New 2018 Competition Act Merger Notification Threshold
The pre-merger notification transaction-size threshold for 2018 has increased to C$92 million from the 2017 threshold of C$88 million.1 The transaction-size threshold is based on the book value of assets in Canada of the target (or in the case of an asset purchase, of the assets in Canada being acquired), or the gross revenues from sales “in or from” Canada generated by those assets.2
The Competition Bureau must generally be given advance notice of proposed transactions when the acquired assets in Canada or revenues generated in or from Canada from such assets exceed C$92 million (transaction-size threshold), and when the combined Canadian assets or revenues in, from or into Canada of the parties together with their respective affiliates exceed C$400 million (size of parties threshold). The size of parties threshold has not been reviewed and remains the same.
Filing Fee for Merger Review Expected to Increase in 2018
Citing reasons such as rising operating and salary costs, an increase in the number of merger transactions requiring more complex work, and increasing volumes of documents requiring sophisticated analysis, the Competition Bureau has proposed an increase to the merger filing fee from C$50,000 to C$72,000.
The current fee of C$50,000 has been in effect since 2003.
If the Bureau’s proposal is approved by the Minister of Innovation, Science and Economic Development, it is expected that the new C$72,000 filing fee will come into effect in April 2018.
1 As per the indexing mechanism set out in the Competition Act, the pre-merger notification threshold is reviewed annually.
2 Assets and revenues are calculated in accordance with the Notifiable Transactions Regulations under the Competition Act.