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Competition Act (R.S.C., 1985, c. C-34)

Full Document:  

Act current to 2022-09-22 and last amended on 2022-06-23. Previous Versions

PART IXNotifiable Transactions (continued)

Application

Marginal note:General limit relating to parties

  •  (1) This Part does not apply in respect of a proposed transaction unless the parties thereto, together with their affiliates,

    • (a) have assets in Canada that exceed four hundred million dollars in aggregate value, determined as of such time and in such manner as may be prescribed, or such greater amount as may be prescribed; or

    • (b) had gross revenues from sales in, from or into Canada, determined for such annual period and in such manner as may be prescribed, that exceed four hundred million dollars in aggregate value, or such greater amount as may be prescribed.

  • Marginal note:Parties to acquisition of shares or interest

    (2) For the purposes of this Part,

    • (a) the parties to a proposed acquisition of shares are the person or persons who propose to acquire the shares and the corporation whose shares are to be acquired; and

    • (b) the parties to a proposed acquisition of an interest in a combination are the person or persons who propose to acquire the interest and the combination whose interest is to be acquired.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, s. 26
  • 2018, c. 8, s. 117

Marginal note:Application of Part

  •  (1) This Part applies only in respect of proposed transactions described in this section.

  • Marginal note:Acquisition of assets

    (2) Subject to sections 111 and 113, this Part applies in respect of a proposed acquisition of any of the assets in Canada of an operating business if the aggregate value of those assets, determined as of the time and in the manner that is prescribed, or the gross revenues from sales in or from Canada generated from those assets, determined for the annual period and in the manner that is prescribed, would exceed the amount determined under subsection (7) or (8), as the case may be.

  • Marginal note:Acquisition of shares

    (3) Subject to sections 111 and 113, this Part applies in respect of a proposed acquisition of voting shares of a corporation that carries on an operating business or controls an entity that carries on an operating business

    • (a) if

      • (i) the aggregate value of the assets in Canada, determined as of the time and in the manner that is prescribed, that are owned by the corporation or by entities controlled by that corporation, other than assets that are equity interests in those entities, would exceed the amount set out in subsection (7) or the amount determined under subsection (8), as the case may be, or

      • (ii) the gross revenues from sales in or from Canada, determined for the annual period and in the manner that is prescribed, generated from the assets referred to in subparagraph (i) would exceed the amount determined under subsection (7) or (8), as the case may be; and

    • (b) if, as a result of the proposed acquisition of the voting shares, the person or persons acquiring the shares, together with their affiliates, would own voting shares of the corporation that in the aggregate carry more than the following percentages of the votes attached to all the corporation’s outstanding voting shares:

      • (i) 20%, if any of the corporation’s voting shares are publicly traded,

      • (ii) 35%, if none of the corporation’s voting shares are publicly traded, or

      • (iii) 50%, if the person or persons already own more than the percentage set out in subparagraph (i) or (ii), as the case may be, before the proposed acquisition.

  • Marginal note:Amalgamation

    (4) Subject to subsection (4.1) and section 113, this Part applies in respect of a proposed amalgamation of two or more entities if one or more of those entities carries on an operating business, or controls an entity that carries on an operating business, and if

    • (a) the aggregate value of the assets in Canada, determined as of the time and in the manner that is prescribed, that would be owned by the continuing entity that would result from the amalgamation or by entities controlled by the continuing entity, other than assets that are equity interests in those entities, would exceed the amount set out in subsection (7) or the amount determined under subsection (8), as the case may be; or

    • (b) the gross revenues from sales in or from Canada, determined for the annual period and in the manner that is prescribed, generated from the assets referred to in paragraph (a) would exceed the amount determined under subsection (7) or (8), as the case may be.

  • Marginal note:General limit — parties to amalgamation

    (4.1) This Part does not apply in respect of a proposed amalgamation of two or more entities if one or more of those entities carries on an operating business or controls an entity that carries on an operating business, unless each of at least two of the amalgamating entities, together with its affiliates,

    • (a) has assets in Canada, determined as of the time and in the manner that is prescribed, that exceed in aggregate value the amount determined under subsection (7) or (8), as the case may be; or

    • (b) has gross revenues from sales in, from or into Canada, determined for the annual period and in the manner that is prescribed, that exceed in aggregate value the amount determined under subsection (7) or (8), as the case may be.

  • Marginal note:Combination

    (5) Subject to sections 112 and 113, this Part applies in respect of a proposed combination of two or more persons to carry on business otherwise than through a corporation if one or more of those persons proposes to contribute to the combination assets that form all or part of an operating business carried on by those persons, or entities controlled by those persons, and if

    • (a) the aggregate value of the assets in Canada, determined as of the time and in the manner that is prescribed, that are the subject-matter of the combination would exceed the amount determined under subsection (7) or (8), as the case may be; or

    • (b) the gross revenues from sales in or from Canada, determined for the annual period and in the manner that is prescribed, generated from the assets referred to in paragraph (a) would exceed the amount determined under subsection (7) or (8), as the case may be.

  • Marginal note:Combination

    (6) Subject to sections 111, 112 and 113, this Part applies in respect of a proposed acquisition of an interest in a combination that carries on an operating business otherwise than through a corporation

    • (a) if

      • (i) the aggregate value of the assets in Canada, determined as of the time and in the manner that is prescribed, that are the subject-matter of the combination would exceed the amount determined under subsection (7) or (8), as the case may be, or

      • (ii) the gross revenues from sales in or from Canada, determined for the annual period and in the manner that is prescribed, generated from the assets referred to in subparagraph (i) would exceed the amount determined under subsection (7) or (8), as the case may be; and

    • (b) if, as a result of the proposed acquisition of the interest, the person or persons acquiring the interest, together with their affiliates, would hold an aggregate interest in the combination that entitles the person or persons to receive more than 35% of the profits of the combination, or more than 35% of its assets on dissolution, or, if the person or persons acquiring the interest are already so entitled, to receive more than 50% of such profits or assets.

  • Marginal note:Amount for notification

    (7) In the year in which this subsection comes into force, the amount for the purposes of subsections (2) to (6) is $70,000,000.

  • Marginal note:Amount for notification — subsequent years

    (8) In any year following the year in which subsection (7) comes into force, the amount for the purposes of any of subsections (2) to (6) is

    • (a) any amount that is prescribed for that subsection; or

    • (b) if no amount has been prescribed for that subsection,

      • (i) the amount determined by the Minister in January of that year by rounding off to the nearest million dollars the amount arrived at by using the formula

        A × (B / C)

        where

        A
        is the amount for the previous year,
        B
        is the average of the Nominal Gross Domestic Products at market prices for the most recent four consecutive quarters, and
        C
        is the average of the Nominal Gross Domestic Products at market prices for the four consecutive quarters for the comparable period in the year preceding the year used in calculating B, or
      • (ii) until the Minister has published under subsection (9) an amount for that year determined under subparagraph (i), if the Minister does so at all, the amount for that subsection for the previous year.

  • Marginal note:Publication in Canada Gazette

    (9) As soon as possible after determining the amount for any particular year, the Minister shall publish the amount in the Canada Gazette.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, s. 27
  • 2009, c. 2, s. 436
  • 2018, c. 8, s. 118

Exemptions

Acquisition of Voting Shares, Assets or Interests

Marginal note:Acquisitions

 The following classes of transactions are exempt from the application of this Part:

  • (a) an acquisition of real property or goods in the ordinary course of business if the person or persons who propose to acquire the assets would not, as a result of the acquisition, hold all or substantially all of the assets of a business or of an operating segment of a business;

  • (b) an acquisition of voting shares or of an interest in a combination solely for the purpose of underwriting the shares or the interest, within the meaning of subsection 5(2);

  • (c) an acquisition of voting shares, an interest in a combination or assets that would result from a gift, intestate succession or testamentary disposition;

  • (d) an acquisition of collateral or receivables, or an acquisition resulting from a foreclosure or default or forming part of a debt work-out, made by a creditor in or pursuant to a credit transaction entered into in good faith in the ordinary course of business;

  • (e) an acquisition of a Canadian resource property, as defined in subsection 66(15) of the Income Tax Act, pursuant to an agreement in writing that provides for the transfer of that property to the person or persons acquiring the property only if the person or persons acquiring the property incur expenses to carry out exploration or development activities with respect to the property; and

  • (f) an acquisition of equity interests in an entity under an agreement in writing that provides for the creation of those equity interests only if the person or persons acquiring them incur expenses to carry out exploration or development activities with respect to a Canadian resource property, as defined in subsection 66(15) of the Income Tax Act, in respect of which the entity has the right to carry out those activities, if the entity does not have any significant assets other than that property.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, s. 29, c. 31, s. 229
  • 2018, c. 8, s. 119

Combinations

Marginal note:Combinations that are joint ventures

 A combination is exempt from the application of this Part if

  • (a) all the persons who propose to form the combination are parties to an agreement in writing or intended to be put in writing that imposes on one or more of them an obligation to contribute assets and governs a continuing relationship between those parties;

  • (b) no change in control over any party to the combination would result from the combination; and

  • (c) the agreement referred to in paragraph (a) restricts the range of activities that may be carried on pursuant to the combination, and contains provisions that would allow for its orderly termination.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45

General

Marginal note:General exemptions

 The following classes of transactions are exempt from the application of this Part:

  • (a) a transaction all the parties to which are affiliates of each other;

  • (a.1) a transaction in respect of which the Minister of Finance has certified to the Commissioner under paragraph 94(b) that it is, or would be, in the public interest;

  • (b) a transaction in respect of which the Commissioner has issued a certificate under section 102;

  • (c) a transaction in respect of which the Commissioner or a person authorized by the Commissioner has waived the obligation under this Part to notify the Commissioner and supply information because substantially similar information was previously supplied in relation to a request for a certificate under section 102; and

  • (d) such other classes of transactions as may be prescribed.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1991, c. 45, s. 550, c. 46, s. 594, c. 47, s. 717
  • 1999, c. 2, ss. 30, 37
  • 2001, c. 9, s. 580

Anti-avoidance

Marginal note:Application of sections 114 to 123.1

 If a transaction or proposed transaction is designed to avoid the application of this Part, sections 114 to 123.1 apply to the substance of the transaction or proposed transaction.

Notice and Information

Marginal note:Notice of proposed transaction

  •  (1) Subject to this Part, the parties to a proposed transaction shall, before the transaction is completed, notify the Commissioner that the transaction is proposed and supply the Commissioner with the prescribed information in accordance with this Part, if

    • (a) a person, or two or more persons pursuant to an agreement or arrangement, propose to acquire assets in the circumstances set out in subsection 110(2), to acquire shares in the circumstances set out in subsection 110(3) or to acquire an interest in a combination in the circumstances set out in subsection 110(6);

    • (b) two or more entities propose to amalgamate in the circumstances set out in subsection 110(4); or

    • (c) two or more persons propose to form a combination in the circumstances set out in subsection 110(5).

  • Marginal note:Additional information

    (2) The Commissioner or a person authorized by the Commissioner may, within 30 days after receiving the prescribed information, send a notice to the person who supplied the information requiring them to supply additional information that is relevant to the Commissioner’s assessment of the proposed transaction.

  • Marginal note:Contents of notice

    (2.1) The notice shall specify the particular additional information or classes of additional information that are to be supplied.

  • Marginal note:Unsolicited bid

    (3) If a proposed transaction is an unsolicited or hostile take-over bid in respect of an entity and the Commissioner receives prescribed information supplied under subsection (1) by a person who has commenced or has announced an intention to commence a take-over bid, the Commissioner shall, if he or she has not already received the prescribed information from the entity, immediately notify the entity that the Commissioner has received the prescribed information from that person and the entity shall supply the Commissioner with the prescribed information within 10 days after being so notified.

  • Marginal note:Notice and information

    (4) Any of the persons required to give notice and supply information under this section may

    • (a) if duly authorized to do so, give notice or supply information on behalf of and in lieu of any of the others who are so required in respect of the same transaction; or

    • (b) give notice or supply information jointly with any of those others.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, s. 31, c. 31, s. 53(F)
  • 2009, c. 2, s. 437
  • 2018, c. 8, s. 120
  • 2022, c. 10, s. 272

Marginal note:Prior notice of acquisitions

  •  (1) It is not necessary to comply with section 114 in respect of a proposed acquisition of voting shares or of an interest in a combination where a limit set out in subsection 110(3) or (6) would be exceeded as a result of the proposed acquisition within three years immediately following a previous compliance with section 114 required in relation to the same limit.

  • Marginal note:Notice of future acquisition

    (2) Where a person or persons who propose to acquire voting shares or an interest in a combination are required to comply with section 114 because the twenty or thirty-five per cent limit set out in subsection 110(3) or the thirty-five per cent limit set out in subsection 110(6) would be exceeded as a result of the acquisition, the person or persons may, at the time of the compliance, give notice to the Commissioner of a proposed further acquisition of voting shares or of an interest in a combination that would result in a fifty per cent limit set out in that subsection being exceeded, and supply the Commissioner with a detailed description in writing of the steps to be carried out in the further acquisition.

  • Marginal note:Exemption for further acquisitions of voting shares

    (3) It is not necessary to comply with section 114 in respect of a proposed further acquisition referred to in subsection (2) if

    • (a) notice of the further acquisition is given to the Commissioner under subsection (2) and it is carried out in accordance with the description supplied under that subsection; and

    • (b) an additional notice of the further acquisition is given to the Commissioner in writing within twenty-one, and at least seven, days before the further acquisition.

  • Marginal note:Limitation

    (4) Subsection (3) does not apply in respect of a further acquisition unless the further acquisition is completed within one year after notice of it is given under subsection (2).

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, ss. 32, 37
 
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