As we foreshadowed in our brief on the Investment Canada Act (“ICA”) 2016-17 annual report as well as in our March 2015 bulletin announcing significant changes to the ICA, the Canada-European Union Comprehensive Economic and Trade Agreement (“CETA”), which was provisionally implemented as of September 21, 2017,[1] has resulted in a higher threshold for net benefit reviews under the ICA for many foreign investors. In particular, non-state owned enterprise investors from the EU and certain other countries with most-favoured nation treatment under Canada’s current free trade agreements (including Chile, Colombia, Honduras, Mexico, Panama, Peru, South Korea and the United States) — collectively representing approximately 80% of ICA notifications and applications last year — now benefit from a net benefit review threshold of C$1.5 billion in enterprise value for investments in non-cultural Canadian businesses.

The C$1.5 billion enterprise value threshold is likely to result in materially fewer applications for review under the ICA’s net benefit test.