The Government of Canada has announced the annual adjusted
monetary thresholds for review of acquisitions involving Canadian
businesses under the Competition Act and the
Investment Canada Act for 2016.
Subject to limited exemptions, under the Competition
Act, parties to a share, asset, amalgamation or combination
transaction may be required to file pre-merger notification filings
if certain financial thresholds are met.
With respect to an asset transaction, parties must provide the
Competition Bureau with pre-merger notification filings if a
proposed transaction exceeds two thresholds: (a) the size of the
transaction; and (b) the size of the parties.
"Size-of-Transaction" Threshold- The pre-merger notification threshold relating
to transaction size for 2016 has been increased to $87 million from
the 2015 threshold of $86 million. Therefore, this threshold will
be met where the aggregate value of the target's assets in
Canada, or the annual gross revenue from sales in or from Canada
generated by the target's Canadian assets, exceed $87
"Size-of-Parties" Threshold- This threshold is not adjusted annually. It is
met where the parties to a transaction (together with their
affiliates) have combined assets in Canada, or annual gross
revenues from sales in, from or into Canada, exceeding $400 million
in aggregate value.
For share transactions, in addition to exceeding the financial
thresholds noted above, pre-merger notification will normally be
the purchaser, as a result of the
transaction, holds more than 20% of the voting shares of the target
public company (more than 35% of the voting shares if the voting
shares of the target company are not publicly traded), or
if the purchaser before the
transaction holds voting shares of the target company that exceed
20% or 35%, as applicable, the purchaser will as a result of the
transaction, hold more than 50% of the voting shares of the target
The "Size-of-Parties" and
"Size-of-Transaction" thresholds are also relevant in
determining if pre-merger notification is required for amalgamation
and combination transactions, although the tests used to determine
if merger notification is required for amalgamations and
combinations are somewhat different than described above for asset
and share transactions.
Investment Canada Act
Investments in Canada by foreign investors (i.e. entities
controlled directly or indirectly by non-Canadians) are reviewable
under the "net benefit" provisions of the Investment
Canada Act if the foreign investor (a) acquires control of a
Canadian business and (b) meets certain financial thresholds. These
financial thresholds vary greatly depending on whether the target
Canadian business is a cultural business, the transaction is a
direct or indirect acquisition, the investor is a state-owned
enterprise (SOE), or the investor is from a WTO country (a
For 2016, only the review threshold applicable to investments by
WTO Investors that are also SOEs has been adjusted, from the 2015
threshold of $369 million to $375 million, based on the book value
of the Canadian business's assets.
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).