[ESTABLISHING A BUSINESS ENTITY IN CANADA] 89
Bureau always retains the right under Section 92 of the Competition Act to review any transaction where there is a lessening of competition. Where the transaction is non-notifiable, the Competition Bureau will generally only learn of it if a third-party complaint is made. The statutory exceptions to the application of the Competition Act include acquisitions of public companies or real estate, and transactions made in the ordinary course of business. The approval may be conditional upon the divestment by the acquirer and/or target of certain businesses, but generally speaking, the Competition Bureau favours structural remedies
thresholds of CDN $5 million for direct investments and CDN $50 million for indirect investments are replaced by an annually prescribed amount based on a comparative of the Canadian GDP (gross domestic product) in the current year to that of the previous year, but have not been changed for 2025. Even though transactions falling under these threshold values are not automatically reviewable, notification of the transaction to the Canadian government along with the filing of forms under the Investment Canada Act is still required. Any acquisition by a WTO investor (other than a state-owned enterprise) of a Canadian business, having an enterprise value in 2025 in excess of $1.386 billion, may be reviewed to determine the “net benefit to Canada.” In the case of a direct acquisition of control of a Canadian business by a WTO state-owned enterprise, the acquisition is reviewable if the target business has total assets in Canada whose book value exceeds $551 million. Similarly, the direct acquisition of control of a Canadian business by investors controlled in certain countries having a free trade agreement with Canada ( e.g., the United States, the United Kingdom and the European Union) is reviewable where the 2025 enterprise value exceeds $2.079 billion. The acquisition of control by a non-Canadian (i) of any Canadian business which is a cultural business or (ii) of any Canadian business by a non-WTO investor is reviewable if the asset value of the Canadian business exceeds $5 million in the case of a direct investment or $50 million in the case of an indirect investment (reduced to $5 million if the asset value of the Canadian business represents more than 50% of the worldwide assets of all entities of which control is being acquired).
over behavioural ones. Investment Canada Act
A non-Canadian establishing a new business in Canada or acquiring control of an existing Canadian business must also consider the Investment Canada Act . Any investment by a non-Canadian to establish a new business is subject to notification, either prior to implementation or within the next 30 days. The information required includes the identification of the investor, the projected number of employees at the end of the 2nd full year of operation, the projected amount to be invested in the new business over the first 2 full years of operation, and the projected level of annual sales or revenues during the 2nd full year of operation. The acquisition of control (as defined by certain statutory formulae) of a Canadian business is reviewable if the assets of the entity or entities being acquired exceed certain thresholds. For members of the World Trade Organization (WTO), and members of countries who qualify as "Trade Agreement Investors" (as that term is defined in the Investment Canada Act ), the usual
ILN Corporate Group – Establishing a Business Entity Series
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