Written by Adam Kalbfleisch, Kyle Donnelly and Alysha Pannu
On January 31, 2019, the Competition Bureau announced the 2019 size of transaction pre-merger notification threshold under the Competition Act would increase to $96 million (the 2018 threshold was $92 million). 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. The 2019 threshold came into effect February 2, 2019, following publication in the Canada Gazette Part 1.
Similarly, Innovation, Science and Economic Development Canada (ISED) also recently increased various review thresholds for investments under the Investment Canada Act, effective January 1, 2019. The 2019 threshold for World Trade Organization (WTO) investors that are not state-owned enterprises increased to $1.045 billion for direct investments involving Canadian non-cultural businesses, based on the enterprise value of the Canadian business’ assets (up from $1 billion in 2018). Private sector investors from the United States, Australia, Japan, Mexico, New Zealand, Singapore, Vietnam, the European Union, Chile, Peru, Colombia, Panama, Honduras and Korea benefit from a higher "trade-agreement" investor threshold, which increased to $1.568 billion, based on the enterprise value of the Canadian business’ assets, up from $1.5 billion in 2018. The 2019 threshold for WTO investors that are state-owned enterprises increased to $416 million based on the book value of the Canadian business' assets, up from $398 million in 2018.
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.