Threshold for review of foreign investments increases to C $1 billion

Canada’s Minister of Industry has announced that the threshold for review of foreign investments under the Investment Canada Act will be increased to C $1 billion over the next two years. The current threshold is at C $330 million. The change comes after suggestions by the Competition Policy Review Panel because of the Canadian position that foreign investment is beneficial to Canadian economic growth, except in unique circumstances. A higher threshold thus justifies ICA intervention.

The way to calculate the threshold will also be changed from using the book value of the assets to an enterprise value test, as recommended by the Review Panel. The new test will take into account intangible assets.

A Report that accompanied changes to the ICA found that U.S. and EU investors represent the largest number of ICA investors over the past five years.

Full content: Canadian Regulatory Law: News, Rules & Trends

Related content: Canada Enacts Significant Changes to its Foreign Investment Laws (Catherine Pawluch, Kevin Wright & Jonathan Gilhen, Davis LLP)

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