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Investment Canada Act (R.S.C., 1985, c. 28 (1st Supp.))

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Act current to 2019-11-19 and last amended on 2018-12-30. Previous Versions

PART VRules and Presumptions (continued)

Acquisition of Control Rules

Marginal note:Manner of acquiring control

  •  (1) For the purposes of this Act, a non-Canadian acquires control of a Canadian business only by

    • (a) the acquisition of voting shares of a corporation incorporated in Canada carrying on the Canadian business;

    • (b) the acquisition of voting interests of an entity that

      • (i) is carrying on the Canadian business, or

      • (ii) controls, directly or indirectly, another entity carrying on the Canadian business,

      where there is no acquisition of control of any corporation;

    • (c) the acquisition of all or substantially all of the assets used in carrying on the Canadian business; or

    • (d) the acquisition of voting interests of an entity that controls, directly or indirectly, an entity in Canada carrying on the Canadian business, where

      • (i) there is no acquisition of control, directly or indirectly, of a corporation incorporated elsewhere than in Canada that controls, directly or indirectly, an entity in Canada carrying on the Canadian business, or

      • (ii) there is an acquisition of control described in subparagraph (i).

  • Marginal note:Rules and presumptions respecting control of entities

    (2) Subject to subsections (4) to (5), (6.1) and (6.2), for the purposes of this Act,

    • (a) where one entity controls another entity, it is deemed to control indirectly any entity or entities controlled directly or indirectly by that other entity;

    • (b) an entity controls another entity directly

      • (i) where the controlling entity owns a majority of the voting interests of the other entity, or

      • (ii) where the other entity is a corporation and the controlling entity owns less than a majority of the voting shares of the corporation but controls the corporation in fact through the ownership of one-third or more of its voting shares;

    • (c) entities that are controlled, directly or indirectly, by the same entity are deemed to be associated with each other, with any other entities controlled by any one or combination of them and with the entity or entities that control them; and

    • (d) where entities that are associated pursuant to paragraph (c) own voting interests of the same entity, the associated entities may be treated as one entity for the purposes of establishing direct or indirect control of the entity in which they own voting interests.

  • Marginal note:Presumptions respecting acquisition of control

    (3) Subject to subsections (4) to (5), (6.1) and (6.2), for the purposes of this Act,

    • (a) the acquisition of a majority of the voting interests of an entity or of a majority of the undivided ownership interests in the voting shares of an entity that is a corporation is deemed to be acquisition of control of that entity;

    • (b) the acquisition of less than a majority of the voting interests of an entity other than a corporation is deemed not to be acquisition of control of that entity;

    • (c) the acquisition of less than a majority but one-third or more of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and

    • (d) the acquisition of less than one-third of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is deemed not to be acquisition of control of that corporation.

  • Marginal note:Minister may determine

    (4) In the case of an entity that carries on or proposes to carry on a specific type of business activity that is prescribed for the purposes of paragraph 15(a), the Minister may, notwithstanding subsection (2) or (3), after considering any information and evidence submitted by or on behalf of the entity or otherwise made available to the Minister or the Director, determine that the entity is or is not controlled by another entity or that there has or has not been an acquisition of control of the entity, where the Minister is satisfied that the entity is or is not controlled in fact by that other entity or that there has or has not in fact been an acquisition of control of that entity, as the case may be.

  • Marginal note:Minister may determine

    (4.1) For the purposes of Part IV.1, the Minister may, after considering any information and evidence submitted by or on behalf of an entity or otherwise made available to the Minister or the Director, determine that the entity is or is not controlled by another entity or that there has or has not been an acquisition of control of the entity, if the Minister is satisfied that the entity is or is not controlled in fact by that other entity or that there has or has not in fact been an acquisition of control of that entity, as the case may be.

  • Marginal note:Minister may declare

    (5) If an entity referred to in subsection (4) or (4.1) has refused or neglected to provide, within a reasonable time, information that the Minister or the Director has requested and that the Minister considers necessary in order to make a decision under that subsection, the Minister may declare that the entity is or is not controlled by another entity or that there has or has not been an acquisition of control of the entity, as the case may be.

  • Marginal note:Retroactivity possible

    (6) A determination made under subsection (4) or a declaration made under subsection (5) may be retroactive to such date, not earlier than June 19, 1992, as the Minister specifies, in which case the determination or declaration shall, for all purposes of this Act, be deemed to have been made on the date so specified.

  • Marginal note:Minister may determine — control or acquisition of control by state-owned enterprise

    (6.1) The Minister may, after considering any information and evidence made available to the Minister or the Director, determine that an entity is or is not controlled by another entity, or that there has or has not been an acquisition of control of an entity, if the Minister is satisfied that the entity is or is not controlled in fact by a state-owned enterprise or that there has or has not been an acquisition of control in fact of that entity by a state-owned enterprise, as the case may be.

  • Marginal note:Minister may declare — control or acquisition of control by state-owned enterprise

    (6.2) If an entity or a state-owned enterprise has refused or neglected to provide, within a reasonable time, information that the Minister or the Director has requested and that the Minister considers necessary in order to make a decision under subsection (6.1), the Minister may declare that the entity is or is not controlled by a state-owned enterprise or that there has or has not been an acquisition of control of the entity by a state-owned enterprise, as the case may be.

  • Marginal note:Retroactivity possible

    (6.3) A determination made under subsection (6.1) or a declaration made under subsection (6.2) may be retroactive to any date, not earlier than April 29, 2013, that the Minister specifies, in which case the determination or declaration shall, for all purposes of this Act, be deemed to have been made on the specified date.

  • Marginal note:Entity to be informed

    (7) The Minister shall inform the entity concerned, in writing, of any determination made under any of subsections (4), (4.1) and (6.1) or declaration made under subsection (5) or (6.2) and of any date specified under subsection (6) or (6.3), without delay after the determination or declaration is made.

  • R.S., 1985, c. 28 (1st Supp.), s. 28
  • 1993, c. 35, s. 5
  • 1995, c. 1, s. 50
  • 2009, c. 2, s. 455
  • 2013, c. 33, s. 144

Marginal note:Acquisition by more than one transaction or event

  •  (1) For the purposes of this Act, the acquisition of anything includes any acquisition thereof that occurs as a result of more than one transaction or event, whether or not those transactions or events occur or have occurred as, or as a part of, a series of related transactions or events and, subject to any provision of this Act, whether or not one or more of those transactions or events occurred before the coming into force of this Act.

  • Marginal note:Presumption

    (2) For the purposes of subsection (1), where, as a result of more than one transaction or event, not one of which is an acquisition of control within the meaning of subsection 28(1), an entity carrying on a Canadian business is controlled in fact through the ownership of voting interests by a non-Canadian, that non-Canadian is deemed to have acquired control of the entity at the time and in the manner of the latest of those transactions or events.

Marginal note:Contractual rights to acquire voting interests or assets

  •  (1) For the purposes of this Act, a non-Canadian who has an absolute right under a written contract to acquire voting interests of an entity or to acquire any assets used in carrying on a business may, at the option of that non-Canadian, treat that right as if it had been exercised and as if that non-Canadian owned the voting interests or assets that are the subject of that right.

  • Marginal note:Voting shares carrying more or less than a voting right

    (2) For the purposes of this Act, where a voting share has attached to it more than a single voting right, or a fraction of a voting right, that voting share is deemed to be the number of voting shares, or the fraction of a voting share, that corresponds to the number of voting rights or fraction of a voting right that the voting share confers.

 
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