CANADA: State Owned Enterprise WTO Investments Thresholds

Monday February 19 2018

The Government of Canada has announced that pursuant to the subsections 14.1(1.1) and (2) of the Act, the review threshold for 2018 will be $398 million in asset value for investments to directly acquire control of a Canadian business by:

1. WTO investors that are state-owned enterprises; and
2. non-WTO investors that are state-owned enterprises where the Canadian business that is the subject of the investment is, immediately prior to the implementation of the investment, “controlled by a WTO investor”.

The official amount was published on page 260 of the Canada Gazette on 10^th February 2018.

This threshold will be annually revised to reflect the change in Canada’s nominal gross domestic product (GDP) in accordance with the formula set out in subsection 14.1(2) (i.e., the annual change in nominal GDP at market prices multiplied by the threshold amount determined for the previous year).

The manner of calculating the value of the Canadian business that is the subject of the investment is prescribed in section 3.1 of the Investment Canada Regulations and is based on the Canadian business’ asset value as shown on the balance sheet of the Canadian business at the end of the last completed fiscal year before its proposed acquisition.

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