(This Dec. 7 story has been corrected to delete the phrase saying that only one deal had been previously blocked under the Investment Canada Act, in the ninth paragraph)
By Ismail Shakil
OTTAWA (Reuters) - Canada on Wednesday proposed beefing up its foreign investment rules to give the government greater power to scrutinize and potentially block overseas deals that bring national security risks.
The proposed amendments would be the biggest overhaul to the Investment Canada Act (ICA) since 2009 and come at a time when the country's rich deposits of critical minerals, which are crucial to the green transition, are in hot demand.
"These proposed changes will ensure that foreign investments in Canada are not only to the net benefit of Canadians, but are not detrimental to our national security," Industry Minister Francois-Philippe Champagne, said at a press conference announcing the proposal.
Champagne said the proposed changes are country-agnostic, though his ministry last month ordered three Chinese companies to divest their investments in Canadian critical minerals after a national security review.
The government also took aim at Beijing in its Indo-Pacific strategy launched last month and said it would tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned enterprises from snapping up critical mineral supplies.
The proposed amendments to ICA include a requirement for foreign investors in some Canadian industries to notify the government before finalizing deals.
It would allow the government to impose interim conditions to prevent acquirers from accessing trade secrets, intellectual properties and sensitive personal information, and the authority to accept undertakings to mitigate national security risk.
It would also allow greater exchange of information with allies to better address common national security challenges.
The ICA became law in 1985 and has had several updates.
The sectors impacted by the early disclosure rule have not yet been determined, but Champagne said the targeted industries are going to be linked to sensitive technologies, critical minerals and those dealing with personal information.
Ottawa sees the critical minerals sectors as vital to Canada's economic prosperity and outlined rules earlier this year to protect the country's critical minerals resources from foreign state-owned companies.
(Reporting by Ismail Shakil in Ottawa; Editing by Leslie Adler and David Gregorio)