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

Full Document:  

Act current to 2020-09-09 and last amended on 2018-05-01. Previous Versions

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
 
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