Thresholds

Thresholds for Review

Private sector WTO investments

Pursuant to subsections 14.1(1) and (2) of the Investment Canada Act ("the Act"), starting April 24, 2015, the review threshold is $600 million in enterprise value for investments to directlyFootnote * acquire control of a Canadian business by:

  1. WTO investors that are not state-owned enterprises; and
  2. by non-WTO investors that are not state-owned enterprises where the Canadian business that is the subject of the investment is, immediately prior to the implementation of the investment, "controlled by a WTO investor".

Starting April 24, 2017, the review threshold will be $800 million in enterprise value.

Starting April 24, 2019, the review threshold will be $1 billion in enterprise value.

Starting January 1, 2021, and for subsequent years, the threshold level will be adjusted annually based on growth in nominal GDP in accordance with the formula set out in subsection 14.1(2) (i.e., the growth in Nominal GDP at market prices multiplied by the threshold amount determined for the previous year.)

The manner of calculating the enterprise value of the Canadian business that is the subject of the investment is prescribed in sections 3.4, 3.5 and 3.6 of the Investment Canada Regulations depending on whether the Canadian business is a publicly traded entity, non-publicly traded entity or acquired by the acquisition of assets, respectively.

State-owned enterprise WTO investments

Pursuant to the subsections 14.1(1.1) and (2) of the Act, the review threshold for 2015 is $369 million in asset value for investments to directlyFootnote * acquire control of a Canadian business by:

  1. WTO investors that are state-owned enterprises; and
  2. non-WTO investors that are state-owned enterprises where the Canadian business that is the subject of the investment is, immediately prior to the implementation of the investment, "controlled by a WTO investor".

This threshold will be annually revised to reflect the change in Canada's nominal gross domestic product (GDP) in accordance with the formula set out in subsection 14.1(2) (i.e., the annual change in Nominal GDP at market prices multiplied by the threshold amount determined for the previous year).

The manner of calculating the value of the Canadian business that is the subject of the investment is prescribed in section 3.1 of the Investment Canada Regulations and is based on the Canadian business' asset value as shown on the balance sheet of the Canadian business at the end of the last completed fiscal year before its proposed acquisition.

Non-WTO investments and investments in cultural business

Pursuant to subsections 14(3) and 14(4) of the Act, the thresholds for investments which are subject to review are 5 million dollars in asset value for direct investments and 50 million dollars in asset value for indirect transactions. These thresholds apply to investments by an investor who is not a "WTO investor", as defined in subsection 14(6) of the Act, which involve the acquisition of control of a Canadian business which is not "controlled by a WTO investor" immediately prior to the implementation of the investment.

These thresholds also apply to investments made by all non-Canadian investors to acquire control of a Canadian business that is a cultural business as described in section 14.1(6) of the Act. Notwithstanding the above, any investment which is usually only notifiable, including the establishment of a new Canadian business, and which falls within a specific business activity listed in Schedule IV of the Investment Canada Regulations (cultural heritage or national identity), may be reviewed if an Order-in-Council directing a review is made and a notice is sent to the investor within 21 days following the receipt of a certified complete notification.

The manner of calculating the value of the Canadian business that is the subject of the investment is prescribed in Section 3.1 of the Investment Canada Regulations and is based on the Canadian business' asset value as shown on the balance sheet of the Canadian business at the end of the last completed fiscal year before its proposed acquisition.

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