Despite an increase in gross domestic product in 2021, the Canadian government has left the threshold for pre-merger notification under the Competition Act unchanged for 2022 at C$93 million in Canadian assets or revenues.
François-Philippe Champagne, the Minister of Innovation, Science and Economic Development, confirmed that the transaction-size threshold for notifiable transactions under the Competition Act would remain at $93 million for 2022.
As a result, the Bureau must generally be given advance notice of proposed transactions when:
- The target (on a consolidated basis) has a book value of assets in Canada or annual gross revenues generated from those assets exceeding C$93 million; and
- The purchaser and target – together with all entities under common ultimate control – have a combined book value of assets in Canada or annual gross revenues in, from or into Canada exceeding C$400 million.
In an interview with the Toronto Star (paywalled), the Minister stated that the decision to keep the threshold unchanged “balances GDP growth with growing pressures from inflation.” On its website, the Competition Bureau claimed that the decision to leave the threshold unchanged balanced economic growth with inflationary pressures.
The Minister of Innovation, Science, and Industry reviews the threshold annually and may modify the amount or leave it unchanged in accordance with the GDP indexing provisions set out in the Act. This is the second time in three years that the Minister has refrained from adjusting the threshold and the threshold remains below the level it was set at before the COVID-19 pandemic.
For notifiable transactions, merging parties are required to pay a filing fee (currently $74,906). This fee is also adjusted annually, typically in early April. But, unlike the notification thresholds, adjustment of the filing fee is mandatory and based only on inflation, such that merging parties can expect higher filing fees and lower (inflation-adjusted) filing thresholds in 2022.
