Anonymised, illustrative composite. An $850,000 acquisition of a small Canadian publisher, a routine notification filing, and a 45-day window nobody on the deal team had reason to think mattered at that size.
At a glance
A US publishing company agreed to acquire a small Ontario publisher — a literary magazine with a loyal but modest subscriber base and a backlist of regional histories — for $850,000. Deal counsel on both sides treated the Investment Canada Act as a formality: the price sat far below the $5 million asset-value floor that governs a direct acquisition by a non-WTO investor under s.14(3), and nowhere near the far higher enterprise-value thresholds that apply to most investments from WTO member countries. The transaction was structured, priced and scheduled the way a sub-threshold acquisition normally is: file the mandatory Part III notification, close on schedule.
That notification was filed nine days before closing, certified as complete by the Director shortly after, and closing proceeded on the certified date without incident.
Thirty-eight days after the certified date, the buyer received a notice for review. Nothing about the deal’s size had changed. What had triggered it was the nature of the business — publishing — a category the Act treats as capable of being pulled into review regardless of dollar value, on a timeline that runs independently of closing.
Purchase price: $850,000, against a s.14(3) direct-acquisition threshold of $5,000,000 — the deal cleared the ordinary review threshold by a factor of nearly six. Days between the certified date and the review order: 38, inside the 45-day window s.15 allows. Days between closing and the review order: 29 — the deal had already closed, the buyer already controlled the business, and the review notice arrived against a completed transaction rather than a pending one.
ICA s.15 creates a review power that exists entirely outside the ordinary threshold structure: “An investment subject to notification under Part III that would not otherwise be reviewable is reviewable under this Part if (a) it falls within a prescribed specific type of business activity that, in the opinion of the Governor in Council, is related to Canada’s cultural heritage or national identity; and (b) within 45 days after the certified date … (i) the Governor in Council … issues an order for the review of the investment, and (ii) the Director sends the non-Canadian making the investment a notice for review.” Nothing in that text is conditioned on the size of the deal. The dollar thresholds in s.14 govern which investments are automatically reviewable; s.15 is a separate, size-blind power that reaches any notified investment at all, provided the sector and the timing both line up.
The “prescribed specific type of business activity” s.15(a) refers to is set out in Schedule IV of the Investment Canada Regulations, which lists four categories in almost identical language to the “cultural business” definition used elsewhere in the Act: “Publication, distribution or sale of books, magazines, periodicals or newspapers in print or machine readable form,” alongside film, video and music production and distribution. A publisher of a literary magazine and regional histories falls squarely within the first category. The size of the publisher was never the relevant variable — the activity was.
The 45-day window runs from the certified date, not from closing, and s.15 places no requirement that the order issue before closing occurs. A deal can close entirely on schedule, inside a window that is still open, and still be pulled into review afterward. That distinguishes this mechanic from the review most buyers plan around, which is the s.14.1 enterprise-value threshold — a test about how much of the deal’s value must be reviewable before the ordinary machinery engages at all. Where a target’s cultural-business activity instead disapplies that enterprise-value regime and drops the deal back to the s.14(3) asset limits, the analysis is a threshold substitution, not a discretionary order outside every threshold — see the cultural business that fell out of the enterprise-value test. That file is about which threshold applies. This one is about there being no threshold at all.
The buyer engaged Canadian counsel and cooperated with the review rather than contest the order’s validity, on advice that the statutory language left little room to argue the order was improperly issued once it fell inside the 45-day window. The review proceeded on the ordinary net-benefit factors under s.20 — effect on employment, participation of Canadians in management, effect on productivity and competition — applied to a business that, at $850,000, had never been sized for the cost of a full review process. Undertakings were negotiated covering continued Canadian editorial control of the magazine and retention of the existing staff for a minimum period; the deal was ultimately allowed to stand, seven months after closing, once those undertakings were accepted.
Had the buyer treated the notice for review as optional, or missed the deadline to respond, the Act empowers the Governor in Council to order the non-Canadian to divest itself of control of the business — unwinding a transaction that had already closed and been operating for months, with the divestiture terms set by the reviewing authority rather than negotiated by the parties. Planning for a sub-threshold cultural-sector acquisition with no contingency for a s.15 order risks discovering that remedy after integration work has already begun.
The tell is that every number on the deal was reassuring and none of them were the relevant test. A buyer’s first instinct on an $850,000 acquisition is to check it against the dollar thresholds and stop there, because that is where the review risk sits for almost every other sector. Publishing, film, music and broadcasting are the exception: for those activities, the question is not how large the deal is, it is whether the Governor in Council decides, within 45 days of certification, that the public interest calls for a look. Size is not a defence to that question at all.
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