The Government of Canada announced that new (higher) monetary
thresholds for Investment Canada review of investments from WTO
countries will become effective April 24, 2015. It also introduced
amendments to the national security review process, effective
immediately, potentially lengthening the time periods for such
reviews and requiring the filing of additional information.
Increased Threshold for Review
New regulations (first announced in 2009) will come into force
on April 24, 2015, changing the monetary threshold for "net
benefit" reviews of acquisitions of control by non-Canadians
from WTO countries. Currently, the threshold is $369 million, based
on the book value of the assets of the Canadian business being
acquired, adjusted annually to reflect changes to GDP.
The new threshold for investors from WTO countries will be $600
million (to be increased to $800 million in two years' time and
to $1 billion two years later), based on the enterprise value of
the Canadian business being acquired. The new regulations set out
the details for how enterprise value is to be calculated for this
This new threshold is subject to specific exceptions in the case
of acquisitions by state-owned enterprises (SOEs) and acquisitions
of cultural businesses. Reflecting the greater scrutiny accorded
investments from SOEs (announced by the Prime Minister himself in
2012), those investors from WTO countries will continue to be
subject to the current lower threshold, based on book value and
adjusted annually. Cultural businesses will continue to be subject
to the much lower, and fixed, $5 million book value threshold. All
acquisitions of control by non-WTO investors remain subject to this
same $5 million threshold.
Increased Timeline for National Security Reviews
Effective immediately, there will be increases to the timelines
applicable to the separate national security reviews under the
Investment Canada Act. These include, among other amendments, an
increase to 45 days (from 25 days) for the time period for the
Minister of Industry to determine whether to commence a review (on
"reasonable grounds to believe that an investment by a
non-Canadian could be injurious to national security"), as
well as the potential for the Minister to unilaterally extend the
review period up to an additional 45 days. The result of these
amendments is that a national security review, which under the
existing rules occupied 130 days, could now extend up to 200 days
The increased monetary thresholds for net benefit reviews under
the ICA are welcome, and put an end to the uncertainty that has
existed since these measures were first announced in 2009.
Maintenance of the existing threshold for SOEs, even those from
WTO countries, and the increased timelines for national security
reviews, reflect the increasing importance of national interest and
security considerations in foreign investment reviews in Canada and
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