Canada’s Approach to Investment Measures in 2003
*General* *Policy Framework*	(1.04 - 1.07) The review thresholds of the Investment Canada Act (ICA) are adjusted for inflation every year. In 2000, the threshold was CDN$192 million, in 2001 it was CDN$209 million, in 2002 it was CDN$218 million and in 2003 it is CDN$223 million.	(1.01 - 1.03) Canada relies heavily on foreign investment to further its economic development. Foreign direct investment generates benefits to Canadian communities through increased trade opportunities, the introduction of new technologies and management practices, job creation, the payment of taxes and the purchase of goods and services locally. Canada actively seeks to promote its advantages as an investment destination. Foreign investment promotion is carried out by Investment Partnerships Canada. (1.04 - 1.07) The only domestic law of general application with respect to foreign investment is the Investment Canada Act (the Act). Under the Act, the establishment of a new business in Canada by an investor making its first investment in Canada or the establishment of a new business by an existing investor where the new business is unrelated to any existing business in Canada is subject to a straightforward notification procedure, but is not generally subject to review. The ICA reflects Canada's policy of welcoming international investment and of working to attract quality investment to all regions of Canada. At the same time, to ensure that such investment will be of net benefit to Canada, the ICA contains provisions for the review of certain acquisitions of control of Canadian businesses by foreign investors above a certain threshold (see below) and the establishment of new businesses in industries related to Canada's national identity or cultural heritage. To encourage investment by non-Canadians, Canadian government officials work with potential non-Canadian investors to help them develop investment plans and undertakings that will comply with relevant policies and fully satisfy the net benefit criterion. Except in sensitive sectors as set out in subsequent paragraphs, where either the non-Canadian investor or vendor is ultimately controlled out of a World Trade Organization (WTO) country other than Canada, only the direct acquisition of control of a Canadian business that has assets equal to or greater than Can$223 million (for 2003) is a reviewable transaction. This figure is adjusted annually to reflect economic growth in Canada. Where both the non-Canadian investor and vendor are ultimately controlled out of a non-WTO country, the direct acquisition of control of a Canadian business that has assets greater than Can$5 million is reviewable, and the indirect acquisition of control of a Canadian business with assets greater than Can$50 million is reviewable, or Can$5 million where 50 percent or more of the total assets of the business acquired are located in Canada. These review thresholds are fixed and are not adjusted. The acquisition of a Canadian business involved in the sensitive areas of cultural industries, financial services, transportation services or uranium production is subject to the lower thresholds regardless of the nationality of the investor or vendor. Acquisitions in cultural industries (i.e., publication and distribution of books, magazines, newspapers, videos, music recordings, etc.) below these thresholds and the establishment of new businesses in these cultural industries may be reviewable, if the Government so decides. Reviewable investments are allowed to proceed if they are likely to be of 'net benefit' to Canada. For further information: http://investcan.ic.gc.ca (1.08) As a WTO member, Canada adheres to the obligations of the WTO Agreement on Trade-Related Investment Measures (TRIMs.) Canada is also a party to the North American Free Trade Agreement (NAFTA), Canada-Chile Free Trade Agreement (CCFTA)which include obligations on investment, and the Canada-Costa Rica Free Trade Agreement (CCRFTA) which did not include an investment chapter because of the existence of a bilateral investment treaty (FIPA) with Costa Rica. Canada also adheres to the OECD Guidelines for Multinational Enterprises, a set of voluntary standards of conduct recommended by Member governments regarding the operations of these enterprises in OECD markets. (1.09) Canada has concluded twenty-one Foreign Investment Protection Agreements (FIPAs) since the beginning of the program in 1989. FIPAs are bilateral, reciprocal agreements designed to protect and promote Canada's foreign investments abroad, particularly in developing economies, through a framework of legally-binding rights and obligations. For FIPA listing see: http://www.dfait-maeci.gc.ca/t na-nac/fipa-e.asp	(1.04 - 1.07) The thresholds of the Investment Canada Act (ICA) will be adjusted annually. (1.08) Canada and members of the Andean community (Bolivia, Colombia, Ecuador, Peru and Venezuela) have held preliminary talks on a proposed free trade agreement. Canada is currently participating in investment negotiations under the FTAA negotiations, with the Central American countries Nicaragua, El Salvador, Guatemala and Honduras under the Canada-CA4 FTA negotiations and bilaterally with Singapore under the Canada-Singapore FTA negotiations. Canada is continuing to work with its NAFTA partners on the implementation and clarification of the investment provisions of the Agreement. Canada is actively participating in the ongoing discussions in the WTO Working Group on the relationship between Trade and Investment regarding a prospective multilateral framework of investment rules pursuant to the WTO Ministerial Declaration at Doha. (1.09) Canada is continuing to engage in discussions with priority countries with regard to possible bilateral investment agreements (FIPAs).
Transparency	.	The final form of regulations, after approval by Governor in Council, are made public through publication in the Canada Gazette. Proposed legislation or recent legislative amendments and enactments, can be reviewed in the Canada Gazette. To determine the status of ongoing Bills in the House of Commons or the Senate, visit the Government Bills page on the Parliamentary Internet site (www.parl.gc.ca) The Department of Justice Website site provides quick access to Statutes and associated Regulations in text and compressed text formats. (http://canada.justice.gc.ca) Regulations made under the Investment Canada Act are published in the Canada Gazette. Government of Canada policy is to allow for a public comment period with respect to new regulations. As a matter of practice, any significant regulatory changes are discussed with the industry sectors that would be affected by the changes and with the legal community that represents companies in the sectors. Further information on Canada’s investment policy and ongoing trade policy initiatives, please visit: http://www.dfait-maeci.gc.ca/t na-nac/menu-e.asp or http://intinvest.ic.gc.ca	Canada and its NAFTA partners continue to work to clarify aspects of the NAFTA chapter on investment based on their experience with its operation.
*Non-discrimination*	In January 2003, the Government of Canada initiated a review of the existing foreign investment restrictions in the Telecom sector with a view to seeing if some of these restrictions can be reduced without compromising Canada's national interests. Consultations are continuing with industry and consumer stakeholders. In 2001, the Canada Business Corporations Act was amended to reduce the number of required Canadian residents on the Boards of Directors of CBCA incorporated companies from 50% to 25%.	Canada’s foreign investment laws are largely applied on an MFN and national treatment basis. Canada has made substantive investment commitments in the NAFTA and Canada-Chile Agreements. Any derogations from the principles of MFN and national treatment are clearly identified in these agreements. Selected Investment Provisions by Sector The Investment Canada Act (ICA) – see General Policy Framework for details. Except for investments in the cultural sectors, the ICA applies only to acquisitions of Canadian companies and not to greenfield investments. For further information, please visit: http://icnet.ic.gc.ca/investca n or http://www.pch.gc.ca/culture/i nvest/rev/english.htm Canada Business Corporations Act(CBCA) –Boards of Directors The Canada Business Corporations Act requires, for most federally- incorporated corporations, that 25 per cent of directors be resident Canadians. A simple majority of resident Canadian directors is required for corporations in prescribed sectors. These sectors include: uranium mining; book publishing or distribution; book sales, where the sale of books is the primary part of the corporation’s business; and film or video distribution. Corporations that, by an Act of Parliament or Regulation, are individually subject to minimum Canadian ownership requirements are required to have a majority of resident Canadian directors. CBCA – Issues, transfers, ownership of shares The Canadian Business Corporations Act permits corporations to 'constrain' the issue, transfer and ownership of shares in federally incorporated corporations. The object is to permit corporations to meet Canadian ownership requirements, under certain laws set out in the Canada Business Corporations Act Regulations, in sectors where such ownership is required as a condition to operate or to receive licenses, permits, grants, payments or other benefits. More information may be obtained by accessing the website at http://competition.ic.gc.ca/ Federal Fisheries Act Fish processing companies which have more than 49% foreign ownership are not permitted to hold Canadian commercial fishing licenses. There is no limit on foreign ownership of fish processing companies that do not hold fishing licences. Foreign fishing vessels are prohibited from entering Canada’s Exclusive Economic Zone except under authority of a licence or under treaty. Foreign vessels are those which are not ‘Canadian’ as defined in legislation. The Minister of Fisheries and Oceans has discretionary authority with respect to the issuance of licenses For further information, please visit: http://laws.justice.gc.ca/en/i ndex.html Canada Transport Act – For more details see Canada’s entry in the APEC Investment Guidebook – 5^th Edition or visit: http://laws.justice.gc.ca/en/i ndex.html Book Publishing and Distribution Investment Policy Guidelines Foreign investment in new businesses is limited to Canadian-controlled joint ventures. Foreign acquisition of existing Canadian-controlled businesses is allowed only if: a) the business is in clear financial distress and; b)Canadians have had full and fair opportunity to purchase. Indirect acquisitions are permissible subject to a net benefit test . For further information, please visit: http://www.pch.gc.ca/progs/ac- ca/progs/eiic-csir/index_e.cfm Broadcasting Investment Policy Guidelines Broadcasting in Canada includes both broadcasting programming (e.g. 'over the air' broadcasting, pay and specialty services, video on demand) and broadcasting distribution (e.g. cable, direct-to-home satellite and wireless). Legislation (the Broadcasting Act) requires that the Canadian broadcasting system be effectively owned and controlled by Canadians. A Directive by the Governor-in-Council limits foreign ownership to 20% of voting shares in a licensee and 33 1/3 % of voting shares in the case of holding companies. Therefore, foreign ownership can comprise 46.7% of a Canadian broadcasting licensee both directly and indirectly (20% directly, plus 33% of the Canadian holding company which owns the remaining 80% of the licensee). There are no restrictions on foreign ownership of non-voting shares in a holding company or licensee. In addition, the Chief Executive Officer (CEO) plus 80% of the Board of Directors of a company, which directly holds a broadcasting license, must be Canadian. More info : Broadcasting Act - http://laws.justice.gc.ca/en/B -9.01/index.html Direction to the CRTC (Ineligibility of non-Canadians) http://www.crtc.gc.ca/eng/LEGA L/NONCANAD.HTM Film Distribution Investment Policy Guidelines Foreign acquisition of a Canadian controlled distributor is not allowed. Foreign Investments in new distribution business is permissible only for importation and distribution of proprietary products (the importer owns world rights or is a major investor). Direct or indirect acquisition of foreign distribution businesses in Canada by foreign-owned companies is permissible only if the investor undertakes to reinvest a portion of its Canadian earnings “in accordance with national and cultural policies”. Periodical Publishing Investment Policy Guidelines Foreign investments in the periodical publishing sector, including investments to establish or, directly indirectly, acquire foreign businesses to produce and sell periodicals in Canada and to access the Canadian advertising services market must meet the net benefit test, which includes a commitment to the production of majority Canadian editorial content. Foreign acquisitions of Canadian-owned and Canadian-controlled periodical publishing businesses are not permitted. Financial Services In Canada there are three classes of banks, based on size of equity, for the purposes of determining ownership restrictions: small (less than Can$1 billion), medium (Can$1 billion-Can$5 billion) and large (greater than Can$5 billion). Large banks must remain widely held (investor, whether Canadian or foreign, may own up to 20% any class of voting shares and 30% any class non-voting shares). Medium size banks are allowed to be closely held, but must have a public float of 35% of voting shares. Small banks have no ownership restrictions other than "fit and proper" tests. Further information can be found at the Department of Finance, Canada website: http://www.fin.gc.ca Telecommunications Act Foreign ownership of Canadian common carriers is limited to 20% ownership, 33% indirect and 46.7% combined direct and indirect foreign ownership of voting shares. For further information, please visit: http://www.laws.justice.gc.ca/ en/index.html Uranium A minimum level of resident ownership in individual uranium mining properties of 51% at the stage of first production is required. Exceptions to this limit may be permitted if it can be established that the property is in fact ‘Canadian‑controlled’ (as defined in the Investment Canada Act). While these limits apply to the control of production facilities, there are no limits applied to foreign investment in exploration and development.	Telecommunications Review In January 2003, the Government of Canada initiated a review of the existing foreign investment restrictions in the Telecom sector with a view to seeing if some of these restrictions can be reduced without compromising Canada's national interests. Consultations are continuing with industry and consumer stakeholders.
*Expropriation and Compensation*		Both at the federal and provincial levels, there exists legislation which gives authority to expropriate for a public purpose in accordance with due process of law, subject to compensation. In all circumstances, a fair and equitable legal process is available to the expropriated party for the determination of compensation. Authorities first attempt to reach agreement on appropriate compensation, failing which the action is subject to the judicial process. Compensation is based on fair market value. Valuation criteria are determined by the courts and can include such things as asset value, going concern value, and other criteria.
Protection from Strife and Similar Events		In the investment chapters of the NAFTA and Canada-Chile Free Trade Agreement Agreements, Canada has committed to according to investors of another Party, and to investments of investors of another Party, non-discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife. Canada has also made commitments on compensation for losses within its bilateral Foreign Investment Protection Agreements.
*Transfers of capital related to investments*		Canada permits transfers relating to investments to be made freely and without delay. Please see NAFTA Article 1109 for further details at: http://www.dfait-maeci.gc.ca/n afta-alena/chap11-e.asp
*Performance Requirements*		Canada adheres to the obligations of the WTO Agreement on Trade Related Investment Measures. Canada has made additional and more rigorous commitments on performance requirements within the NAFTA and Canada-Chile Free Trade Agreements. Canada also has made performance requirements commitments in each of its bilateral Foreign Investment Protection Agreements. Please see NAFTA Article 1106 for further details at: http://www.dfait-maeci.gc.ca/n afta-alena/chap11-e.asp
*Entry and Stay of Personnel*	Canada has participated in meetings of the Business Mobility group to share information on visa regimes. Under the new Immigration and Refugee Protection Act which came into force on June 28th 2002, Canada revised its Temporary Foreign Worker Program regulations to further streamline and improve efficiency.	Regulatory Visa Regimes To facilitate information exchange, CIC maintains a website which provides information on visiting Canada. It can be accessed at http://www.cic.gc.ca/english/v isit/index.html Information specific to APEC economies can be found in Canada's entry in the APEC Business Travel Handbook: http://www.apecsec.org.sg/trav book/contents.html Short Term Business Entry In general, business people entering Canada for short term visits require a visitor visa. Exempt APEC economies include Australia, Brunei, Hong Kong, China (HK, SAR,and HK BNO passport holders), Japan, South Korea, Mexico, New Zealand, Papau New Guinea, Singapore and the United States. Canada issues multiple entry visas for up to five years or the life of the passport, whichever is longer, but they are not granted automatically. Upon arrival in Canada, entry can be granted for a stay of up to 6 months. The duration of stay may be extended once the person is in Canada. For further information, please visit: http://www.cic.gc.ca/english/v isit/index.html Business Temporary Residency Citizens from all APEC economies are required to apply for an employment authorization to enter Canada for temporary business residency. Depending on the circumstances of the individuals involved, there are several mechanisms to obtain an employment authorization for temporary business residency. The manual on Canada's current Temporary Foreign Worker guidelines can be found at: http://www.cic.gc.ca/manuals-g uides/english/fw/index.html	For further improvements planned, please visit Canada’s IAP chapter on Mobility of Business People.
*Settlement of Disputes*		Foreign and national investors have equal access to legal procedures in Canada. In addition, under the NAFTA and Canada - Chile Free Trade Agreement, as well as the FIPAs, disputes with respect to investment obligations may be reffered to investor-state dispute settlement. Canada is a party to the Convention on the Recognition and Enforcement of the Foreign Arbitral Awards (the "New York Convention") done at New York, June 10, 1958. It entered into force for Canada on May 12, 1986. The British Columbia International Arbitration Centre (Vancouver, B.C.) and the Quebec National and International Commercial Arbitration Centre (Montreal, Que) offer services that may be accessed by foreign investors. While Canada has not signed or acceded to the ICSID Convention, Canada provides for use of the ICSID Additional Facility Rules and the Arbitration Rules of UNCITRAL in its bilateral investment agreements, the NAFTA and the Canada-Chile FTA.
Intellectual Property	For improvements implemented since last IAP, please visit Canada’s IAP chapter on Intellectual Property Rights.	Canada supports effective intellectual property rights protection that provide certainty and transparency to encourage marketing of goods, services, technology and entertainment; investment in R&D and innovation; and licensing arrangements (transfer of technology) to establish or expand existing business investment. Canada continues to improve intellectual property laws and their administration, to ensure adequate protection for owners of intellectual property, including effective mechanisms for enforcement of rights. For further information, please visit Canada's IAP chapter on Intellectual Property Rights. For further information regarding the administration and registration of intellectual property laws, please visit: http://cipo.gc.ca; and regarding intellectual property policies, please visit: http://strategis.ic.gc.ca/SSG/ ip00001e.html http://www.pch.gc.ca/culture/c ult_ind/copyright.htm and http://www.dfait-maeci.gc.ca/t na-nac/other-e.asp#intellectua l	For further improvements planned, please visit Canada’s IAP chapter on Intellectual Property Rights.
Avoidance of Double Taxation	The following Double Taxation Agreeements came into force since 2001: Moldova, Mongolia, Norway, and Peru. The Protocol Amending the Tax Convention Between Canada and Australia came into force December 30, 2002.	Canada has double taxation agreements (DTAs) in force with the following countries: Algeria, Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Brazil, Bulgaria, Cameroon, Chile, Peoples Republic of China, Croatia, Cyprus, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, Estonia, Finland, France, Germany, Guyana, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Ivory Coast, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Republic of Korea, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Moldova, Mongolia, Morocco, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Papua New Guinea, Peru, Philippines, Poland, Portugal, Romania, Russia, Singapore, South Africa, Slovak Republic, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Trinidad & Tobago, Tunisia, Ukraine, United Kingdom, United States, Uzbekistan, Vietnam, Zambia, and Zimbabwe. For further information, please visit: http://www.fin.gc.ca/treaties/ treatystatus_e.html
*Competition Policy and Regulatory Reform*	For improvements implemented since last IAP, please visit Canada’s IAP chapter on Competition Policy.	Canada's principal laws aimed at the protection of competition are embodied in the federal Competition Act. The Competition Act is a law of general application which establishes basic principles for the conduct of business in Canada. The purpose of the Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy; expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada; ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy; and provide consumers with competitive prices and product choices. All mergers, whether involving foreign or domestic parties, which directly or indirectly impact Canadian markets, are subject to review under the merger provisions of the Competition Act. This review determines whether or not the transaction is likely to result in a substantial lessening or prevention of competition and could ultimately result in an application before the Competition Tribunal for remedial action. For further information, please visit Canada’s IAP chapter on Competition Policy or http://competition.ic.gc.ca/	For further improvements planned, please visit Canada’s IAP chapter on Competition Policy.
*Business Facilitating Measures to Improve the Domestic Business Environment*		In response to the growing recognition of the importance of foreign direct investment to the Canadian economy, Canada's investment attraction and retention strategy consists of five key features: - marketing Canada as the preferred location for North American investment; - targeting new investments by multinational corporations and offering customized servicing. The government is targeting decision-makers in specific multinational companies with strategic campaigns to influence their new investment decisions; - stimulating the formation of international technology alliances and partnerships for SMEs. The government is working to promote the growth of globally competitive companies by introducing technology-based Canadian small and medium-sized companies to international investment partners and opportunities; - improving Canada's investment climate. The Canadian government is working to improve the investment climate by taking note and addressing the concerns of both existing and potential investors; and - new partnerships with the provinces, municipalities, and the private sector. In Canada, provincial and municipal authorities compete among themselves for international investment capital. Investors consider this healthy, but it means that cooperation on investment initiatives is more difficult to achieve unless mutual interests and opportunities for complementary efforts are identified. The federal government continues to build partnerships with provinces and municipalities, and to work with private-sector CEOs and labour leaders to attract investment to various industry sectors. Through, Investment Partnerships Canada (IPC), the Department of Foreign Affairs and International Trade and Industry Canada are working to attract leading international investment prospects. An investor services team has been established to: - be a "one-stop-shop" for foreign investors by providing immediate, accurate and personal responses to information requests; - provide investors with the investment information required, directly or through one of the many Canadian or worldwide contacts; - develop international and NAFTA business cost comparisons for your business case including taxes and wage rates; - organize and facilitate meetings on investment issues with ll relevant public/private sector experts and multilateral partners; - identification of potential strategic alliance partners; and - help solve problems and identify opportunities after the investment. For more information, please visit: http://investincanada.gc.ca	For the latest information on Investment Partnerships Canada and assistance available to new business investors, please visit: http://investincanada.gc.ca
*Other Investment Measures*		A number of programs to assist business are available to both Canadian and non-Canadian businesses. Information on government programs and services, (including incentive programs) can be obtained by contacting any Canadian Embassy/High Commission or by contacting the International FaxLink System, an automated fax delivery system used to order publications from outside of Canada. Call from a touchtone fax machine at (1 613) 944-6500. A master index of documents available via FaxLink International may be ordered from the system. The Government of Canada Primary Internet Site (Canada Site) is the Internet electronic access point through which interested parties from around the world can obtain information about Canada, its government and its programs and services. Direct links are also provided from this site to government departments and agencies that have Internet facilities. This website may be accessed at: http://Canada.gc.ca/main_e.htm l Information on investment policies, Canada’s participation in international investment discussions and Canadian investment agreements; and access to an extensive collection of studies on the impact of FDI is available on the Government of Canada International Investment Policy Website at: http://intinvest.ic.gc.ca/ and on the Department of Foreign Affairs and International Trade - Trade Negotiations and Agreements Website at: http://www.dfait-maeci.gc.ca/t na-nac/menu-en.asp . Also, users can read about Canada’s Investment Promotion Strategy and find detailed provincial and federal information on investing in Canada may be accessed at the following address at: http://investincanada.gc.ca

Canada’s Approach to Investment Measures in 2003

Section

Improvements Implemented Since Last IAP

Current Investment Measures Applied

Further Improvements Planned

General Policy Framework

(1.04 - 1.07) The review thresholds of the Investment Canada Act (ICA) are adjusted for inflation every year. In 2000, the threshold was CDN$192 million, in 2001 it was CDN$209 million, in 2002 it was CDN$218 million and in 2003 it is CDN$223 million.

(1.01 - 1.03) Canada relies heavily on foreign investment to further its economic development. Foreign direct investment generates benefits to Canadian communities through increased trade opportunities, the introduction of new technologies and management practices, job creation, the payment of taxes and the purchase of goods and services locally. Canada actively seeks to promote its advantages as an investment destination. Foreign investment promotion is carried out by Investment Partnerships Canada.

(1.04 - 1.07) The only domestic law of general application with respect to foreign investment is the Investment Canada

Act (the Act). Under the Act, the establishment of a new business in Canada by an investor making its first investment in Canada or the establishment of a new business by an existing investor where the new business is unrelated to any existing business in Canada is subject to a straightforward notification procedure, but is not generally subject to review. The ICA reflects Canada's policy of welcoming international investment and of working to attract quality investment to all regions of Canada. At the same time, to ensure that such investment will be of net benefit to Canada, the ICA contains provisions for the review of certain acquisitions of control of Canadian businesses by foreign investors above a certain threshold (see below) and the establishment of new businesses in industries related to Canada's national identity or cultural heritage. To encourage investment by non-Canadians, Canadian government officials work with potential non-Canadian investors to help them develop investment plans and undertakings that will comply with relevant policies and fully satisfy the net benefit criterion.

Except in sensitive sectors as set out in subsequent paragraphs, where either the non-Canadian investor or vendor is ultimately controlled out of a World Trade Organization (WTO) country other than Canada, only the direct acquisition of control of a Canadian business that has assets equal to or greater than Can$223 million (for 2003) is a reviewable transaction. This figure is adjusted annually to reflect economic growth in Canada.

Where both the non-Canadian investor and vendor are ultimately controlled out of a non-WTO country, the direct acquisition of control of a Canadian business that has assets greater than Can$5 million is reviewable, and the indirect acquisition of control of a Canadian business with assets greater than Can$50 million is reviewable, or Can$5 million where 50 percent or more of the total assets of the business acquired are located in Canada. These review thresholds are fixed and are not adjusted.

The acquisition of a Canadian business involved in the sensitive areas of cultural industries, financial services, transportation services or uranium production is subject to the lower thresholds regardless of the nationality of the investor or vendor. Acquisitions in cultural industries (i.e., publication and distribution of books, magazines, newspapers, videos, music recordings, etc.) below these thresholds and the establishment of new businesses in these cultural industries may be reviewable, if the Government so decides. Reviewable investments are allowed to proceed if they are likely to be of 'net benefit' to Canada. For further information: http://investcan.ic.gc.ca

(1.08) As a WTO member, Canada adheres to the obligations of the WTO Agreement on Trade-Related Investment Measures (TRIMs.) Canada is also a party to the North American Free Trade Agreement (NAFTA), Canada-Chile Free Trade Agreement (CCFTA)which include obligations on investment, and the Canada-Costa Rica Free Trade Agreement (CCRFTA) which did not include an investment chapter because of the existence of a bilateral investment treaty (FIPA) with Costa Rica. Canada also adheres to the OECD Guidelines for Multinational Enterprises, a set of voluntary standards of conduct recommended by Member governments regarding the operations of these enterprises in OECD markets.

(1.09) Canada has concluded twenty-one Foreign Investment Protection Agreements (FIPAs) since the beginning of the program in 1989. FIPAs are bilateral, reciprocal agreements designed to protect and promote Canada's foreign investments abroad, particularly in developing economies, through a framework of legally-binding rights and obligations. For FIPA listing see:

http://www.dfait-maeci.gc.ca/t
na-nac/fipa-e.asp

(1.04 - 1.07) The thresholds of the Investment Canada Act (ICA) will be adjusted annually.

(1.08) Canada and members of the Andean community (Bolivia, Colombia, Ecuador, Peru and Venezuela) have held preliminary talks on a proposed free trade agreement. Canada is currently participating in investment negotiations under the FTAA negotiations, with the Central American countries Nicaragua, El Salvador, Guatemala and Honduras under the Canada-CA4 FTA negotiations and bilaterally with Singapore under the Canada-Singapore FTA negotiations. Canada is continuing to work with its NAFTA partners on the implementation and clarification of the investment provisions of the Agreement. Canada is actively participating in the ongoing discussions in the WTO Working Group on the relationship between Trade and Investment regarding a prospective multilateral framework of investment rules pursuant to the WTO Ministerial Declaration at Doha.

(1.09) Canada is continuing to engage in discussions with priority countries with regard to possible bilateral investment agreements (FIPAs).

Transparency

The final form of regulations, after approval by Governor in Council, are made public through publication in the Canada Gazette.

Proposed legislation or recent legislative amendments and enactments, can be reviewed in the Canada Gazette.

To determine the status of ongoing Bills in the House of Commons or the Senate, visit the Government Bills page on the Parliamentary Internet site (www.parl.gc.ca)

The Department of Justice Website site provides quick access to Statutes and associated Regulations in text and compressed text formats. (http://canada.justice.gc.ca)

Regulations made under the Investment Canada Act are published in the Canada Gazette. Government of Canada policy is to allow for a public comment period with respect to new regulations. As a matter of practice, any significant regulatory changes are discussed with the industry sectors that would be affected by the changes and with the legal community that represents companies in the sectors.

Further information on Canada’s investment policy and ongoing trade policy initiatives, please visit:

http://www.dfait-maeci.gc.ca/t
na-nac/menu-e.asp or http://intinvest.ic.gc.ca

Canada and its NAFTA partners continue to work to clarify aspects of the NAFTA chapter on investment based on their experience with its operation.

Non-discrimination

In January 2003, the Government of Canada initiated a review of the existing foreign investment restrictions in the Telecom sector with a view to seeing if some of these restrictions can be reduced without compromising Canada's national interests. Consultations are continuing with industry and consumer stakeholders.

In 2001, the Canada Business Corporations Act was amended to reduce the number of required Canadian residents on the Boards of Directors of CBCA incorporated companies from 50% to 25%.

Canada’s foreign investment laws are largely applied on an MFN and national treatment basis. Canada has made substantive investment commitments in the NAFTA and Canada-Chile Agreements. Any derogations from the principles of MFN and national treatment are clearly identified in these agreements.

Selected Investment Provisions by Sector

The Investment Canada Act (ICA) – see General Policy Framework for details. Except for investments in the cultural sectors, the ICA applies only to acquisitions of Canadian companies and not to greenfield investments. For further information, please visit: http://icnet.ic.gc.ca/investca
n or http://www.pch.gc.ca/culture/i
nvest/rev/english.htm

Canada Business Corporations Act(CBCA) –Boards of Directors

The Canada Business Corporations Act requires, for most federally- incorporated corporations, that 25 per cent of directors be resident Canadians. A simple majority of resident Canadian directors is required for corporations in prescribed sectors. These sectors include: uranium mining; book publishing or distribution; book sales, where the sale of books is the primary part of the corporation’s business; and film or video distribution. Corporations that, by an Act of Parliament or Regulation, are individually subject to minimum Canadian ownership requirements are required to have a majority of resident Canadian directors.

CBCA – Issues, transfers, ownership of shares

The Canadian Business Corporations Act permits corporations to 'constrain' the issue, transfer and ownership of shares in federally incorporated corporations.

The object is to permit corporations to meet Canadian ownership requirements, under certain laws set out in the Canada Business Corporations Act Regulations, in sectors where such ownership is required as a condition to operate or to receive licenses, permits, grants, payments or other benefits.

More information may be obtained by accessing the website at http://competition.ic.gc.ca/

Federal Fisheries Act

Fish processing companies which have more than 49% foreign ownership are not permitted to hold Canadian commercial fishing licenses. There is no limit on foreign ownership of fish processing companies that do not hold fishing licences.

Foreign fishing vessels are prohibited from entering Canada’s Exclusive Economic Zone except under authority of a licence or under treaty. Foreign vessels are those which are not ‘Canadian’ as defined in legislation. The Minister of Fisheries and Oceans has discretionary authority with respect to the issuance of licenses For further information, please visit: http://laws.justice.gc.ca/en/i
ndex.html

Canada Transport Act – For more details see Canada’s entry in the APEC Investment Guidebook – 5^th Edition or visit:

http://laws.justice.gc.ca/en/i
ndex.html

Book Publishing and Distribution Investment Policy Guidelines

Foreign investment in new businesses is limited to Canadian-controlled joint ventures. Foreign acquisition of existing Canadian-controlled businesses is allowed only if: a) the business is in clear financial distress and; b)Canadians have had full and fair opportunity to purchase. Indirect acquisitions are permissible subject to a net benefit test . For further information, please visit: http://www.pch.gc.ca/progs/ac-
ca/progs/eiic-csir/index_e.cfm

Broadcasting Investment Policy Guidelines

Broadcasting in Canada includes both broadcasting programming (e.g. 'over the air' broadcasting, pay and specialty services, video on demand) and broadcasting distribution (e.g. cable, direct-to-home satellite and wireless).

Legislation (the Broadcasting Act) requires that the Canadian broadcasting system be effectively owned and controlled by Canadians. A Directive by the Governor-in-Council limits foreign ownership to 20% of voting shares in a licensee and 33 1/3 % of voting shares in the case of holding companies. Therefore, foreign ownership can comprise 46.7% of a Canadian broadcasting licensee both directly and indirectly (20% directly, plus 33% of the Canadian holding company which owns the remaining 80% of the licensee). There are no restrictions on foreign ownership of non-voting shares in a holding company or licensee. In addition, the Chief Executive Officer (CEO) plus 80% of the Board of Directors of a company, which directly holds a broadcasting license, must be Canadian.

More info :

Broadcasting Act - http://laws.justice.gc.ca/en/B
-9.01/index.html

Direction to the CRTC (Ineligibility of non-Canadians)

http://www.crtc.gc.ca/eng/LEGA
L/NONCANAD.HTM

Film Distribution Investment Policy Guidelines

Foreign acquisition of a Canadian controlled distributor is not allowed. Foreign Investments in new distribution business is permissible only for importation and distribution of proprietary products (the importer owns world rights or is a major investor). Direct or indirect acquisition of foreign distribution businesses in Canada by foreign-owned companies is permissible only if the investor undertakes to reinvest a portion of its Canadian earnings “in accordance with national and cultural policies”.

Periodical Publishing Investment Policy Guidelines

Foreign investments in the periodical publishing sector, including investments to establish or, directly indirectly, acquire foreign businesses to produce and sell periodicals in Canada and to access the Canadian advertising services market must meet the net benefit test, which includes a commitment to the production of majority Canadian editorial content. Foreign acquisitions of Canadian-owned and Canadian-controlled periodical publishing businesses are not permitted.

Financial Services

In Canada there are three classes of banks, based on size of equity, for the purposes of determining ownership restrictions: small (less than Can$1 billion), medium (Can$1 billion-Can$5 billion) and large (greater than Can$5 billion). Large banks must remain widely held (investor, whether Canadian or foreign, may own up to 20% any class of voting shares and 30% any class non-voting shares). Medium size banks are allowed to be closely held, but must have a public float of 35% of voting shares. Small banks have no ownership restrictions other than "fit and proper" tests. Further information can be found at the Department of Finance, Canada website: http://www.fin.gc.ca

Telecommunications Act

Foreign ownership of Canadian common carriers is limited to 20% ownership, 33% indirect and 46.7% combined direct and indirect foreign ownership of voting shares. For further information, please visit: http://www.laws.justice.gc.ca/
en/index.html

Uranium

A minimum level of resident ownership in individual uranium mining properties of 51% at the stage of first production is required. Exceptions to this limit may be permitted if it can be established that the property is in fact ‘Canadian‑controlled’ (as defined in the Investment Canada Act). While these limits apply to the control of production facilities, there are no limits applied to foreign investment in exploration and development.

Telecommunications Review

Expropriation and Compensation

Both at the federal and provincial levels, there exists legislation which gives authority to expropriate for a public purpose in accordance with due process of law, subject to compensation. In all circumstances, a fair and equitable legal process is available to the expropriated party for the determination of compensation.

Authorities first attempt to reach agreement on appropriate compensation, failing which the action is subject to the judicial process. Compensation is based on fair market value. Valuation criteria are determined by the courts and can include such things as asset value, going concern value, and other criteria.

Protection from Strife and Similar Events

In the investment chapters of the NAFTA and Canada-Chile Free Trade Agreement Agreements, Canada has committed to according to investors of another Party, and to investments of investors of another Party, non-discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife.

Canada has also made commitments on compensation for losses within its bilateral Foreign Investment Protection Agreements.

Transfers of capital related to investments

Canada permits transfers relating to investments to be made freely and without delay.

Please see NAFTA Article 1109 for further details at: http://www.dfait-maeci.gc.ca/n
afta-alena/chap11-e.asp

Performance Requirements

Canada adheres to the obligations of the WTO Agreement on Trade Related Investment Measures. Canada has made additional and more rigorous commitments on performance requirements within the NAFTA and Canada-Chile Free Trade Agreements. Canada also has made performance requirements commitments in each of its bilateral Foreign Investment Protection Agreements.

Please see NAFTA Article 1106 for further details at: http://www.dfait-maeci.gc.ca/n
afta-alena/chap11-e.asp

Entry and Stay of Personnel

Canada has participated in meetings of the Business Mobility group to share information on visa regimes.

Under the new Immigration and Refugee Protection Act which came into force on June 28th 2002, Canada revised its Temporary Foreign Worker Program regulations to further streamline and improve efficiency.

Regulatory Visa Regimes

To facilitate information exchange, CIC maintains a website which provides information on visiting Canada. It can be accessed at http://www.cic.gc.ca/english/v
isit/index.html

Information specific to APEC economies can be found in Canada's entry in the APEC Business Travel Handbook: http://www.apecsec.org.sg/trav
book/contents.html

Short Term Business Entry

In general, business people entering Canada for short term visits require a visitor visa. Exempt APEC economies include Australia, Brunei, Hong Kong, China (HK, SAR,and HK BNO passport holders), Japan, South Korea, Mexico, New Zealand, Papau New Guinea, Singapore and the United States. Canada issues multiple entry visas for up to five years or the life of the passport, whichever is longer, but they are not granted automatically. Upon arrival in Canada, entry can be granted for a stay of up to 6 months. The duration of stay may be extended once the person is in Canada. For further information, please visit: http://www.cic.gc.ca/english/v
isit/index.html

Business Temporary Residency

Citizens from all APEC economies are required to apply for an employment authorization to enter Canada for temporary business residency. Depending on the circumstances of the individuals involved, there are several mechanisms to obtain an employment authorization for temporary business residency.

The manual on Canada's current Temporary Foreign Worker guidelines can be found at: http://www.cic.gc.ca/manuals-g
uides/english/fw/index.html

For further improvements planned, please visit Canada’s IAP chapter on Mobility of Business People.

Settlement of Disputes

Foreign and national investors have equal access to legal procedures in Canada. In addition, under the NAFTA and Canada - Chile Free Trade Agreement, as well as the FIPAs, disputes with respect to investment obligations may be reffered to investor-state dispute settlement.

Canada is a party to the Convention on the Recognition and Enforcement of the Foreign Arbitral Awards (the "New York Convention") done at New York, June 10, 1958. It entered into force for Canada on May 12, 1986.

The British Columbia International Arbitration Centre (Vancouver, B.C.) and the Quebec National and International Commercial Arbitration Centre (Montreal, Que) offer services that may be accessed by foreign investors.

While Canada has not signed or acceded to the ICSID Convention, Canada provides for use of the ICSID Additional Facility Rules and the Arbitration Rules of UNCITRAL in its bilateral investment agreements, the NAFTA and the Canada-Chile FTA.

Intellectual Property

For improvements implemented since last IAP, please visit Canada’s IAP chapter on Intellectual Property Rights.

Canada supports effective intellectual property rights protection that provide certainty and transparency to encourage marketing of goods, services, technology and entertainment; investment in R&D and innovation; and licensing arrangements (transfer of technology) to establish or expand existing business investment. Canada continues to improve intellectual property laws and their administration, to ensure adequate protection for owners of intellectual property, including effective mechanisms for enforcement of rights.

For further information, please visit Canada's IAP chapter on Intellectual Property Rights.

For further information regarding the administration and registration of intellectual property laws, please visit: http://cipo.gc.ca;

and regarding intellectual property policies, please visit: http://strategis.ic.gc.ca/SSG/
ip00001e.html

http://www.pch.gc.ca/culture/c
ult_ind/copyright.htm and

http://www.dfait-maeci.gc.ca/t
na-nac/other-e.asp#intellectua
l

For further improvements planned, please visit Canada’s IAP chapter on Intellectual Property Rights.

Avoidance of Double Taxation

The following Double Taxation Agreeements came into force since 2001: Moldova, Mongolia, Norway, and Peru.

The Protocol Amending the Tax Convention Between Canada and Australia came into force December 30, 2002.

Canada has double taxation agreements (DTAs) in force with the following countries: Algeria, Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Brazil, Bulgaria, Cameroon, Chile, Peoples Republic of China, Croatia, Cyprus, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, Estonia, Finland, France, Germany, Guyana, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Ivory Coast, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Republic of Korea, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Moldova, Mongolia, Morocco, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Papua New Guinea, Peru, Philippines, Poland, Portugal, Romania, Russia, Singapore, South Africa, Slovak Republic, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Trinidad & Tobago, Tunisia, Ukraine, United Kingdom, United States, Uzbekistan, Vietnam, Zambia, and Zimbabwe.

For further information, please visit: http://www.fin.gc.ca/treaties/
treatystatus_e.html

Competition Policy and Regulatory Reform

For improvements implemented since last IAP, please visit Canada’s IAP chapter on Competition Policy.

Canada's principal laws aimed at the protection of competition are embodied in the federal Competition Act. The Competition Act is a law of general application which establishes basic principles for the conduct of business in Canada. The purpose of the Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy; expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada; ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy; and provide consumers with competitive prices and product choices.

All mergers, whether involving foreign or domestic parties, which directly or indirectly impact Canadian markets, are subject to review under the merger provisions of the Competition Act. This review determines whether or not the transaction is likely to result in a substantial lessening or prevention of competition and could ultimately result in an application before the Competition Tribunal for remedial action.

For further information, please visit Canada’s IAP chapter on Competition Policy or http://competition.ic.gc.ca/

For further improvements planned, please visit Canada’s IAP chapter on Competition Policy.

Business Facilitating Measures to Improve the Domestic Business Environment

In response to the growing recognition of the importance of foreign direct investment to the Canadian economy, Canada's investment attraction and retention strategy consists of five key features:

- marketing Canada as the preferred location for North American investment;

- targeting new investments by multinational corporations and offering customized servicing. The government is targeting decision-makers in specific multinational companies with strategic campaigns to influence their new investment decisions;

- stimulating the formation of international technology alliances and partnerships for SMEs. The government is working to promote the growth of globally competitive companies by introducing technology-based Canadian small and medium-sized companies to international investment partners and opportunities;

- improving Canada's investment climate. The Canadian government is working to improve the investment climate by taking note and addressing the concerns of both existing and potential investors; and

- new partnerships with the provinces, municipalities, and the private sector. In Canada, provincial and municipal authorities compete among themselves for international investment capital. Investors consider this healthy, but it means that cooperation on investment initiatives is more difficult to achieve unless mutual interests and opportunities for complementary efforts are identified. The federal government continues to build partnerships with provinces and municipalities, and to work with private-sector CEOs and labour leaders to attract investment to various industry sectors.

Through, Investment Partnerships Canada (IPC), the Department of Foreign Affairs and International Trade and Industry Canada are working to attract leading international investment prospects. An investor services team has been established to:

- be a "one-stop-shop" for foreign investors by providing immediate, accurate and personal responses to information requests;

- provide investors with the investment information required, directly or through one of the many Canadian or worldwide contacts;

- develop international and NAFTA business cost comparisons for your business case including taxes and wage rates;

- organize and facilitate meetings on investment issues with ll relevant public/private sector experts and multilateral partners;

- identification of potential strategic alliance partners; and

- help solve problems and identify opportunities after the investment.

For more information, please visit: http://investincanada.gc.ca

For the latest information on Investment Partnerships Canada and assistance available to new business investors, please visit: http://investincanada.gc.ca

Other Investment Measures

A number of programs to assist business are available to both Canadian and non-Canadian businesses.

Information on government programs and services, (including incentive programs) can be obtained by contacting any Canadian Embassy/High Commission or by contacting the International FaxLink System, an automated fax delivery system used to order publications from outside of Canada. Call from a touchtone fax machine at (1 613) 944-6500. A master index of documents available via FaxLink International may be ordered from the system.

The Government of Canada Primary Internet Site (Canada Site) is the Internet electronic access point through which interested parties from around the world can obtain information about Canada, its government and its programs and services. Direct links are also provided from this site to government departments and agencies that have Internet facilities. This website may be accessed at: http://Canada.gc.ca/main_e.htm
l

Information on investment policies, Canada’s participation in international investment discussions and Canadian investment agreements; and access to an extensive collection of studies on the impact of FDI is available on the Government of Canada International Investment Policy Website at: http://intinvest.ic.gc.ca/ and on the Department of Foreign Affairs and International Trade - Trade Negotiations and Agreements Website at: http://www.dfait-maeci.gc.ca/t
na-nac/menu-en.asp . Also, users can read about Canada’s Investment Promotion Strategy and find detailed provincial and federal information on investing in Canada may be accessed at the following address at: http://investincanada.gc.ca

Improvements in Canada’s Approach to Investment Measures since 1996
*General Policy Framework*	Canada relies heavily on foreign investment to further its economic development. Foreign direct investment generates benefits to Canadian communities through increased trade opportunities, the introduction of new technologies and management practices, job creation, the payment of taxes and the purchase of goods and services locally. Canada actively seeks to promote its advantages as an investment destination. Foreign investment promotion is carried out by Investment Partnerships Canada. One of the few remaining laws regulating foreign investment is the Investment Canada Act (ICA). The stated purpose of the Act is to encourage investment in Canada by Canadians and non-Canadians that contributes to economic growth and employment opportunities and to provide for the review of significant investments (i.e., acquisitions of control by non-Canadians of Canadian businesses) in order to ensure such benefit to Canada. In most cases, the establishment of a new business in Canada by an investor making its first investment in Canada or the establishment of a new business by an existing investor where the new business is unrelated to any existing business in Canada is subject to a straightforward notification procedure, but is not generally subject to review. The Investment Canada Act provides for the review of significant acquisitions of Canadian businesses. The Act provides for the review of significant acquisitions of Canadian businesses (i.e. in 1996, direct acquisitions of Canadian businesses worth more than CDN$168 million) to ensure net benefit to Canada. The acquisition of a Canadian business involved in the sensitive areas of cultural industries (i.e., publication and distribution of books, magazines, newspapers, videos, music recordings, etc.), financial services, transportation services or uranium production is subject to the lower review thresholds regardless of the nationality of the investor or vendor. The establishment of new businesses in these cultural industries may be reviewable, if the Government so decides. Reviewable investments are allowed to proceed if they are likely to be of 'net benefit' to Canada Please see further detail of Canada’s current investment policy as described under the Current Measures Section of this IAP chapter. In 1996, Canada was a signatory to the NAFTA which included substantive investment provisions. In addition, as of January 1996, Canada was party to eight (8) bilateral Foreign Investment Protection Agreements (signed and in force): Poland, Argentina, Russian Federation, Hungary, Czech and Slovak Republics, the Ukraine and Latvia.	The threshold for review of foreign acquisitions under the Investment Canada Act was $168 million in 1996. The review thresholds of the ICA are adjusted for inflation every year.In 1999, the threshold was CDN$ 184 million, in 2000 it was CDN$ 192 million, in 2001 it was CDN$ 209 million, in 2002 it was CDN$ 218 million and in 2003 it is CDN$223 million. The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force: Armenia, Barbados, Costa Rica, Ecuador, Egypt, Lebanon, Panama, the Philippines, Romania, Thailand, Trinidad and Tobago, Uruguay, and Venezuela.
*Transparency*	In 1996, Canadian laws and regulations were readily accessible from a number of sources including the Statutes of Canada, Regulations of Canada and the Canada Gazette. They were also available to the public by request and in most libraries throughout Canada. First steps have been taken to make these laws and regulations available electronically and through the internet.	Significant progress has been made since 1996 in enhancing the electronic and internet access for Canadian laws and regulations. In addition, extensive information on Canada’s investment policies and trade agreements is now available through the following web-sites: http://intinvest.ic.gc.ca and http://www.dfait-maeci.gc.ca/t na-nac/menu-e.asp In 2001, Canada and its NAFTA partners issued Notes of Interpretation in which they clarified that they will make available to the public all documents submitted to or issued by Chapter 11 tribunals, except in limited circumstances.
*Non-discrimination*	In 1996, Canada’s foreign investment laws were largely applied on an MFN and national treatment basis. In addition, Canada extended formal commitments in this regard through its WTO and NAFTA obligations, as well as through its bilateral investment agreements. Any derogations from the principles of MFN and national treatment are clearly identified in the NAFTA and Canada-Chile FTAs. See Canada’s entry in the APEC Investment Guidebook for more details on exceptions to MFN.	The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. Derogations to MFN and NT are clearly set out. In 1997, the government recognized the need to develop a new framework for the entry of foreign banks in Canada. The present framework offers foreign banks considerable flexibility to provide financial services in Canada. They may choose to do so through Canadian financial institutions and/or regulated foreign bank branches. As well, a foreign bank may establish more than one bank or more than one branch in Canada. They are allowed to own both wholesale and retail banks and full-service and lending branches. As well, foreign banks are permitted to own the same range of investments as Canadian banks. In 2001, the Canada Business Corporations Act was amended to reduce the number of required Canadian residents on the Boards of Directors of CBCA incorporated companies from 50% to 25%.
*Expropriation and Compensation*	Both at the federal and provincial levels, there exists legislation which gives authority to expropriate for a public purpose in accordance with due process of law, subject to compensation. In all circumstances, a fair and equitable legal process is available to the expropriated party for the determination of compensation. Authorities first attempt to reach agreement on appropriate compensation, failing which the action is subject to the judicial process. Compensation is based on fair market value. Valuation criteria are determined by the courts and can include such things as asset value, going concern value, and other criteria.	The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include provisions on expropriation and compensation.
*Protection from Strife and Similar Events*	In the investment chapter of the NAFTA, Canada has committed to according to investors of another Party, and to investments of investors of another Party, non-discriminatory treatment with respect to measures it adopts of maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife. Canada has also made commitments on compensation for losses within its bilateral Foreign Investment Protection Agreements.	The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include similar provisions on strife.
*Transfers of Capital Related to Investments*	Canada permits all transfers relating to investments to be made freely and without delay. Please see NAFTA Article 1109 for further details at: http://www.dfait-maeci.gc.ca/n afta-alena/chap11-e.asp	The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include provisions on transfer of capital.
*Performance Requirements*	Canada adheres to the obligations of the WTO Agreement on Trade Related Investment Measures. Canada made additional and more rigorous commitments on performance requirements within the NAFTA. Canada also made performance requirements commitments in each of its bilateral Foreign Investment Protection Agreements.	The Canada-Chile Free Trade Agreement, which includes substantive NFTA-style provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include obligations on performance requirements.
*Entry and Stay of Personnel*	Please visit Canada’s IAP chapter on Mobility of Business Persons.	Please visit Canada’s IAP chapter on Mobility of Business Persons.
*Settlement of Disputes*	Foreign and national investors have equal access to legal procedures in Canada. In addition, under the NAFTA as well as the FIPAs, investment obligations may be enforced through both state-to-state as well as investor-state dispute settlement mechanisms. Canada is a party to the Convention on the Recognition and Enforcement of the Foreign Arbitral Awards (the "New York Convention") done at New York June 10, 1958. It entered into force for Canada on May 12, 1986. The British Columbia International Arbitration Centre (Vancouver, B.C.) and the Quebec National and International Commercial Arbitration Centre (Montreal, Que) offer services that may be accessed by foreign investors. While Canada has not signed or acceded to the ICSID Convention, Canada provides for use of the ICSID Additional Facility Rules and the Arbitration Rules of UNCITRAL in its bilateral investment agreements and in the NAFTA.	Since 1996 the Canada-Chile Free Trade Agreement as well as eight bilateral FIPAs have entered into force. These agreements include both state-to- state and investor-state dispute settlement provisions.
*Intellectual Property*	Canada supports effective intellectual property rights protection, that provides certainty and transparency to encourage marketing of goods, services, technology and entertainment; investment in R&D and innovation; and licensing arrangements (transfer of technology) to establish or expand existing business investment. Canada continues to improve intellectual property laws and their administration, to ensure adequate protection for owners of intellectual property, including effective mechanisms for enforcement of rights.	Since 1996, significant progress has been made in enhancing the transparency of Canada’s intellectual property regime through Internet access. Regarding the administration and registration of intellectual property laws please visit: http://cipo.gc.ca and regarding intellectual property policies, please visit: http://strategis.ic.gc.ca/SSG/ ip00001e.html http://www.pch.gc.ca/culture/c ult_ind/copyright.htm and http://www.dfait-maeci.gc.ca/t na-nac/other-e.asp#intellectua l
*Avoidance of Double Taxation*	Canada has double taxation agreements in force with the following countries: Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Brazil, Cameroon, Peoples Republic of China, Chile, Cyprus, Czech Republic, Denmark, Dominican Republic, Egypt, Estonia, Finland, France, Germany, Guyana, Hungary, Iceland, India, Ireland, Israel, Italy, Ivory Coast, Jamaica, Japan, Kazakhstan, Kenya, Republic of Korea, Latvia, Lithuania, Malaysia, Malta, Mexico, Morocco, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Papua New Guinea, Philippines, Poland, Romania, Singapore, Slovakia, South Africa, Spain, Sri Lanka, Sweden, Tanzania, Thailand, Trinidad & Tobago, Tunisia, United Kingdom, United States, Zambia and Zimbabwe.	The following double taxation agreements entered into force since 1996: Algeria, Austria, Bulgaria, Croatia, Czech Republic, Ecuador, Germany, Jordan, Japan, Kyrgyzstan, Luxembourg, Moldova, Mongolia, Norway, Peru, Portugal, Russia, Ukraine, Uzbekistan, Slovakia, Slovenia, Switzerland, Vietnam and Indonesia. The Protocol Amending the Tax Convention Between Canada and Australia came into force December 30, 2002.
*Competition Policy and Regulatory Reform*	Canada's principal laws aimed at the protection of competition are embodied in the federal Competition Act. The Competition Act is a law of general application which establishes basic principles for the conduct of business in Canada. The purpose of the Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy; expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada; ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy; and provide consumers with competitive prices and product choices. All mergers, whether involving foreign or domestic parties, which directly or indirectly impact Canadian markets, are subject to review under the merger provisions of the Competition Act. This review determines whether or not the transaction is likely to result in a substantial lessening or prevention of competition and could ultimately result in an application before the Competition Tribunal for remedial action. For further information, please visit Chapter 8 of Canada’s IAP chapter on Competition Policy or http://competition.ic.gc.ca/	Please visit Canada’s IAP chapter on Competition Policy.
*Business Facilitating Measures to Improve the Domestic Business Environment*	In June of 1996, the Canadian government introduced a new Investment Strategy. This new strategy was designed to increase efforts to attract foreign investment in Canada and to facilitate the growth of globally competitive companies.	The website for Investment Partnerships Canada is continually being updated with helpful information for potential investors. For more information see http://investincanada.ic.gc.ca /

Improvements in Canada’s Approach to Investment Measures since 1996

Section

Position at Base Year (1996)

Cumulative Improvements Made to Date

General Policy Framework

Canada relies heavily on foreign investment to further its economic development. Foreign direct investment generates benefits to Canadian communities through increased trade opportunities, the introduction of new technologies and management practices, job creation, the payment of taxes and the purchase of goods and services locally. Canada actively seeks to promote its advantages as an investment destination. Foreign investment promotion is carried out by Investment Partnerships Canada.

One of the few remaining laws regulating foreign investment is the Investment Canada Act (ICA). The stated purpose of the Act is to encourage investment in Canada by Canadians and non-Canadians that contributes to economic growth and employment opportunities and to provide for the review of significant investments (i.e., acquisitions of control by non-Canadians of Canadian businesses) in order to ensure such benefit to Canada.

In most cases, the establishment of a new business in Canada by an investor making its first investment in Canada or the establishment of a new business by an existing investor where the new business is unrelated to any existing business in Canada is subject to a straightforward notification procedure, but is not generally subject to review.

The Investment Canada Act provides for the review of significant acquisitions of Canadian businesses. The Act provides for the review of significant acquisitions of Canadian businesses (i.e. in 1996, direct acquisitions of Canadian businesses worth more than CDN$168 million) to ensure net benefit to Canada.

The acquisition of a Canadian business involved in the sensitive areas of cultural industries (i.e., publication and distribution of books, magazines, newspapers, videos, music recordings, etc.), financial services, transportation services or uranium production is subject to the lower review thresholds regardless of the nationality of the investor or vendor. The establishment of new businesses in these cultural industries may be reviewable, if the Government so decides. Reviewable investments are allowed to proceed if they are likely to be of 'net benefit' to Canada

Please see further detail of Canada’s current investment policy as described under the Current Measures Section of this IAP chapter.

In 1996, Canada was a signatory to the NAFTA which included substantive investment provisions. In addition, as of January 1996, Canada was party to eight (8) bilateral Foreign Investment Protection Agreements (signed and in force): Poland, Argentina, Russian Federation, Hungary, Czech and Slovak Republics, the Ukraine and Latvia.

The threshold for review of foreign acquisitions under the Investment Canada Act was $168 million in 1996. The review thresholds of the ICA are adjusted for inflation every year.In 1999, the threshold was CDN$ 184 million, in 2000 it was CDN$ 192 million, in 2001 it was CDN$ 209 million, in 2002 it was CDN$ 218 million and in 2003 it is CDN$223 million.

The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force: Armenia, Barbados, Costa Rica, Ecuador, Egypt, Lebanon, Panama, the Philippines, Romania, Thailand, Trinidad and Tobago, Uruguay, and Venezuela.

Transparency

In 1996, Canadian laws and regulations were readily accessible from a number of sources including the Statutes of Canada, Regulations of Canada and the Canada Gazette. They were also available to the public by request and in most libraries throughout Canada. First steps have been taken to make these laws and regulations available electronically and through the internet.

Significant progress has been made since 1996 in enhancing the electronic and internet access for Canadian laws and regulations.

In addition, extensive information on Canada’s investment policies and trade agreements is now available through the following web-sites:

http://intinvest.ic.gc.ca and

http://www.dfait-maeci.gc.ca/t
na-nac/menu-e.asp

In 2001, Canada and its NAFTA partners issued Notes of Interpretation in which they clarified that they will make available to the public all documents submitted to or issued by Chapter 11 tribunals, except in limited circumstances.

Non-discrimination

In 1996, Canada’s foreign investment laws were largely applied on an MFN and national treatment basis. In addition, Canada extended formal commitments in this regard through its WTO and NAFTA obligations, as well as through its bilateral investment agreements. Any derogations from the principles of MFN and national treatment are clearly identified in the NAFTA and Canada-Chile FTAs.

See Canada’s entry in the APEC Investment Guidebook for more details on exceptions to MFN.

In 1997, the government recognized the need to develop a new framework for the entry of foreign banks in Canada. The present framework offers foreign banks considerable flexibility to provide financial services in Canada. They may choose to do so through Canadian financial institutions and/or regulated foreign bank branches. As well, a foreign bank may establish more than one bank or more than one branch in Canada. They are allowed to own both wholesale and retail banks and full-service and lending branches. As well, foreign banks are permitted to own the same range of investments as Canadian banks.

In 2001, the Canada Business Corporations Act was amended to reduce the number of required Canadian residents on the Boards of Directors of CBCA incorporated companies from 50% to 25%.

Expropriation and Compensation

The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include provisions on expropriation and compensation.

Protection from Strife and Similar Events

In the investment chapter of the NAFTA, Canada has committed to according to investors of another Party, and to investments of investors of another Party, non-discriminatory treatment with respect to measures it adopts of maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife.

Canada has also made commitments on compensation for losses within its bilateral Foreign Investment Protection Agreements.

The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include similar provisions on strife.

Transfers of Capital Related to Investments

Canada permits all transfers relating to investments to be made freely and without delay.

Please see NAFTA Article 1109 for further details at: http://www.dfait-maeci.gc.ca/n
afta-alena/chap11-e.asp

The Canada-Chile Free Trade Agreement, which includes substantive provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include provisions on transfer of capital.

Performance Requirements

Canada adheres to the obligations of the WTO Agreement on Trade Related Investment Measures. Canada made additional and more rigorous commitments on performance requirements within the NAFTA. Canada also made performance requirements commitments in each of its bilateral Foreign Investment Protection Agreements.

The Canada-Chile Free Trade Agreement, which includes substantive NFTA-style provisions on investment, entered into force on June 2, 1997. In addition, since 1996, 13 bilateral FIPAs were concluded and entered into force. These agreements include obligations on performance requirements.

Entry and Stay of Personnel

Please visit Canada’s IAP chapter on Mobility of Business Persons.

Settlement of Disputes

Foreign and national investors have equal access to legal procedures in Canada. In addition, under the NAFTA as well as the FIPAs, investment obligations may be enforced through both state-to-state as well as investor-state dispute settlement mechanisms.

Canada is a party to the Convention on the Recognition and Enforcement of the Foreign Arbitral Awards (the "New York Convention") done at New York June 10, 1958. It entered into force for Canada on May 12, 1986.

Since 1996 the Canada-Chile Free Trade Agreement as well as eight bilateral FIPAs have entered into force. These agreements include both state-to- state and investor-state dispute settlement provisions.

Intellectual Property

Canada supports effective intellectual property rights protection, that provides certainty and transparency to encourage marketing of goods, services, technology and entertainment; investment in R&D and innovation; and licensing arrangements (transfer of technology) to establish or expand existing business investment. Canada continues to improve intellectual property laws and their administration, to ensure adequate protection for owners of intellectual property, including effective mechanisms for enforcement of rights.

Since 1996, significant progress has been made in enhancing the transparency of Canada’s intellectual property regime through Internet access.

Regarding the administration and registration of intellectual property laws please visit: http://cipo.gc.ca

and regarding intellectual property policies, please visit: http://strategis.ic.gc.ca/SSG/
ip00001e.html

http://www.pch.gc.ca/culture/c
ult_ind/copyright.htm and

http://www.dfait-maeci.gc.ca/t
na-nac/other-e.asp#intellectua
l

Avoidance of Double Taxation

Canada has double taxation agreements in force with the following countries: Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Brazil, Cameroon, Peoples Republic of China, Chile, Cyprus, Czech Republic, Denmark, Dominican Republic, Egypt, Estonia, Finland, France, Germany, Guyana, Hungary, Iceland, India, Ireland, Israel, Italy, Ivory Coast, Jamaica, Japan, Kazakhstan, Kenya, Republic of Korea, Latvia, Lithuania, Malaysia, Malta, Mexico, Morocco, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Papua New Guinea, Philippines, Poland, Romania, Singapore, Slovakia, South Africa, Spain, Sri Lanka, Sweden, Tanzania, Thailand, Trinidad & Tobago, Tunisia, United Kingdom, United States, Zambia and Zimbabwe.

The following double taxation agreements entered into force since 1996: Algeria, Austria, Bulgaria, Croatia, Czech Republic, Ecuador, Germany, Jordan, Japan, Kyrgyzstan, Luxembourg, Moldova, Mongolia, Norway, Peru, Portugal, Russia, Ukraine, Uzbekistan, Slovakia, Slovenia, Switzerland, Vietnam and Indonesia.

The Protocol Amending the Tax Convention Between Canada and Australia came into force December 30, 2002.

Competition Policy and Regulatory Reform

For further information, please visit Chapter 8 of Canada’s IAP chapter on Competition Policy or http://competition.ic.gc.ca/

Please visit Canada’s IAP chapter on Competition Policy.

Business Facilitating Measures to Improve the Domestic Business Environment

In June of 1996, the Canadian government introduced a new Investment Strategy. This new strategy was designed to increase efforts to attract foreign investment in Canada and to facilitate the growth of globally competitive companies.

The website for Investment Partnerships Canada is continually being updated with helpful information for potential investors. For more information see http://investincanada.ic.gc.ca
/

Chapter 4: Investment

Objective

APEC economies will achieve free and open investment in the Asia-Pacific region by:

Guidelines

Collective Actions

Short-term

Medium-term

Long-term

The current CAP relating to investment can be found in the Investment Collective Action Plan.

Canada’s Approach to Investment in 2003

Canada’s Approach to Investment Measures in 2003

Section

Transparency

Intellectual Property

Improvements in Canada’s Approach to Investment Measures since 1996