Investment Canada Act pre-merger review threshold increases to $ 1 billion

Canada’s planned increase to the generally applicable threshold for “net benefit” reviews under the Investment Canada Act (ICA) from $800 million to $1 billion became effective June 22, 2017. The new $ 1 billion threshold, which is calculated using the enterprise value of the Canadian business being acquired, should have the effect of exempting most investments or dispositions by WTO investors (that are not state-owned enterprises) from the “net benefit to Canada” review process under the ICA. The reduction in the number of direct acquisitions of Canadian businesses by non-Canadian buyers requiring pre-closing clearance by the Minister of Innovation, Science and Economic Development of Canada is further evidence of the Liberal Government’s desire to encourage foreign investment in Canada.
By Douglas C. New, Partner, Fasken Martineau

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