1):

• Acquisitions of control: a foreign SOE acquiring control of a Canadian

business in the critical-minerals sector will only be approved "in the most exceptional of circumstances."

• Minority/non-controlling investments: any SOE participation in a

Canadian business operating in a critical-minerals sector or supply chain — even without acquiring control — will be subject to a mandatory national- security review.

• Scope: the 31 minerals on Canada's Critical Minerals List (announced 11

March 2021), spanning battery metals, rare earths, and other minerals deemed strategic to defence and clean-technology supply chains.

This is a policy-guidance action, not itself an enforcement order — it sets the standard subsequently applied five days later when ISED ordered Sinomine, Chengze Lithium and Zangge Mining to divest their stakes in three TSX-V lithium juniors (filed separately as 2022-11-02-canada-ised-critical-minerals-chinese-divestiture-orders).

Downstream implications

• Establishes a near-categorical bar on Chinese state-linked capital entering

Canadian critical-minerals juniors and producers going forward.

• Functions as the policy predicate for the November 2022 divestiture orders

and for Canada's July 2024 further tightening (limiting approvals to "the most exceptional of circumstances" — filed separately).

Open questions

• The policy text does not name a fixed list of SOEs; enforcement discretion

rests with ISED case-by-case national-security review.