On February 1, 2011, the Competition Bureau announced that the pre-merger notification transaction-size threshold will be increasing from $70 million to $73 million for 2011. It is expected the new threshold will come into effect following publication in the Canada Gazette on February 12, 2011. The party-size threshold remains unchanged at $400 million.
The Competition Act authorised the Minister of Industry to annually revise the transaction-size threshold so that it reflects changes to Canada’s gross domestic product (GDP). In 2010, the Minister exercised his discretion and left the transaction-size threshold unchanged at $70 million since Canada’s GDP had contracted year-over-year from 2008 to 2009.
Accordingly, for example, in the context of a share deal, this new threshold will be met where the aggregate value of the assets in Canada that are owned by the target or by entities controlled by the target, or the annual gross revenues in or from Canada generated from those assets, exceed $73 million.
It is worth noting that the Canadian threshold increase follows a similar announcement by the U.S. Federal Trade Commission whereby the thresholds that govern transactions that must be notified were also increased to reflect changes to the U.S. GDP.