Under the Investment Canada Act, Canada’s foreign investment review law, the direct acquisition of control of a Canadian business by a non-Canadian from a WTO-member country is subject to pre-closing review and approval where the assets of the acquired business exceed a prescribed threshold. Effective February 25, 2012, that threshold is $330 million, up from the 2011 threshold of $312 million.
Under the Competition Act, Canada’s antitrust law, there is a two-part test for determining whether a pre-merger notification is necessary. The test is based on the size of the parties and the size of the transaction. 
Under the size of the parties test, the parties, together with their affiliates, must have aggregate assets in Canada or annual gross revenues from sales in, from or into Canada, in excess of C$400 million. Under the size of transaction test, the value of the assets in Canada or the annual gross revenue from sales (generated from those assets) in or from Canada of the target operating business and, if applicable, its subsidiaries, will need to be greater than $77 million (or in the case of an amalgamation, each party will need to have revenues or assets as above of at least $77 million) in order to trigger the notification obligation. The size of transaction threshold can be adjusted annually for inflation, and the new threshold was announced on February 7, 2012 and took effect on February 11, 2012. The 2011 threshold was $73 million. Both the party size and transaction size thresholds must be exceeded to trigger a pre-merger notification obligation.
For more information about the operation of the Investment Canada Act and the Competition Act, please see Norton Rose Canada’s guide to Doing Business in Canada.
