WT/TPR/S/246 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIME 
(1) GENERAL FRAMEWORK  
1. Canada's framework for trade and investment policy is based on shared competence between 
the federal government and Canada's ten provinces.  The scope of federal a nd provincial legislative 
powers is defined in Part VI of the Constitution Act, 1867, as amended.  Parliament has exclusive 
jurisdiction over issues such as the regulation of tr ade and commerce;  intellectual property rights;  
and criminal law.  Provinces have legislative authority in areas such as provincial taxation, 
non-renewable natural resources, forestry resour ces and electrical energy.  Agriculture and 
immigration are recognized as being under shared fe deral and provincial juri sdiction, with federal 
legislation prevailing (Table AII.1). 
2. Differences in trade and investment policies a nd practices between the federal and provincial 
governments as well as across provinces, led to an Agreement on Internal Trade (AIT), which has 
been in effect since 1995.1  Its objective is to "reduce and eliminat e, to the extent possible, barriers to 
the free movement of persons, goods, services and i nvestment within Canada, and to establish an 
open, efficient and stable domestic market".2  It includes all provinces and territories, with the 
exception of Nunavut, which has observer status.  It incorporates a dispute settlement mechanism 
accessible to governments, individuals, and the privat e sector.  Since Canada's previous review, there 
have been five protocols of amendment to the AI T (Box II.1).  In addition, a number of provinces 
have negotiated, in various configurations, arra ngements that aim for more ambitious outcomes in 
certain areas such as public procurement, labour  mobility and the recognition of qualifications. 
3. The power to negotiate and ratify treaties rests so lely with the federal executive.  Following a 
commitment by the Prime Minister in 2006 to give Parliament a more important role in the conclusion 
of international agreements, the Minister of Forei gn Affairs has, since 2008, been required to table all 
treaties before the House of Commons.3  There is a 21-day period from the date of tabling before the 
Government may take any action towards ratificati on of these treaties.  Once tabled, the House of 
Commons may decide whether to consider them, fo r instance through initiating a debate or voting on 
a motion.  The Government is not bound by proposed ch anges to the text of a treaty nor to its rejection 
by Parliament.  Treaties are made effective do mestically through adjustments in legislation, 
regulations or policy.  Should fede ral legislation be deemed not to be in conformity with treaty 
obligations, the Government will in troduce the necessary legislation in Parliament where it may be 
adopted or refused.  The authorities indicate that if the Parliament of Canada refuses to adopt 
legislation necessary to implement a treaty, the Gove rnment will not proceed with its ratification.  
Provinces and territories have exclusive authorit y to implement Canada's international treaty 
obligations in areas that fall within their jurisdiction. 
4. Overall responsibility for the conduct and formul ation of international trade policy lies with 
the Minister of International Trade, supported by  Foreign Affairs and International Trade Canada 
(DFAIT).  Cabinet approval is re quired for proposed trade policy initiatives.  In the policy-making 
process, various formal and informal consultati on mechanisms are in place between the federal 
government and provinces and territories.  Federal, provincial, and territorial trade ministers meet 
annually, complemented by annual meetings of deputy  ministers.  There are also regular meetings of 
federal, provincial and territorial trade policy officials (known as the C-Trade process).  Provinces and 
                                                      
1 Progress report on achievements since the AIT entered in to effect (until January 2011).   Viewed at:  
http://www.ait-aci.ca/index-en/progress.htm. 
2 Article 100, Agreement on Internal Trade. 
3 Governor-General's Speech from the Throne, 4 April 2006.  Viewed at:  http://www.pm.gc.ca/ 
eng/media.asp?id=1087. Canada WT/TPR/S/246 
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territories may be involved in the negotiation of trade agreements in  areas wholly or partially under 
their jurisdiction.  Parliamentarians are i nvolved through committee hearings and studies on 
international trade issues.  DFAIT consults with  the Federation of Canadian Municipalities on trade 
issues through a joint working group.  It also consults  broadly with other stakeholders through expert 
advisory groups;  a public outreach programme;  a nd a web-based consultative process.  DFAIT uses 
the Canada Gazette  as a means of informing and soliciting views on its initiatives.  Provincial 
authorities also consult stakeholders. 
Box II.1:  Agreement on internal trade:  key features  
Guiding principles - Non-discrimination and right of en try and exit for persons, goods,  services and investments 
- ensuring policies and practices do not create obstacles to trade - ensuring non-trade objectives which deviate from  the above have a minimal adverse effect 
- reconciliation as basis for eliminating trade barriers caused by differences in standards and regulations 
- transparency 
Priority sectors Government procurement;  environmental protecti on;  consumer-related measures a nd standards;  labour mobility;   
investment;  agricultural and food goods;  alcoholic beve rages;  communications;  transport;  natural resource 
processing;  and, energy 
Protocols of 
amendment since 
2007 (key changes) Protocol 7 (2007):  Dispute resolution procedures a nd government procurement.  Amendments streamline 
consultation provisions and allow for a dispute resolu tion panel under the AIT to be reconvened to determine 
whether the response of a non-compliant government is consistent with a panel's recommendations.  Certain 
government procurement provisions are clarified 
 Protocol 8 (2009):  Government procur ement disciplines, dispute resolution pr ocedures and investment:  changes 
clarify and streamline the process for procurement comp laints against the provinces, and provide for greater 
transparency.  Changes also permit the appointment of a panellist should a party fail to do so, as a means of 
ensuring that disputes can proceed unde r the AIT dispute resolution process.  Changes also clarify the types of 
investment incentives to be avoided 
 Protocol 9 (2009):  Labour mobility:  Amendments provide for a worker certified for an occupation by a 
regulatory authority of one party to be recognized as qua lified to practice that occupation by others.  Exceptions 
need to be identified and justified 
 Protocol 10 (2009):  Amendments provide for gr eater enforcement of AIT panel decisions for 
government-to-government disputes, including the introduc tion of monetary penalties for continued failure to 
bring a measure into compliance with the AIT:  an appellate  panel process;  and new qua lifications for panel roster 
members 
 Protocol 11 (2010):  Revised chapter on agriculture a nd food goods.  These revi sions expand the scope of 
non-discriminatory provisions to cove r all the technical regulations (for  example dealing with terminology, 
symbols, packaging, marking or labelling requirements), st andards, sanitary measures, or conformity assessment 
procedures applied to agriculture or agri-foods, except t hose required to maintain the supply management systems 
Dispute settlement Since 1995, there have been 51 disputes under the following chapters:  labour mobility (26);  agricultural a nd food 
goods (10);  procurement (5);  natural resources processi ng (4);  alcoholic beverages (3);  investment (1);  
consumer-related measures and standard s (1);  and environmental protection (1).  Of these, 9 disputes have 
proceeded beyond consultations to the panel hearing stage 
Source:  AIT online information.  Viewed at:  http://www. ait-aci.ca/in dex_en.htm.  
 
5. The objective of Canada's strategic long-term ec onomic plan (Advantage Canada) is to build a 
stronger and more competitive economy.  It is based on four core principles:  focusing government;  
creating new opportunities and choices for people;  investing in sustainable growth;  and freeing 
businesses to grow and succeed.  Key targets are to create competitive tax, fiscal, entrepreneurial, 
knowledge, and infrastructure advantages.4 
6. The Federal Government's trade and investme nt policy objectives are set out in its Global 
Commerce Strategy (GCS)(2007), which builds on the Government's overarching objectives set out in 
Advantage Canada.5  In the GCS the Government has identif ied priority markets:  the Americas 
(Brazil, Latin America and the Caribbean, Mexico, a nd the United States);  the Asia Pacific region 
                                                      
4 Department of Finance Canada (2006), Advantage Canada:  Building a Strong Economy for 
Canadians .  Viewed at:  http://www.fin.gc.ca/ec2006/plan/pltoc-eng.asp. 
5 Government of Canada (2009) GCS-en.pdf;  and Department of Finance Canada (2006). WT/TPR/S/246 Trade Policy Review 
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(ASEAN, Australia and New Zealand, China, India, Japan, and Korea);  and in Europe and the Middle 
East (Europe, Russia, and the Gulf Cooperation Co uncil).  On the trade front, the Government's 
efforts are focused on expanding Canadian access to  global markets and networks through the DDA 
negotiations;  stronger commercial linkages within  NAFTA;  bilateral free-trade agreements and 
foreign investment promotion and protection agreements (below);  air services agreements 
(Chapter IV(7)(i));  and innovation and science and technology (S&T) c ooperation arrangements. 
7. An important reform effort over the review period has been the 2007 Cabinet Directive on 
Streamlining Regulation (CDSR).6  This applies to all federal departments, agencies and Crown 
Corporations with regulatory authority, as well as to the Governor in Council and ministerial 
regulations.  It aims to ensure that the Federal Government's regulatory activities result in the greatest 
overall benefit to Canadians.  When regulating, the Federal Government is committed to protecting 
and advancing the public interest;  promoting a fair and competitive market economy;  making 
decisions based on evidence;  creating accessible, unde rstandable, responsive, efficient, and effective 
regulation in a timely, coherent manner with mi nimal duplication.  Emphasis is placed on using 
international standards to the greatest extent possible.  The new approach introduces a lifecycle 
approach to the development of new regulations (Table II.1). 
Table II.1 
CDSR lifecycle approach to regulatory development, 2007 
Regulatory steps Depart mental responsibilities 
Regulatory process 
requirements Assess regulatory proposals to see where approval pro cesses can be streamlined and where resources are 
to be focused 
 
Regulatory consultation Consult with interest ed and affected parties during the regulat ory process.  In addition, proposals mus t be 
published in the Canada Gazette , Part I, with a comment period of 30 days (75 days for new and changed 
technical regulations that may affect international trade). 
 
Identifying and assessing 
public policy issues Assess public policy issues, including potential risks, and demonstrate that government intervention is 
needed (including assessment of cau ses and impact of the public policy issue, review of evidence-based 
assessments and scientific evidence).  For significan t proposals, departments are encouraged to seek 
independent review of risk assessments.  
Setting public policy objectives When it is determined that govern ment intervention is required, set public policy objectives th at outline 
tangible outcomes for Canadians.  
Selecting designing and assessing regulatory responses Assess effectiveness and a ppropriateness of regulatory and non-regul atory instruments:  selecting the 
appropriate mix of government instruments, using inte rnationally accepted best practices where possible;  
assess legal implications;  comply with internati onal obligations;  coordina te and cooperate within 
government, with provinces and internationally, to  maximize effectiveness of regulations and to 
minimize duplication;  analyse benefits a nd costs of regulation;  recommend options. 
 
Planning for implementation, compliance and enforcement  Put in place processes to implement regulatory progr ammes and manage human and financial resources 
as well as developing and implementing compliance and enforcement strategies. 
Measuring, evaluating and 
reviewing regulation Ensure that regulation continually meets its initial policy objectives and renew regulatory frameworks on 
an ongoing basis. 
 
Planning and reporting to 
Canadians Development of regulatory plans and priorities for the upcoming year(s) and report on these as well as 
performance and regulatory review. 
 
Source: Treasury Board of Canada Secretariat (2007), Cabinet Directive on St reamlining Regulation .  Viewed at:  
 http://www.tbs-sct.gc.ca/ri-qr/ directive/direc tive01-eng.asp. 
                                                      
6 For the text of the CDSR see Treasury Board of Ca nada Secretariat online information.  Viewed at:  
http://www.tbs-sct.gc.ca/ri-qr/directive/directive00-eng.as p.  The 2007 Directive replaces the Government of 
Canada Regulatory Policy (1999). Canada WT/TPR/S/246 
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8. When regulations are developed there are require ments to:  clearly identify issues and assess 
risks, choose the right instruments (which may be instruments other than regulations7), and undertake 
cost-benefit analysis for medium and high impact re gulations.  A three-tiered approach to regulation 
has been developed based upon whether risk is low, medium or high.  For high impact regulations, a 
Performance Measurement and Evaluation Plan (PMEP) must be completed, to ensure that regulatory 
activities continue to meet their initial policy objectives.8  Once regulations are in force, their 
performance must be measured, reported, and reviewed. 
9. The Federal Government has invested resour ces in building up the capacity of government 
officials to implement the directive, including throug h the issuance of guidelines and tools;  creating a 
Centre of Regulatory Expertise (CORE), as well as  developing Regulatory Cooperation Plans (RCPs) 
for the seven government departments that account for the largest volumes of regulations (Health 
Canada;  Environment Canada;  Canadian Food In spection Agency;  Fisheries and Oceans Canada;  
Transport Canada;  Citizenship and Immigr ation Canada;  and, Industry Canada).9 
10. The authorities note that, while the CDSR contains provisions requiring departments and 
agencies to limit cumulative administrative burden, it  does not focus on the elimination of regulations.  
However, Canada's 2010 Federal Budget proposes measu res to address this through the announcement 
of a Red Tape Reduction Commission, which will involve Parliamentarians and representatives from 
the private sector to review federal regulations in  areas where reform is mo st needed to reduce the 
burden of compliance, especially on small busines ses, while safeguarding health and safety.  The 
Commission will be asked to pr ovide specific recommendations. 
(2) INVESTMENT REGIME  
11. There have been no changes to the permissible forms of legal business structure in Canada 
since its last review:  these remain the corporation, sole proprietorship, partnership, and cooperative.  
Variations on these basic business structures include jo int ventures, branch office, and subsidiaries.  
Foreign firms may carry out activities in Canada th rough a branch or incorporate in Canada as a 
subsidiary.  Branch offices of foreign companies must comply with the Investment Canada Act and 
provincial registration and licensing requirements.   Branch offices and subsidiaries of foreign 
corporations must comply with the relevant inco rporating statute and provincial registration and 
licensing requirements. 
12. Entities may incorporate as corporations, federally  under the Canada Business Corporations 
Act (CBCA) or in one of the provi ncial and/or territorial jurisdic tions.  Incorporation under the CBCA 
confers the right to carry on business anywhere in  Canada.  All types of businesses may incorporate 
under the CBCA with the exception of banking, insuran ce, trust and loan companies (Chapter IV(6)).  
Under the CBCA, corporations must have a register ed office within Canada, and at least 25% of the 
directors must be resident Canadians.  If the corporat ion has less than four directors, then at least one 
must be a resident Canadian.  Corporations that, by  act of parliament or regulation, are individually 
subject to minimum Canadian ownership requirement s must have a majority of resident Canadian 
                                                      
7 Instruments could range from coercive to voluntary, for example, laws, legal ag reements or contracts, 
MOUs, codes, standards, voluntary initiatives, information. consultation, letters of intent, or fiscal instruments. 
8 Regulations that are expected to generate costs or benefits valued at more than Can$100 million in 
present value or more than Can$10 million annually based on a minimum 10-year forecast and 8% discount rate. 
9 For the guidelines and tools issued by  the Treasury Board Secretariat, see 
http://www.regulation.gc.ca. WT/TPR/S/246 Trade Policy Review 
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directors (Table AII.2).  Canada operates a same-day on-line service for processing incorporation 
certificates, at a fee of Can$200.10  Fees for non-online processing remain Can$250. 
13. Under the Canada Cooperatives Act, at least 25%  of the directors of cooperatives must be 
resident Canadians. 
14. As set out in the Global Commerce Strategy ( section (1) above), the Government's objective 
on the investment side, is to boost Canada's shar e of global investment and innovation.  Component 
activities include an investment champions pr ogramme, which involves outreach by Canadian 
business leaders to prospective investors;  new i nvestment promotion tools and outreach activities;  
investor aftercare services;  and a number of ne w global value chain initiatives.  Other programmes 
include helping Canadian companies to particip ate in global innovation networks and expanding 
Canada's Trade Commissioner Service. 
15. In the context of this Review, the authoriti es noted that the Government's emphasis is on 
attracting new (green and brown field) investme nt.  However, new businesses account for only around 
one-fifth of foreign direct investment into the country , a trend that has remained largely constant since 
the mid 1980s.11 
(i) Investment Canada Act 
16. The Investment Canada Act (1985, as amended)  and its implementing regulations govern the 
establishment of new businesses in Canada, and acquisition of control of existing business by 
non-Canadians.  The purpose of the Act is to "provi de for the review of significant investments in 
Canada by non-Canadians in a manner that encour ages investment, economic growth and employment 
opportunities in Canada and to provide for the revi ew of investments in Canada by non-Canadians 
that could be injurious to national security".12  The Minister of Industry, through Industry Canada, is 
responsible for administering the provisions of the Act as they relate to foreign investments in all 
sectors except for cultural businesses, which is th e responsibility of the Minister of Canadian 
Heritage, and administered through Canadian Heritage.13 
17. A review of the Investment Canada Act (and the Competition Act) was initiated in 2007, with 
the establishment of a Competition Policy Review Pa nel.  The Panel issued recommendations in 2008, 
which included:  amending the Investment Canada Act to reduce barriers to foreign investment by 
increasing review thresholds;  intr oducing a national security test;  reversing the onus on government 
to show that an investment is contrary to the national interest before disallowing a transaction;  
increasing transparency and predictability;  and preser ving a distinct approach for the cultural sector 
while setting in train a review of Canada's cultu ral policies.  It also recommended liberalizing 
investment restrictions in air transport, uranium mining, and telecommunications and broadcasting, and removing the de facto  ban on mergers in the financial services sector (Table AII.2)
14 
                                                      
10 Industry Canada online information.  Viewed a t:  http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/home. 
11 Over the 12 months from October 2009 to September 2010, the ratio of acquisitions to new business 
was 78:22;  the ratio for 1985 to 2010 was 77:23. 
12 Investment Canada Act, Section 2. 
13 The term "cultural business" covers publication, distribution, and sale of books, magazines, 
periodicals, newspapers and music;  and production, distri bution, sales, and exhibition of film, video recordings, 
and audio and video music recordings (Investment Canada Act, Section 14.1(5)). 
14 Industry Canada online information.  Viewed at:  http://www.ic.gc.ca/eic/site/cprp-gepmc.nsf/ 
eng/home. Canada WT/TPR/S/246 
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18. As a consequence of the Competition Po licy Review Panel's recommendations, the 
Investment Canada Act was amende d in 2009.  The amendment included a number of changes to the 
net benefit review process (see below):  raising the general review threshold that applies to investors 
from WTO Members (except for investments in cultu ral businesses) to Can$1 billion over a four-year 
period;  changing the basis of this review th reshold from the book value of gross assets to the 
enterprise value;  eliminating the Can$5 million sec tor-specific review threshold for transportation 
services, financial services, and uranium production;  a nd requiring the Minister to justify decisions to 
disallow an investment.15  These amendments entered into force in March 2009, except for 
amendments to raise the review threshold and change  the basis for review to enterprise value, which 
will come into force once regulations setting out  the method for calculating enterprise value are 
finalized. 
19. The 2009 amendments introduced a national securi ty review process through a new Part IV.1 
on "Investments Injurious to National Security".  This amendment allows for the review of 
investments on national security grounds if the Mini ster of Industry, afte r consultation with the 
Minister of Public Safety and Emergency Prepar edness, considers that the investment could be 
injurious to national security and the Governor in  Council, on recommendation of the Minister of 
Industry, makes an order for review.16  The concept of national security is not defined.  The 
time-periods for the review process are set out in the National Security Review of Investments Regulations.
17  At the end of the review process the Minist er, after consultations with the Minister of 
Public Safety and Emergency Preparedness, must su bmit a report to the Governor in Council.  On the 
basis of this report, the Governor in Council may re quire investors not to implement the investment;  
to accept terms and conditions relating to the impl antation of the investment;  to provide written 
undertakings;  or to divest themselves of control of  the Canadian business or their investment in the 
entity. 
20. Under the Investment Canada Act, all foreign dir ect investment that is not subject to review 
(see below) must be notified no later than 30 days after the investment takes place to Canadian 
Heritage or Industry Canada.18  Between 2006 and 2010, Industry Ca nada received an average of 
573 notifications annually, and Canadian Her itage received an annual average of 20. 
21. Foreign investment in existing businesses in Cana da, above certain thres holds, is subject to 
review, which involves the application of a ne t benefit test.  Until the increased Can$1 billion 
threshold enters into effect (see above), the thr eshold for investors from WTO Members is determined 
annually according to a set formula and becomes effe ctive on 1 January each year.  A summary of the 
review requirements set out in the Act and its impl ementing regulations are summarized in Table II.2.  
According to the Competition Policy Review Panel, reviews often involve foreign investors providing 
specific undertakings to address the net benefit crite ria, although they are rarely made public for 
reasons of commercial confidentiality. 
22. Industry Canada reviewed and approved on av erage 33 acquisitions per year between 2006 
and 2010;  one proposal was denied.19  Canadian Heritage reviewed an average of eight during the 
                                                      
15 Industry Canada online information.  View ed at:  http://www.ic.gc. ca/eic/site/ica-lic.nsf/ 
eng/lk51018.html. 
16 This includes new investments, direct acquisitions, and indirect acquisitions. 
17 National Security Review of Investments Regula tions.  Viewed at:  http://www.ic.gc.ca/eic/site/ 
ica-lic.nsf/eng/lk50937.html. 
18 This includes foreign investment to establish a new business or to acquire control of an existing one. 
19 In 2008, the Minister of Industry rejected the proposed Can$1.3 billion acquisition of the information 
systems and geospatial businesses of MacDonald, Dettwiler and Associates Ltd. (MDA) by U.S.-based Alliant 
Techsystems Inc. (ATK). WT/TPR/S/246 Trade Policy Review 
Page 16 
 
 
same period, and denied one.  Since the enactme nt of the Investment Canada Act only 4 proposals 
have been rejected, all of which were in cultural industries.  On 3 November 2010, the Minister of 
Industry sent a notice to BHP Billiton of Australia indicating that "he was not satisfied" that its proposed transaction to take over Potash Corporation of Saskatchewan Inc. was likely to be of net 
benefit to Canada.  According to the Act, BHP B illiton had 30 days (from the date of the notice) to 
make any additional representations and submit any additional undertakings.  The authorities note that 
in November 2010, BHP Billiton announced that it ha d withdrawn its application for review.  The 
review process was terminated and since there w as no longer a transaction to review under the Act, 
there was no final decision to be made by the Minister.  Over the period 2006-10, the average 
completion time for a review by Industry Canada  was 56 days.  Decisions issued by Canadian 
Heritage took an average of 63 days. 
Table II.2 
Investment Canada Act:  Summary of review requirements 
Procedures: 
Foreign investments are subject to review if they fall over cer tain value thresholds (below).  Reviews are undertaken by the Mi nister of 
Industry or by the Minister of Canadian Heritage.  An investment  which is renewable can only be implemented if the Minister is 
"satisfied" that it is likely to be of net benefit to Canada.  Investors must send a completed application form to the respecti ve Minister.  If 
the Minister does not notify the investor about the outcome of the review within 45 days of recei ving it, the investment is dee med 
approved.  The Minister may extend this period for additional 30 da ys and if so, must notify the i nvestor in advance.  Further extensions 
are permitted with the mutual consent of  both the Minister and the investor.  
General thresholds: 
WTO Members: 
Direct acquisitions:  Can$299 million ( 2010);  Can$312 million (2009);  Can$295 mill ion (2008);  and Can$281 million (2007).
Indirect transactions (transactions involving  acquisition of shares of the parent compan y outside of Canada that owns subsidiar ies in 
Canada):  Not reviewable, but s ubject to notification requirements.  
Non-WTO Members: 
Direct acquisitions:  Can$5 million (or Can$ 299 million if the ex isting business is controlled by a WTO-Member investor)
Indirect transactions:  Can$50 m illion (unless assets acquired are 50%  or more of the total global assets of the business, in w hich case the 
threshold is Can$5million).  
Sector-specific thresholds for cultural business 
WTO and non-WTO Members: 
Direct acquisitions:  Can$5 million 
Indirect acquisitions:  Can$50 million  
Net benefit criteria: 
(a) the effect on the level of economic activity in Canada;  on employment;  on resource processi ng;  on the utilization of par ts and 
services produced in Canada;  and on expor ts from Canada;  (b) the degree and signifi cance of participation of Canadians in the  Canadian 
business or new Canadian business and in an y industry or industries in Canada;  (c) the effect of the investment on productivit y, industrial 
efficiency, technological development, produc t innovation and product variety in Canada;  (d) the effect of the investment on c ompetition 
within any industry in Canada;  (e) the compatibility of the i nvestment with national industria l, economic and cultural policie s, taking into 
account policy objectives enunciated by the federal government or by any provincial legislature likely to be significantly affe cted by the 
investment;  (f) the contribution of the investment  to Canada's ability to compete in world markets  
 
Source : Industry Canada online information.  Viewed at:  http ://www.ic.gc.ca/eic/site/ica-lic .nsf/eng/home;  Department 
 of Canadian Heritage online information.  Viewed  at:  http://www.pch.gc.ca/ pc-ch/org/sect r/ac-ca/eiic-
 csir/index-eng.cfm.  
23. Notifiable investments in certain cultu ral businesses may be reviewed if the 
Governor-in-Council considers that a review would be in the "public interest" and, on 
recommendation of the Minister of Canadian Heritage, issues an Order-in-Council to that effect.  The investor concerned must be informed that a review will take place within 21 days of the notification.  
The cultural businesses subject to this provision are lis ted in Schedule IV of the Investment Canada Canada WT/TPR/S/246 
 Page 17 
 
 
Regulations.20  According to the authorities, 12 reviews have been undertaken over the past 5 years, 
all of which were approved. 
(ii) Foreign investment limitations by sector 
24. Guidelines issued under the Investment Canada Act as well as other federal statutes contain 
foreign direct investment limitations in fishing, mining, air transport, book publishing and 
distribution, periodical publishing, broadcasting,  film distribution, and telecommunications 
(Table AII.2).  The only change to these statutes since Canada's previous review was the removal of foreign ownership restrictions on Canadian satellite carriers in July 2010.  Public consultations are 
ongoing regarding possible policies on the rema ining foreign equity restrictions in 
telecommunications (Chapter IV(5)(i)).
21  A Review of the Revised Foreign Investment Policy in 
Book Publishing was launched in July 2010 and is still underway.22 
(iii) Investment promotion 
25. The Federal Government body charged with inv estment attraction and promotion activities is 
the Invest in Canada Bureau, under the remit of DFAIT.  It is mandated to promote and attract 
greenfield investments and expansions of existi ng foreign-owned businesses in Canada.  The Bureau 
launched the Investment Promotion and Attracti on Program in 2006 in response to an increasingly 
competitive global environment for foreign direct investment, changing economic realities, and the 
perceived need for a much more proactive and target ed approach to attracting investment.  Increased 
funding from the Federal Government over a five -year period beginning 2008-09 has been made 
available to the Invest in Canada Bureau to deve lop and deliver initiatives related to its Investment 
Champions Program and enhance investment attraction. 
(iv) International agreements containing investment provisions 
26. Canada is party to a number of agreements to  protect Canadian investors abroad.  OECD 
codes cover investments made in other developed countries.23  Most of Canada's foreign investment 
promotion and protection agreements (FIPAs) are base d on the model of the investment chapter of the 
North American Free Trade Agreement (NAFTA).24  As of September 2010, Canada had 24 FIPAs in 
force.  One of the objectives of the Global Commerc e Strategy (see above) is to double the number of 
concluded FIPAs within five years.  To this e nd Canada has concluded or signed FIPAs with five 
countries, and renegotiated several existing ones.  Th ere are investment chapters in a number of the 
preferential trade agreements that Canada has si gned.  Additionally, over the period under review, 
Canada has signed new MOUs on investment with  Chile;  Chinese Taipei;  and Hong Kong, China 
(Table II.3). 
                                                      
20 Investment Canada Regulations.  Viewed a t:  http://www.ic.gc.ca/ei c/site/ica-lic.nsf/eng/ 
ik51020.html. 
21 Industry Canada online information.  Viewed at:  http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/ 
sf09919.html. 
22 Canadian Heritage online information.  Viewed at:  http://www.pch.gc.ca/eng/ 
1272486502392/1272487307376. 
23 The Code of Liberalization contains legally bi nding obligations regarding the liberalization of 
specified capital movements.  The National Treatment Instrument contains a non-binding commitment to accord 
national treatment to foreign-owned or controlled firms in the post-establishment phase. 
24 Common features include a broad definition of c overed investments;  national and MFN treatment 
obligations with regard to pre- and post- establishment phases;  standards of treatment and protection;  rules 
concerning expropriation and compensation payable;  fre e transfer of funds;  and dispute settlement between 
investors and the host state through international arbitration. WT/TPR/S/246 Trade Policy Review 
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27. Canada has 87 double taxation agreements in force (as of December 2010).25  The authorities 
note that Canada's policy in this area is based on the OECD Model Tax Conve ntion on Income and on 
Capital, modified to take into account th e specificities of the Canadian tax system. 
Table II.3 
Canada's participation in inve stment-related agreements, 2010 
Free trade agreements containing investment provisions:  
NAFTA (Chapter 11);  Chile;  Peru;  Colombia;  Panama. 
 
Foreign investment promotion and protection agreements (BITS or FIPAs):  
In force (date of entry into force):   Poland (1990);  Russia (1991);  Czech Republic , Slovakia (1992);  Arge ntina, Hungary (1993);  
Ukraine, Latvia (1995);  Philippines, Trin idad and Tobago (1996);  Barbados, Ecuador , Egypt, Romania (1997);  Panama, Thailand,  
Venezuela (1998);  Armenia, Uruguay, Lebanon, Costa Rica (1999);  Croatia (2001);  Peru (2007);  Jordan (2009) 
 
Concluded or signed but not yet in force:  El Salvador (signed 1999);  South Africa (s igned 1995);  Madagascar (Concluded 2008);  
Czech Republic, Latvia, Romania (all amended) (signed 2009);  Slovak Republic (amended) (signed 2010);  Bahrain (concluded 2010 ) 
Hungary (amended), Kuwait (concluded 2009) 
 
Under negotiation:  China;  India;  Indonesia;  Mali;  Mongolia;  Poland (re negotiation);  Tanzania;  Tunisia;  and, Viet Nam 
 
MOUs on investment:  
Chile (2007);  China (2006);  Germany (2005);  Hong Kong (2008);  and Japan (2005) 
 
Cooperation agreements: Canada-India cooperation agreement on energy, trade and investment (2009)  
 
OECD instruments:  
OECD Code of Liberalization of Capital Move ments;  OCED National Treatment Instrument 
 
Membership of international arbitral conventions/bodies: 
Canada is a party to the Convention on the Recognition and Enfo rcement of Foreign Arbitral Awa rds (since 1986) and the World Ba nk's 
Multilateral Investment Guarantee Agency (MIGA).  Canada is maki ng efforts to join the International Centre for the Settlement of 
Investment Disputes (ICSID)  
 
Source: DFAIT, and Invest in Canada.  
(3) PARTICIPATION IN THE WTO 
28. Canada is an active participant in the WTO, bot h in the context of the regular work of the 
organization and the Doha Development Agenda ( DDA) negotiations.  It has taken on broad-ranging 
WTO commitments and is one of the more frequent  users of the WTO's dispute settlement system 
(Table II.4).  At the 2009 Ministerial Conference and in the context of this Review, the Government 
has highlighted the importance of trade to the Ca nadian economy, it has re-emphasized that it sees the 
WTO as the cornerstone of its trade policy, and e xpressed its commitment to bringing the DDA to a 
successful conclusion.26 
                                                      
25 Double taxation agreements are in force with:  Algeria;  Argentin a;  Armenia;  Australia;  Austria;  
Azerbaijan;  Bangladesh;  Barbados;  Belgium;  Brazil;  Bu lgaria;  Cameroon;  Chile;  China;  Croatia;  Cyprus;  
Czech Republic;  Denmark;  Dominican Republic;  Ecuador;  Egypt;  Estoni a;  Finland;  France;  Gabon;  
Germany;  Guyana;  Hungary;  Iceland;  India;  Indonesia;  Ireland;  Israel;  Italy;  Côte d´Ivoire;  Jamaica;  Japan;  Jordan;  Kazakhstan;  Kenya;  Korea;  Kuwa it;  Kyrgyzstan;  Latvia;  Lithuania;  Luxembourg;  
Malaysia;  Malta;  Mexico;  Moldova;  Mongolia;  Morocco;  Netherlands;  New Zealand;  Nigeria;  Norway;  
Oman;  Pakistan;  Papua New Guinea;  Peru;  Philippines;  Poland;  Portugal;  Romania;  Russia;  Senegal;  Singapore;  Slovak Republic;  Slovenia;  South Africa;  Spain;  Sri Lanka;  Sweden;  Switzerland;  Tanzania;  
Thailand;  Trinidad and Tobago;  Tunisia;  Ukraine;  United Arab Emirates;  Unite d Kingdom;  United States;  
Uzbekistan;  Venezuela;  Viet Nam;  Zambia;  and, Zimbabwe. 
26 WTO document WT/MIN(09)/ST/130, 6 January 2010. Canada WT/TPR/S/246 
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Table II.4 
Summary profile of Cana da's WTO participation  
Accession:  Original WTO Member:  Implementation of the results of the Uruguay Round through the World Trade 
Organization Implementation Act (entry into for ce:  1 January 1995) and additional regulations 
promulgated by the Governor-in-Council. 
Plurilateral agreements:  Party to Agreement on Government Procurement and Trad e in Civil Aircraft.  Pa rticipant in Information 
Technology Agreement and the Chemi cal Tariff Harmonization Agreement.  
Services protocols: Telecommunications (Fourth Protocol), Fi nancial Services (Fifth Protocol). 
Dispute settlement: Complainant in 33 cases;  Respondent in 16 cases;  Third Party in 71 cases (1995-October 2010). 
 
Source: WTO Secretariat.  
29. During the period under review, Canada has su bmitted or co-sponsored 21 communications in 
various DDA negotiating groups, mainly to the Negotiating Groups on Market Access and Trade 
Facilitation, but also in the areas of rules, trade in services, and trade and environment.27 
30. The subjects covered by the communications s ubmitted to the Negotiating Group on Market 
Access over this period are:  standards, technical  regulations and conformity assessment procedures 
for automotive products;  non-tariff barriers, ma rket access (horizontal mechanism);  sectoral 
negotiations - negotiating modalities on liberalization of trade in fish and fish products, forest 
products, chemicals, industry mach inery, and gems and jewellery.28  On trade facilitation, they relate 
to:  advance rulings;  border agency cooperation;  customs cooperation;  and separation of release 
from final determination and payment of customs du ties, taxes, and fees.  On rules, Canada has 
proposed a de minimis  exemption for disciplines on fisheries subsidies.  In the services negotiations, 
submissions relate to the scope of coverage of CPC 84 (Computer and Related Services) and services 
subsidies for a Working Party on GATS Rules inform ation exchange exercise.  In the Committee on 
Trade and Environment Special Session, Canada, toge ther with New Zealand submitted a proposal on 
procedures for information exchange between the WTO and MEA Secretariats. 
31. Since January 2007, Canada has initiated six dispute settlement cases as a complainant.  
These involve:  seal products (two cases) (EU);  meat (Korea);  labelling requirements (COOL) (United States);  financial services (China);  and agricultural subsides and domestic support 
(United States).  One new case was brought against Ca nada (by Japan), relating to measures affecting 
the energy sector.  As at October 2010, Canada wa s involved in 12 active cases, either as respondent 
or complainant (Table AII.3). 
32. Canada has maintained a solid record on notifica tions (Table AII.4).  However, notifications 
on agriculture and government procurement are lagging.
29  Canada has not notified "any new, or any 
changes to existing laws, regulations, or administra tive guidelines, which significantly affect trade in 
services" during the review period.30  In addition, Canada has not notified its preferential rules of 
                                                      
27 This figure does not include the two communications, of which Canada is a co-sponsor, submitted to 
the Special Session of the Council for Trade-Related Aspects of Intellectual Property Rights in July 2008.  
These relate to a 2005 proposal on geographical indications.  They aggregate all sponsors, rather than 
incorporating any substantial changes to the text of the proposal. 
28 For the negotiating documents see WTO online information, at:  http://www.wto.org/english/ 
thewto_e/ countries_e/canada_e.htm. 
29 Latest notifications:  (i) agriculture:  (a) impo rts under tariff quotas (marketing year 2008-2009 and 
calendar year 2009);  (b) special safeguard (marketing year 2007-08 and the calendar years 2007 and 2008);  (c) domestic support (DS:2 table:  fiscal year 2005/06 and a programme running from May 2004 to March 2008.  
DS:1 table:  2005);  (d) Possible negative effects of the reform programme on least-developed and net 
food-importing developing countries (2006-07);  (ii) Government Procurement:  statistics (2007). 
30 Article III:3 of the GATS. WT/TPR/S/246 Trade Policy Review 
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origin for the FTAs reached with Peru and EFTA , nor the preferential access agreements with 
Australia and New Zealand.31 
(4) PREFERENTIAL TRADE RELATIONS  
(a) Free trade agreements 
33. Canada has free trade agreements (FTA) w ith the United States and Mexico (through 
NAFTA), Chile, Costa Rica, and Israel.  Agreements  entered into force with Peru (2009) and the 
EFTA (2009) during the review period.  All of these  agreements have been formally considered by 
WTO Members.  FTAs have been signed with Colombia  in 2008;  Jordan (2009) and Panama (2010), 
but these have not yet entered into force.32 
34. The FTA between Canada and Peru  covers goods and services, and inter alia  has provisions 
on investment;  competition policy, monopolies, and st ate enterprises;  government procurement;  and 
electronic commerce.  Separate agreements on la bour cooperation and the e nvironment were signed 
and entered into force in parallel with the FTA. 
35. Canada's FTA with EFTA covers trade in industri al products (including fish and other marine 
products), processed agricultural products and basic agricultural products through bilateral 
agreements.  The agreement contains disciplines on competition, and the parties committed to review 
issues related to services, government procurement, a nd investment within three years of its entry into 
force. 
36. Canada is continuing to pursue  an ambitious agenda of free- trade negotiations, both within 
the hemisphere and outside.  Negotiations are ac tive with the Caribbean Community (CARICOM);  
the Dominican Republic;  the Central America 4 (El Salvador, Guatemala, Honduras, and Nicaragua);  
India;  South Korea;  the Europ ean Union;  Morocco, and Ukraine. 
37. Other initiatives under way are FTA exploratory discussions with Turkey, discussions on how 
to modernize the Canada-Costa Ri ca FTA and negotiations to enha nce the FTA between Canada and 
Chile.33  Negotiations to establish a Free Trade Area of the Americas have been dormant since 2004. 
(b) Unilateral tariff preferences 
38. Canada grants unilateral preferential tariff treatment under the Commonwealth Caribbean 
Country Tariff (CARIBCAN);  the General Pref erential Tariff (GPT) and the Least-Developed 
Country Tariff (LDCT) (Chapter III(2)(iv)). 
(5) AID FOR TRADE  
39. According to the authorities, Canada's aid fo r trade (AFT) programming efforts are guided by 
an overall approach that views trade and the multilateral trading system as a key tool for developing 
countries' efforts to enhance economic growth and de velopment.  It was noted that Canada's AFT is 
also guided by international undertakings, particul arly those flowing from WTO Ministerial meetings 
                                                      
31 Trade Agreement Between the Government of Canada and the Government of the Commonwealth of 
Australia (CANATA, 1960), and the Trade and Economic  Cooperation Agreement w ith New Zealand (1982). 
32 The Colombian FTA has been approved in Canada and will be implemented once it is approved in 
Colombia.  The Jordan and Panama FTAs are in the Canadian Parliament for approval. 
33 For DFAIT online information on completed and ongoing negotiations, see:  
http://www.international.gc.ca/trad e-agreements-accords-commerciaux/ agr-acc/index.aspx?lang=en#free. Canada WT/TPR/S/246 
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and G-8 and G-20 commitments.  Canada remains an  active participant in th e WTO's work on aid for 
trade and is an alternate member of the Bo ard of the Enhanced Integrated Framework. 
40. Almost all of Canada's aid for trade funding  is managed by the Canadian International 
Development Agency (CIDA), which is the key go vernment agency responsible for administering 
Canada's official development assistance (ODA).  Two key strategies guide the CIDA's approach to 
AFT:  its Sustainable Economic Growth Strategy, and its Aid Effectiveness Agenda.  Under the latter 
80% of Canada's bilateral aid budget is focused on 20 countries/areas as well as thematic objectives 
(Box II.2).34  Canada channels its AFT through multila teral institutions, bilateral assistance, and 
partnerships with civil society.  Canada is also a proponent of mainstreami ng gender equality into aid 
for trade. 
Box II.2:  CIDA Aid Effectiveness Agenda 
ODA thematic objectives 
Three pillars:  increasing food s ecurity;  securing the future of  children and youth;  stimulating sustainable economic growth 
Horizontal themes, cross-cutting each of th e pillars:  increasing environmental sustai nability;  promoting equality between men  and 
women;  and helping to strengthen governance institutions and practices 
CIDA countries of focus 
Americas:  Bolivia;  Member countries  of the Caribbean Regional Program;  Colombia;  Haiti;  Honduras;  Peru 
Asia:  Afghanistan;  Bangladesh;  Indonesia;  Pakistan;  Viet Nam. 
Eastern Europe:  Ukraine 
North Africa and Middle East:  West Bank and Gaza 
Sub-Saharan Africa:  Ethiopia;  Ghana;  Mali;  Mozambique;  Senegal;  Sudan;  Tanzania 
Source: CIDA online information.  Viewed at:  http://w ww.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/ 
 FRA-825105226-KFT.  
41. Canada's aid-for-trade funding through the CI DA for FY2008/09 (the most recent date for 
which statistics were available) was Can$513 m illion (up from Can$465 million in FY2006/07).  In 
FY2008/09, 75% of disbursements went towards building productive capacity (particularly in 
agriculture);  19% to economic infrastructure;  and 6% to trade policy and regulations.  Over half of 
bilateral AFT funding was allocated to CIDA's 20 count ries/areas of focus, with  the African continent 
being the largest recipient.  Projects and programmes include:  the Program for Building African Capacity to Trade, the Canada-Americas Trade Related Technical Assistance Program;  State 
Customs Capacity Building in Ukraine;  Enhancin g Trade Capacity Building in the Middle East and 
North Africa;  and support to the African Trad e Policy Centre and the East African Community. 
42. At the multilateral level, in support of its St rategy for Sustainable Economic Growth, CIDA 
allocated Can$40 million over five years (2009/10-20 13/14) to enhance countries' participation in the 
global economy.  The support is to be focused on tr ade facilitation and agricultural standards, to be 
delivered through a variety of institutions.  The authorities note that around one-quarter of this 
investment will be devoted to making substantive improvements to the lives of women traders, 
entrepreneurs, and small-scale farmers.  The CI DA has also contributed Can$19.2 million over five 
years (2009-14) to the Enhanced Integrated Framew ork for Trade Related Tec hnical Assistance.  It 
provides an annual contribution of Can$950, 000 to the International Trade Centre. 
                                                     
 
34 CIDA online information.  Viewed at:  http ://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/ 
eng/NAD-9241625-RHC;  and http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/FRA-825105226- KFT. WT/TPR/S/246 Trade Policy Review 
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43. According to the authorities, CIDA's Partners hips with Canadians Branch (PWCB) works 
through the Global Citizens Program to involve Cana dians in international development.  It works 
through the Partners for Development Program to  leverage Canadian de velopment expertise by 
funding the proposals put forward by Canadian orga nizations to deliver development results on the 
ground and contribute to poverty reduction.  PWCB also funds the International Lawyers Against 
Poverty. 
44. Canada has recently made an additional c ontribution of US$200 million to support the 
International Finance Corporation's Global Trade Liquidity Program.