1. Competition Act
Earlier today, the Canadian Competition Bureau (the Bureau) announced that the pre-merger notification Transaction-Size threshold will increase from $86 million to $87 million for 2016. The new threshold, which is revised annually and is indexed to the growth of Canadian GDP, will come into immediate effect following the publication of the Canada Gazette Part 1 (anticipated to occur on February 6, 2016).
Under the Competition Act, transactions that exceed the following thresholds generally require pre-merger notification:
(i) “Parties-Size”: where the combined Canadian assets or revenues of the parties and their affiliates in, from or into Canada exceed $400 million; and
(ii) “Transaction-Size”: where the Canadian assets or revenues of the target firm generated in or from Canada exceed $87 million.
2. Investment Canada Act
The monetary threshold for pre-closing review of foreign investments remains $600 million and is based on the “enterprise value” of the Canadian business. This threshold will increase to $800 million in 2017 and $1 billion in 2019. The monetary thresholds will be subject to annual indexation thereafter.
Additionally, the monetary threshold for State-owned enterprise WTO investments for 2016 will increase from the current $369 million to $375 million in asset value for investments to directly acquire control of a Canadian business. It is anticipated that the new threshold will come into effect in the coming weeks.