Anonymised, illustrative composite. Under current law, this acquisition needed only a notice any time up to thirty days after closing. Parliament has already enacted a mandatory, pre-closing version of the same filing — it is simply not in force yet, and a deal that closes late enough could be caught mid-transaction.
At a glance
A U.S. industrial group agreed to acquire 100% of a small Ontario manufacturer of precision optical and pressure sensors, components used across several industries including some sensitive to export-control and technology-transfer concerns, though the target's own customer base was overwhelmingly domestic and commercial. Deal value $9,500,000. A financing condition on the buyer's side meant closing was not expected for four to six months from signing — an ordinary timeline, and long enough for the deal team's Canadian counsel to ask a question the file would not otherwise have needed answered: what happens if the law changes underneath this deal before it closes?
The deal team's first pass treated the Investment Canada Act step as routine. At $9,500,000 the acquisition sits far below the net-benefit review threshold, and nothing about a sensor manufacturer with a domestic customer base suggested a national security concern under Part IV.1. On that read, the only ICA obligation was a notification — and under the current Act, notification is not time-pressured against closing at all.
What the routine read missed is that the notification regime itself has already been rewritten by Parliament, in a bill that received royal assent, and is simply waiting on an order bringing it into force. If that order lands before this deal closes — and Cabinet can make it at any time, with no public notice requirement tied to any particular deal — the filing this deal needs could switch, mid-transaction, from an administrative step taken after the fact to a mandatory pre-closing filing with a waiting period the closing mechanics were never built to accommodate.
$9,500,000 deal value. Four to six months between signing and expected closing. Zero days of built-in flexibility in the original closing mechanics for a regulatory waiting period that does not exist under current law — because, under current law, none was needed.
Current law first, because it is what actually governed the deal on its original timeline. s.11 makes “an investment to acquire control of a Canadian business…unless the investment is reviewable” notifiable, size-blind. s.12 lets the non-Canadian give that notice “at any time prior to the implementation of the investment…or within thirty days thereafter”. There is no standstill and no deadline that runs against closing — a buyer can close first and notify after, which is exactly the fact pattern in the non-insolvency ICA file elsewhere in this hub.
Now the part that is not current law, stated as plainly as the input for this file demands: the following is enacted and not in force. The consolidated Act's own table of contents carries a page headed, in the Department of Justice's own words, “AMENDMENTS NOT IN FORCE”, current as of the same 2026-06-21 consolidation date as the rest of the Act. Under the heading “2024, c. 4, s. 2”, it sets out a new paragraph to be added to s.11: an investment becomes notifiable where the non-Canadian would gain, among other things, “the power to appoint or nominate any person who has the capacity to direct the business and affairs of the entity…or…prescribed special rights with respect to the entity” and the target “carries on a prescribed business activity” with the non-Canadian able to access “material non-public technical information or material assets” — new paragraph 11(1)(c). Which activities count as “prescribed” is left to regulations; none had been fetched or found for this file, and nothing below identifies what they will cover.
The provision that actually changes this deal's mechanics is the one under “2024, c. 4, s. 3”, which replaces s.12 outright. The new s.12(1) requires notice “in the case of an investment referred to in paragraph 11(1)(b) in respect of a Canadian business that carries on a prescribed business activity or an investment referred to in paragraph 11(1)(c), no later than the prescribed time prior to the implementation of the investment” — read that against paragraph (b): it reaches an ordinary acquisition of control, not only the new sensitive-technology category in (c), whenever the target carries on a prescribed business activity. And the new s.12(2) attaches a standstill to it: “a non-Canadian who gives notice of an investment under paragraph (1)(a) shall not implement the investment unless the periods referred to in subsections 25.2(1) and 25.3(1) have expired.” A post-closing administrative step becomes a closing condition with a waiting period, for any deal whose target sits on a list that has not yet been published.
Counsel built the closing mechanics to flex either way rather than betting on the timeline. The purchase agreement added a covenant to monitor the coming-into-force status of 2024, c. 4, ss. 2 and 3 up to closing, a representation that neither party would take any step to implement the investment if the amendments came into force and a pre-closing notice became mandatory, and a mechanism extending the outside date to accommodate the s.12(2) standstill if that happened. As it played out, the amendments had not been brought into force by the time financing closed, so the deal proceeded on the current, size-blind, post-closing s.12 notice — filed within the ordinary thirty-day window. The pre-closing mechanism was never triggered. It was drafted because there was no way to know, four to six months out, that it would not be.
Had the amendments come into force between signing and the original closing date with no contractual flex built in, the buyer would have faced a choice between closing in breach of a filing obligation that did not exist when the deal was signed, or missing a financing-driven closing date to accommodate a standstill period nobody had budgeted for. Neither is a position a deal team wants to discover for the first time in the final weeks before closing.
The tell was the gap between how long the deal would take to close and how long the deal team assumed the law would stay still. A four-to-six-month runway is nothing unusual for a financed acquisition; treating the regulatory regime as fixed for that whole period, when the amendment that would change it has already cleared Parliament and needs only an order to take effect, is the assumption that does the damage.
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