The threshold for certain pre-closing net benefit reviews under the Investment Canada Act (ICA) and the threshold for a pre-closing merger notification under the Competition Act have been updated for 2023.
For the second year in a row, the Minister of Innovation, Science and Economic Development has announced that the threshold for pre-closing merger notifications under the Competition Act will not change this year; the transaction-size threshold will remain C$93 million.
Meanwhile, the thresholds for certain pre-closing net benefit reviews under the ICA were increased:
- Direct acquisitions of control of a Canadian business by investors controlled from countries with which Canada has a free trade agreement (trade agreement investors) that are not state-owned enterprises (SOEs) will generally be subject to pre-closing review where the enterprise value of the Canadian business exceeds C$1.931 billion (up from C$1.711 billion in 2022).
- Direct acquisitions of control of a Canadian business by investors controlled from WTO member countries (WTO investors) that are not SOEs and not trade agreement investors will generally be subject to pre-closing review where the enterprise value of the Canadian business exceeds C$1.287 billion (up from C$1.141 billion in 2022).
- Direct acquisitions of control of a Canadian business by an SOE controlled from a WTO member country will generally be subject to pre-closing review where the Canadian business has assets with a book value of C$512 million (up from C$454 million in 2022).
- The net benefit review threshold for investments by non-WTO investors, or for the direct acquisition of control of a cultural business (regardless of the buyer’s nationality) is C$5 million in book value. The threshold for an indirect acquisition of control is C$50 million in asset value ($5 million in certain instances). These thresholds have not changed.
For more information, our recent publication on this subject is available here.
