Tag archives: Investment Canada

Foreign investment rule changes: narrowed scope but deeper reach

On March 25, 2015 the Canadian government published two long-awaited regulations amending the Investment Canada Act. One is intended to reduce the number of transactions that are subject to pre-closing review and approval, but will increase the amount of detailed information required in routine filings for transactions that are not reviewable. The second will lengthen the period for transactions undergoing a national security review by providing the government additional time to complete such reviews.

Thresholds for Review

Under the Investment Canada Act, the acquisition of control of a Canadian business by a non-Canadian is generally subject to pre-closing review … Continue Reading

New merger review thresholds for Competition Act and Investment Canada Act

The threshold for a pre-closing net benefit review under the Investment Canada Act and the threshold for a pre-closing merger notification under the Competition Act have been increased for 2014.

Investment Canada Act

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 had a net book value of more than $354 million as at the end of the target’s last completed fiscal year prior to the acquisition. The 2013 threshold was $344 million. Amendments to the ICA to change … Continue Reading

Investment Canada Act amendments raise questions for state-owned enterprises

Following its approval in December 2012 of two high-profile transactions involving foreign state-owned enterprises acquiring Canadian businesses, the Canadian government announced new policies that would guide the minister of industry in applying the Investment Canada Act (ICA) to subsequent similar transactions.  On April 29, 2013, the government introduced its budget implementation bill, Bill C-60, which contains amendments to the ICA to implement the December 2012 policies. If enacted in their current form, these amendments will provide the minister greater authority to require net benefit reviews as well as the ability to prolong reviews of transactions that may raise national … Continue Reading

New Merger Review Thresholds for Competition Act and Investment Canada Act

The threshold for a pre-closing net benefit review under the Investment Canada Act and the threshold for a pre-closing merger notification under the Competition Act have been increased for 2013.

Investment Canada Act:  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 had a net book value of more than $344 million as at the end of the target’s last completed fiscal year prior to the acquisition. [The 2012 threshold was $330 million.]

Competition Act:  Canada uses … Continue Reading

Navigating the new Investment Canada rules for state-owned enterprises

On December 7, 2012, the Canadian government approved two proposed investments in Canadian energy companies by state-owned enterprises (SOEs) under the Investment Canada Act (ICA): the proposed acquisition by PETRONAS of Progress Energy Resources Corp. (Progress) and the proposed acquisition of Nexen Inc. (Nexen) by China National Offshore Oil Company (CNOOC). Norton Rose Canada represented PETRONAS before the Investment Review Division of Industry Canada.

Concurrent with these announcements by the Minister of Industry, the government unveiled new guidelines applicable to future acquisitions of control of Canadian businesses by SOEs. However, the general test under the ICA remains –such acquisitions must … Continue Reading

Higher Investment Canada Act & Competition Act Thresholds for 2012

 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 … Continue Reading

PM’s Words Add Confusion to Investment Canada Act Debate

Apparently drawing inspiration from the opening lines of British stand-up comedian Alexie Sayle’s 1985 hit, Canadian Prime Minister Stephen Harper has again waded into the issue of foreign investment in Canada.  Harper’s is the only government to have used the Investment Canada Act to reject an announced acquisition of a Canadian business, first in 2008 and then again in 2010. Following the latter, BHP Billiton’s proposed hostile take-over of Potash Corporation, the government announced its intention to “clarify” the criteria used to evaluate transactions.  More than a year later, no clarification has been provided.

Government officials, including the … Continue Reading

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