2026 thresholds for review: Investment Canada Act thresholds increase, Competition Act thresholds remain the same

The Competition Bureau has announced that thresholds for pre-merger notification under the Competition Act will remain unchanged in 2026. The “size of transaction” threshold has remained frozen at C$93 million since 2021 (when it was reduced from C$96 million to C$93 million), with the result that, each year, a greater share of mergers are subject to mandatory pre-closing review by the Competition Bureau.

Thresholds for pre-closing “net benefit” reviews for direct investments under the Investment Canada Act (ICA) have been increased for 2026. These thresholds are adjusted annually in January.

Competition Act

Under the Competition Act, a pre-merger notification is required to be made where two financial thresholds are met:

• “Size of Transaction” Threshold: the value of the assets in Canada or the annual gross revenue from sales in, from or into Canada of the target operating business (and, if applicable, its subsidiaries) must be greater than C$93 million.
• “Size of Parties” Threshold: the parties, including their affiliates, must have aggregate assets in Canada or annual gross revenues from sales in, from or into Canada, in excess of C$400 million.

The filing fee merging parties are required to pay for notifiable transactions is currently C$88,690.45. The filing fee is expected to be adjusted for inflation in April.

Investment Canada Act

Under the ICA, any acquisition of control of a “Canadian business” by a “non-Canadian” is generally either notifiable or reviewable by the federal government, depending on the structure of the transaction and the value and nature of the Canadian business being acquired.

With limited exceptions, the federal government must be satisfied a reviewable transaction “is likely to be of net benefit to Canada” before closing can proceed. Notifiable transactions (that are not subject to a net benefit review) only require that the investor file a notification prior to or within 30 days of closing (however, amendments are pending that will require a pre-closing notification for certain investments in yet-to-be-prescribed sensitive sectors).

Independent of the net benefit review thresholds, the ICA also has a national security review (NSR) regime, which permits the government to review any investment by a non-Canadian in a Canadian business on national security grounds (including minority investments and the formation of a new business).

“Net benefit” review thresholds

Direct acquisitions¹ of control of a Canadian business by investors controlled from countries with which Canada has a free trade agreement (trade agreement investors) that are not state-owned enterprises (SOEs) will generally be subject to pre-closing review where the enterprise value of the Canadian business exceeds C$2.179 billion (up from C$2.079 billion in 2025). This threshold also applies where the Canadian business being acquired was, immediately prior to the investment, controlled by a trade agreement investor.

Direct acquisitions of control of a Canadian business by investors controlled from WTO member countries (WTO investors) that are not SOEs and not trade agreement investors will generally be subject to pre-closing review where the enterprise value of the Canadian business exceeds C$1.452 billion (up from C$1.386 billion in 2025). This threshold also applies where the Canadian business being acquired was, immediately prior to the investment, controlled by a WTO investor.

The enterprise value calculation depends on the nature of the transaction:

Direct acquisitions of control of a Canadian business by an SOE controlled from a WTO member country will generally be subject to pre-closing review where the Canadian business has assets with a book value of C$578 million (up from C$551 million in 2025).

The net benefit review threshold for investments by non-WTO investors, or for the direct acquisition of control of a cultural business (regardless of the buyer’s nationality) is C$5 million in book value. The threshold for an indirect acquisition of control is C$50 million in asset value ($5 million in certain instances). These thresholds have not changed.

National security review regime

The ICA’s NSR regime applies broadly to all investments by non-Canadians that may be “injurious to national security,” including minority investments and the creation of a new Canadian business. Investments by SOEs are subject to enhanced scrutiny, with investments in certain sectors such as critical minerals being approved on an exceptional basis only.²

The NSR regime grants the federal government broad powers to protect national security, including prohibiting the investment, attaching conditions (including interim conditions and post-closing undertakings), or requiring the investor to divest itself of its investment (if it has already been implemented).

In August 2022, the federal government introduced a voluntarily notification regime that allows non-Canadian investors to obtain pre-closing NSR clearance where their investments are not otherwise subject to mandatory notification or net benefit review. Investments not formally notified can be reviewed on national security grounds for up to five years after the investment is completed.

The government is taking further steps to strengthen Canada’s NSR regime. In March 2024, the federal government passed a suite of amendments aimed at strengthening Canada’s national security review regime, not all of which are in force.³ The pending changes include new mandatory pre-closing filing requirements for investments, including certain minority investments, in yet-to-be prescribed sensitive business sectors. These amendments are expected to come into force later this year.