Canada to tighten foreign investment rules to tackle national security risks

OTTAWA (Reuters) - Canada on Wednesday proposed legislation to beef up the country's foreign investment rules, which Ottawa says would help the government better deal with "changing threats that may arise from foreign investments."

Proposed amendments to the Investment Canada Act (ICA) include power to impose conditions during a national security review of foreign investments and stronger penalties for non-compliance, Canada's Industry Minister Francois-Philippe Champagne said in a statement.

Champagne said in the statement that an updated ICA would help Canada to continue to act decisively when investments threaten its national security.

The proposed amendments to the ICA are designed make the national security review of investments "more efficient and flexible."

Last month, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals after a national security review.

(Reporting by Ismail Shakil in Ottawa; Editing by Leslie Adler and David Gregorio)