The review threshold will be raised from the current C$330 million ($320 million) in asset value to C$1 billion in enterprise value over a four-year period, he said in a statement.
Paradis said the Conservative government was following the core recommendations of a policy review panel that concluded in 2008 that the current way of reviewing proposed foreign investments needed to be changed.
The government has been under pressure to explain the way it handles foreign takeover bids since it surprised markets in late 2010 by rejecting Australian miner BHP Billiton Ltd's attempt to buy fertilizer maker Potash Corp of Saskatchewan Inc .
Enterprise value is equal to the sum of the price to be paid for the equity of a business and the assumption of liabilities on the balance sheet minus current cash assets.
Enterprise value better reflects the value of a business as a going concern and the increasing importance of service and knowledge-based industries, the statement said.
Once the regulations are in force, the investment review threshold will rise from C$330 million in asset value to C$600 million in enterprise value for two years, then to C$800 million for two years, then to C$1 billion.