Competition Act And Investment Canada Act Thresholds For 2017

Certain merger notification thresholds under Canada's Competition Act and the foreign investment review thresholds under the Investment Canada Act are updated on a yearly basis. On March 3, 2017, the Competition Bureau announced that the pre-merger notification "transaction-size" threshold under the Competition Act had increased. The Federal Government has also announced that the pre-merger review threshold under the Investment Canada Act for acquisitions involving Canadian businesses by WTO ("World Trade Organization") members will also increase.

New Pre-Merger Notification "Transaction-size" Threshold under the Competition Act

The Competition Bureau announced that the pre-merger notification "transaction-size" threshold for 2017 has increased to CAD $88 million, from the 2016 threshold of CAD $87 million. This increase took effect on March 4, 2017. A proposed transaction generally requires notification to the Competition Bureau under the Competition Act where both of the following thresholds are exceeded:

Size-of-the-parties threshold: The parties to the transaction, together with their affiliates, collectively have assets in Canada, or gross annual revenues from sales in, from or into Canada, that exceed CAD $400 million; and, Transaction-size threshold: The size of the specific transaction will exceed CAD $88 million. In the case of asset transactions, this would mean that either the value of the assets in Canada, or the annual gross revenues from sales in or from Canada generated from those assets, exceed CAD $88 million. In the case of an acquisition of voting shares, this would mean that either the value of the assets of the corporation in Canada (and its affiliates), or the annual gross revenues from its sales in or from Canada generated from those assets, exceed CAD $88 million. Additionally, in order for pre-merger notification to be triggered with respect to voting share transactions, the percentage of voting shares held by the entity acquiring the shares would have to rise as a result of the transaction above 20 percent of the total outstanding voting shares of a public corporation, or above 35 percent in the case of a private corporation. If the entity acquiring the shares already owned shares in excess of 20 or 35 percent (depending on the type of transaction, the transaction would have to result in the entity owning more than 50 percent of the total outstanding voting shares of the corporation acquired. Pre-Merger Review...