On February 2, 2015, the Competition Bureau announced an
increase in the notifiable transaction-size threshold to
C$86-million, a modest increase from the 2014 C$82-million
threshold. The pre-merger notification transaction-size threshold
is reviewed annually in accordance with the indexing mechanism set
out in the Canadian Competition Act to reflect changes in
Canada's gross domestic product. This new threshold for 2015
will come into effect immediately following publication in the
Canada Gazette, which is expected to occur on February 7,
Upon the new threshold taking effect, the Competition Bureau
must generally be given advance notice of proposed transactions
the book value of the target's assets in Canada or revenues
from sales in or from Canada generated from those assets (as
reflected in the most recent audited financial statements) exceed
the C$400-million "size of parties" test is met,
i.e., where the combined Canadian assets or revenues of the parties
and their respective affiliates in, from or into Canada exceed
Where a transaction is notifiable, parties must submit to the
Bureau a pre-merger notification filing containing certain
proscribed information (as well as substantial additional
information if the Bureau issues a supplementary information
request (SIR)) and are prohibited from closing until expiration,
termination or waiver of the statutory waiting period set out in
the Act (which is 30 days from filing complete pre-merger
notification filings or, if the Bureau issues a SIR, 30 days from
compliance with the SIR).
In spite of the increased notification threshold, merging
parties should bear in mind that the Commissioner of Competition
retains the jurisdiction to investigate and challenge a transaction
within one year of closing even if it does not meet the pre-merger
The threshold for transactions requiring foreign investment
review under the Investment Canada Act (ICA) has likewise
been increased for 2015. Direct acquisitions of control of Canadian
businesses by non-Canadians are reviewable under the ICA where
certain financial thresholds are met. With respect to a direct
acquisition by a "WTO investor" (that is, an investor
controlled by persons who are citizens of World Trade Organization
member countries), Industry Canada has announced an increase in the
book value of assets threshold which triggers a review requirement.
The new threshold, which is effective for 2015, is C$369-million.
The previous threshold was C$354-million.
The threshold for direct acquisitions by non-WTO investors and
for acquisitions by non-Canadians of Canadian cultural businesses
remains unchanged at C$5-million.
Investments by non-Canadians that do not exceed the review
thresholds must nevertheless be notified to Industry Canada within
30 calendar days of closing.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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