Announced its desire to tighten its scrutiny of foreign investments in artificial intelligence, computing, and space technology as the government expands its authority to disrupt and block deals for national security reasons, according to Bloomberg.

Industry Minister François-Philippe Champagne said in an interview with Bloomberg that non-Canadian companies will have to give the government advance notice before investing in or acquiring Canadian entities in those key technology sectors. He said stricter rules will also apply to investments in critical minerals and possibly other sectors.

The idea is to buy time for the government to conduct a national security review before any deal reaches a very advanced stage. Champagne said the potential buyer or investor could be restricted from accessing the targeted company's user data or other assets during the investigation.

This is the first time specific industries and technologies have been identified to be subject to enhanced regulations that will be attached to the Canadian Investment Act, one of the main laws governing foreign investment in the country, which was recently renewed.

Canada traditionally had an open door policy for foreign companies making acquisitions, a policy that allowed large global companies to acquire mining, metals, energy, and major consumer product companies in Canada in the years before the global financial collapse in 2008.

The mood began to change after the crisis, as the government blocked BHP Group's attempt to purchase a massive potash mining company and imposed restrictions on the flow of Chinese capital into the oil industry. In recent years, as the United States began taking broader measures to counter Chinese influence and funds, Canada followed suit.

Earlier this month, Prime Minister Justin Trudeau’s government announced tightened rules on foreign investment in the video game industry and other interactive media, citing the ability of “state-sponsored or influenced hostile actors” to use games to spread misinformation. Champagne declined to go into details, citing national security concerns, but said the government had noticed a worrying pattern.

Champagne said: “We have seen a series of acquisitions in this area, which should give us pause.”

He said the government has concerns not only about the content of video games but also about access to user data.

Champagne added that other industries might be added to the list of sectors subject to stricter acquisition reviews in the future. He said, “You want to be more flexible and adapt to market realities.”

The government has also taken steps to prevent some foreign companies from controlling Canadian critical minerals producers. In 2022, Canada ordered three Chinese entities to divest their investments in three small lithium producers.

Nevertheless, Chinese companies continued investing in Canadian junior miners, and China’s ambassador to Canada recently told Bloomberg that his country intends to continue doing business in this industry.

Some miners have spoken out against Canada’s campaign on Chinese investment, arguing that restrictions will make it harder to produce the metals needed to make electric car batteries and support the global energy transition.

When asked about these concerns, Champagne said he views the United States, Germany, Japan, and South Korea as important sources of investment and pointed to significant mineral cooperation agreements his government has signed with these countries.

Champagne noted that some mining companies work directly with manufacturers, in alliances that help provide capital for resource projects. For example, General Motors and Panasonic Holdings recently announced a deal to purchase electric vehicle battery materials from Nouveau Monde Graphite Inc in Quebec, and they will invest in the Canadian mining company.

However, Champagne acknowledged that the government has more work to do to match investors with opportunities. He added, “We need to do better.”