There have been a number of important developments in
competition and foreign investment law since March 2009. The most
noteworthy of these developments include:
The most significant amendments to the Competition Act
in its history, including the introduction of a per se
conspiracy offense and dual-track criminal/civil regime in the area
of competitor agreements; the decriminalization of predatory
pricing, price maintenance and price discrimination; and the
creation of a reviewable price maintenance provision. Bill C-10
brought Canada's merger review process more in line with that
of the US, and introduced substantial changes to the Investment
Canada Act such as a new national security review mechanism
and revised thresholds for review.
Issuance of a number of significant policies by the Competition
Bureau including the Competitor Collaboration Guidelines,
the Merger Review Process Guidelines and the Leniency
Program Bulletin (see our
related article discussing this last Bulletin).
The first-ever legal action against a foreign investor for
failing to comply with undertakings given as a condition of
Significant criminal and civil enforcement activity in the area
of false and misleading advertising.
These and other significant developments are more fully
described in the recent paper prepared by the Competition Law
Group. Readers should be mindful that since that article was
published, certain thresholds referred to in the paper have changed
for 2011, as noted below.
Competition Act "size of transaction
threshold" Increases for 2011
The Competition Act requires that notification of
substantial mergers must be made to the Commissioner of
Competition. For a merger to be notifiable, there are two
thresholds that must be met, namely, the "size of transaction
threshold" and the "size of parties threshold."
The Competition Act provides that for certain share
acquisitions, asset acquisitions, amalgamations and combinations,
or acquisitions of an interest in a combination, the "size of
transaction threshold" is met where the assets in Canada or
gross revenues from sales in and from Canada generated by such
assets exceeds a stipulated amount. The 2011 Competition
Act "size of transaction threshold" was increased to
$73 million (Canadian dollars) from the 2010 threshold of $70
million. Previously, this threshold was fixed, but it will now be
revised annually in accordance with an inflation index.
The "size of parties threshold" essentially requires
that for a merger to be notifiable, the parties to the transaction
together with their affiliates (for this purpose,
"affiliate" is defined to include all corporations joined
by a 50 per cent plus voting link) must have either assets in
Canada or gross revenues from sales in, from and into Canada that
exceed $400 million.
Where the acquisition is for shares in a corporation, the notice
must be given prior to the acquisition of the shares which result
in more than 20 per cent of the voting shares in the case of
public corporations (35 per cent in the case of private
corporations) being held by the acquiree and its affiliates and
then again when the 50 per cent threshold is passed.
Investment Canada Act WTO Review Threshold Increases
Industry Canada recently announced that the 2011 Investment
Canada Act threshold (applicable to most direct acquisitions
of Canadian businesses by non-Canadians) will be $312 million
(Canadian dollars). This threshold applies to the book value of the
target's assets. The lower threshold of $5 million will
continue to apply to transactions that relate to cultural
businesses or where none of the foreign parties are from a country
that is a WTO member.
To read the paper, "Significant Developments in
Canadian Competition Law and Policy since March 2009",
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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