Industry Canada has announced that the 2015 Investment Canada
Act ("Act") threshold that applies to most direct
acquisitions of Canadian businesses by non-Canadians will be C$369
million. This is an increase from last year's $354 million
threshold. The threshold applies to the gross book value of the
target's assets. Note that under the Act, a non-Canadian
includes a Canadian-incorporated entity that is ultimately
controlled outside of Canada.
The existing lower threshold of C$5 million will continue to
apply to transactions that relate to cultural businesses or where
none of the parties are from a country that is a WTO member.
It is worthwhile to remember that the Canadian government is
also permitted to review any investment by non-Canadians on the
basis of "national security" concerns. No financial
threshold applies and the Canadian government has up to 50 days,
following either notification or the filing of an application for
review/approval, to issue notice of a potential national security
review. Therefore, if a proposed transaction that is not otherwise
subject to approval raises national security concerns, parties
should consider filing a notification as early as possible in order
to obtain pre-merger clearance (or at least trigger the review
period prior to closing) in respect of any acquisition of control
of a Canadian business by a non-Canadian (that is not otherwise
subject to review and approval).
We also note that draft regulations may bring in new and higher
thresholds later this year that apply to investors (other than
state owned enterprises). As well, a higher Competition Act
(Canada) transaction threshold will also be announced shortly
(which we expect will rise from the current $82 million level by
approximately $3 to $5 million). Please keep reading Canadian
M&A Perspectives to learn more about these changes as they
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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