Written by Adam Kalbfleisch and Kyle Donnelly
The Competition Bureau has announced that the 2020 size of transaction pre-merger notification threshold under the Competition Act will remain unchanged from the current threshold of $96 million set in 2019. Acquisitions may be subject to mandatory pre-notification where the aggregate value of the target firm's assets in Canada, or the gross revenues from sales in or from Canada generated from those assets, exceeds the size of transaction threshold. The size of parties threshold ($400 million), and shareholdings threshold in the case of share deals, must also be met for a mandatory notification to be required.
Similarly, Innovation, Science and Industry Canada (ISI) also recently increased various review thresholds for investments under the Investment Canada Act, effective February 15, 2020. The 2020 threshold for World Trade Organization (WTO) investors that are not state-owned enterprises (SOEs) increased to $1.075 billion for direct investments involving Canadian non-cultural businesses, based on the enterprise value of the Canadian business’ assets (up from $1.045 billion in 2019). Private sector investors from the United States, Australia, Chile, Colombia, the European Union, Honduras, Japan, Mexico, New Zealand, Panama, Peru, Singapore, South Korea and Vietnam benefit from a higher "trade-agreement" investor threshold, which increased to $1.613 billion, based on the enterprise value of the Canadian business’ assets, up from $1.568 billion in 2019. The 2020 threshold for WTO investors that are SOEs increased to $428 million based on the book value of the Canadian business' assets, up from $416 million in 2019.
The thresholds for review for direct and indirect investments by non-WTO investors ($5 million and $50 million, respectively) and for direct and indirect investments in Canadian cultural businesses ($5 million and $50 million, respectively) remain the same.