The Canadian government has announced that the financial
thresholds for pre-closing net benefit review of foreign
investments in Canada under the Investment Canada
Act (the “ICA”) have been lowered for
2021.
The ICA contains thresholds above which foreign investors in
Canadian businesses have to obtain federal government approval
prior to closing. The approval process can take several months,
although timing is typically case specific.
The federal government adjusts these thresholds annually based
on growth in nominal GDP. The impact of COVID led to a decline in
Canadian GDP over this past year, reducing the applicable
thresholds under the ICA.
The threshold for direct acquisitions of control by WTO
investors has been lowered to $1.043 billion from $1.075 billion.
The threshold for direct acquisitions by trade agreement investors
(including investors from the United States and the European Union)
has been lowered to $1.565 billion from $1.613 billion.
