Ottawa has announced a crackdown on foreign investment into the construction industry, after it came under fire last week for its reluctance to sanction a Saudi developer who has plans to build an entire $1 billion mixed-use development on land near Parliament Hill.
The move comes as the Canadian government prepares to open the doors to foreign nationals who want to work in the country.
The new rules are the latest in a series of steps Ottawa has taken in recent months to curb foreign investment, following complaints about the country’s high cost of living.
Foreign investors have been targeted for years for violating laws such as “anti-dumping” rules or the Foreign Investment Review Board, which require the companies they invest in to give an annual report to the federal government about their operations.
Ottawa says it is not required to disclose the identities of foreign investors involved in the construction sector.
But the rules say the CRA should investigate complaints “in a timely manner” and should “provide a basis for determining that a foreign company or foreign person is engaged in unfair competition, and for taking measures to protect the interests of Canadian investors and Canadian taxpayers.”
“The CRA has the authority to issue enforcement action, including monetary sanctions, against foreign companies that engage in anti-damping activities and those that attempt to undermine the Canadian construction industry,” the government said in a statement.
“In a timely fashion, the Canada Revenue Agency should provide a basis on which to take enforcement action against foreign investors that have engaged in anti–competitive behaviour.””
The Government of Canada has made clear that foreign investment must be regulated with the same stringent scrutiny and enforcement standards as other businesses, including the federal securities market.””
In a timely fashion, the Canada Revenue Agency should provide a basis on which to take enforcement action against foreign investors that have engaged in anti–competitive behaviour.”
The Government of Canada has made clear that foreign investment must be regulated with the same stringent scrutiny and enforcement standards as other businesses, including the federal securities market.
“Foreigners working in construction should be licensed by the CRA to do so, the statement said.
It is not clear whether that will be the same for foreign investors who have contracts to build in Canada.
In the statement, Ottawa says the government is “committed to ensuring that foreign investors, including foreign nationals, are treated fairly under Canadian law, including through the application of sanctions.”
It is also taking steps to improve the country “with respect to foreign ownership, ownership, and control,” including a review of the Foreign Investor Protection and Investment Act, a federal law designed to protect foreign investors from the risks of investing in Canada, and creating a special team to review foreign investments.
Foreigners who have purchased Canadian property through a foreign owner must complete a form that provides a description of the ownership, including ownership of the building, its location and the purpose of the purchase.
It also requires foreign investors to sign a release that states the ownership of property and its purpose.
Foreign nationals who buy properties in Canada through a local company, a real estate agent or a foreign investor who has received a tax deduction can file a complaint with the CRA.
The complaint is then reviewed by a team of government lawyers.
The CRA will also review the complaint if it finds that the complaint is frivolous.