Most non-Canadian companies considering acquisitions in Canada are aware that their transactions may be subject to the notification and substantive review provisions of the Competition Act. However, foreign acquirors may also have to contend with a review under the Investment Canada Act ("ICA"), Canada's foreign investment legislation.
Where the relevant statutory thresholds are met, the ICA requires non-Canadians acquiring Canadian businesses to obtain pre-closing approval from Canada's Minister of Industry, or, if the transaction involves the acquisition of a "cultural" business, from the Minister of Canadian Heritage. Reviewable investments are assessed by the responsible Minister to determine if they are of "net benefit" to Canada. Although transactions caught by ICA review are usually allowed to proceed ultimately (based on providing undertakings to the Minister), the time required to complete the ICA process may become an issue.
