The Federal Government has just provided notice that the general threshold for review under the Investment Canada Act for a direct acquisition of control of a Canadian business by WTO investors for 2008 will be C$295 million. This direct acquisition review threshold is adjusted annually for inflation and growth in Canada's GDP and normally refers, (a) in the case of an acquisition of the assets used in carrying on a Canadian business, to the gross book value of those assets, (b) in the case of an acquisition of control of an entity carrying on a Canadian business, to the gross book value of the assets of that entity, and (c) in the case of an acquisition of control of an entity carrying on a Canadian business and of control of one or more other entities in Canada, to the gross book value of the assets of that entity and all other entities the control of which is being acquired.
Indirect acquisitions (e.g. acquisition of a U.S. company with a smaller Canadian subsidiary) of Canadian businesses that are either WTO-controlled or are being acquired by WTO investors generally are not reviewable (regardless of the value of the assets), but remain subject to a post-closing notification obligation under the Act. However, the acquisition of control of Canadian businesses engaged in (i) transportation services, (ii) certain cultural businesses, (iii) certain financial services, or (iv) certain uranium production activities are subject to much lower thresholds for review (C$5 million if direct and C$50 million if indirect), and there are no de minimis exceptions where a Canadian business carries on any of these activities.