Investment Canada Act threshold exemption for European Union companies directly acquiring Canadian businesses increases to $1.5 billion effective September 21, 2017

Effective September 21, 2017, most of the provisions contained in the Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act (Act), including those provisions amending the Investment Canada Act, will come into force.

Currently, most direct acquisitions of Canadian businesses by foreign investors are exempt from the pre-merger review and approval process under the Investment Canada Act if the enterprise value of the target Canadian business is under $1 billion.  However, with the Act’s implementation of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU), the $1 billion threshold will on September 21 increase to $1.5 billion (adjusted annually to reflect increases in Canada’s GDP) for direct investments made by citizens and permanent residents of any of the current 28 EU member countries and for the business entities controlled by them.