All questions

Competition law

Certain types of transactions that exceed prescribed thresholds require pre-merger notification under Canada's Competition Act. Such transactions cannot be completed until notice has been given to the Canadian Competition Bureau and the statutory waiting period has expired or, alternatively, has been terminated early or waived by the Bureau. Generally, pre-notification of such transactions is required if both:

  1. the parties to the transaction (together with their affiliates) have combined aggregate assets in Canada, or combined gross revenues from sales in, from and into Canada, exceeding C$400 million; and
  2. the aggregate assets in Canada of the target (or of the assets in Canada that are the subject of the transaction), or the annual gross revenues from sales in or from Canada generated by those assets, exceeds C$93 million (2021; this threshold is typically adjusted annually).

Equity investments are also notifiable if the financial thresholds are met and the applicable equity thresholds are exceeded (more than 20 per cent in the public company context, more than 35 per cent in the private or non-corporate entity context or an acquisition of more than 50 per cent of a public company voting shares or private entity equity if a minority interest is already owned by purchaser).

The Competition Commissioner can review and challenge all mergers, whether they are notifiable or not, within one year of closing. Recent developments may increase the number of transactions that are subject to review. From a legislative perspective, recently expanded affiliation rules subject previously non-notifiable transactions to mandatory notification by extending the same control and affiliation principles to all entities, including corporations, partnerships, sole proprietorships, trusts or other unincorporated organisations, which in turn expands the net of relevant entities for the size of parties calculation. From an enforcement perspective, the Bureau has announced an increasing focus on non-notifiable transactions via an expanded intelligence-gathering mandate for the Merger Intelligence and Notification Unit. In its 2020 Annual Report, the Bureau stated that these measures have led to an overall increase in voluntary communications from merging parties on non-notifiable transactions.22 Furthermore, as part of the Bureau's overall enforcement prioritisation of the digital economy, the Commissioner recently stated that the Bureau is going to be more vigilant about monitoring the acquisition of small firms by big tech. All of this serves to reinforce the importance of conducting substantive competition analysis of transactions of any size that may give rise to competition issues in Canada.