On April 1, 2021, the Government of Canada announced two important updates relating to merger filing fees: (i) a decreased merger filing fee ($74,905.57), and (ii) a new Service Fees Remission Policy.
Decreased Merger Filing Fee for 2021
Effective immediately, the Competition Bureau's (the "Bureau") filing fee for merger reviews has decreased from $75,055.68 to $74,905.57.
The Competition Act requires parties to certain types of transactions that exceed applicable thresholds notify the Bureau. (See our prior blog post - 2021 Merger Review Thresholds.) The notifying parties are required to pay a filing fee in respect of such pre-merger notification and/or request for an advance ruling certificate ("ARC").
Pursuant to the Service Fees Act, the Bureau's merger review filing fee is adjusted annually based on the Consumer Price Index for Canada. Accordingly, the Bureau's merger filing fee generally increases each year. Due to Canada's economic contraction following from extensive restrictions on economic activity imposed by governments which were intended to slow the spread of COVID-19, the adjusted fee is slightly lower this year than it was last year, which is exceptional. If the Canadian economy improves, we can expect the merger filing fee to increase in 2022.
New Service Fees Remission Policy
Effective immediately, Innovation, Science and Economic Development Canada ("ISED")1 has issued a Service Fees Remission Policy which applies to filing fees for pre-merger notifications and/or ARC requests. Under this new policy, in certain circumstances, the Bureau will remit (i.e. refund/return) a portion of the filing fee paid when a service standard is not met.
The Bureau's service standards for pre-merger notifications and ARC requests are set out in the table below.
|Service or Regulatory Process||Service Standard (calendar days)||Commencement of Service Standard2|
The day on which sufficient information has been received by the Commissioner of Competition (the "Commissioner") to assign complexity.
Generally, complexity is assigned within a few days of submitting the pre-merger notification and/or ARC request.
(except where a SIR is issued, in which case it shall be 30 days)
|The day on which sufficient information has been received by the Commissioner to assign complexity; or, where a supplemental information request ("SIR") has been issued, the day on which the information requested in the SIR has been received by the Commissioner from all SIR recipients.|
The amount of the remissions for pre-merger notifications and ARC requests are contained in the Program Annex, and set out below.
- Non-Complex Transactions:
- 25% of the filing fee will be remitted if the service standard was missed by 1 - 7 days.
- 50% of the filing fee will be remitted if the service standard was missed by 8 days or more.
- Complex Transactions where no SIR is issued:
- 10% of the filing fee will be remitted if the service standard was missed by 1 - 23 days.
- 25% of the filing fee will be remitted if the service standard was missed by 24 days or more.
- Complex Transactions where a SIR is issued:
- 1% of the filing fee will be remitted if the service standard was missed by 1 - 15 days.
- 5% of the filing fee will be remitted if the service standard was missed by 16 days or more.
A party will not be eligible for a filing fee remission if the service standard was missed due to any of the following occurring before the expiration of a service standard:
- an unforeseeable event;
- a planned or unplanned power outage;
- the merger transaction is under investigation pursuant to another provision of the Competition Act
- the merger transaction is under investigation by another Canadian or foreign authority and the Bureau is cooperating with said authority with respect to the transaction;
- the Commission and the parties entered into an agreement with respect to the timing of the service standard; or
- the Bureau is reviewing multiple merger transactions involving one or more of the same parties.
Although the Bureau has a good record for meeting its service standards, the Service Fees Remission Policy is a welcome development because it further incentivizes the Bureau to improve its record in this regard.
1. The Competition Bureau is a federal institution that is part of the Innovation, Science and Economic Development Canada portfolio.
2. In the case of an unsolicited bid under subsection 114(3) of the Competition Act, the service standard will commence when all parties other than the target corporation have complied with the applicable requirements.
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.