The Competition Act catches far fewer Canadian deals than most acquirers assume, and the ones it does catch are decided by a mechanical two-part test — not by market share, and not by an efficiencies argument that no longer exists in the statute.
Key takeaways
STEP 01 OF 10
The Act tests four deal shapes differently. A voting-share acquisition is measured against the share thresholds in s. 110(3)(b); an asset acquisition is measured on the Canadian assets or revenue attributable to the assets being acquired under s. 110(2); an interest in a partnership or other unincorporated combination is measured under s. 110(6)(b); and an amalgamation requires at least two of the amalgamating entities to independently exceed the transaction-size amount under s. 110(4.1).
Get this classification right before you run any threshold math. A deal that is notifiable structured as a share purchase can fall out of scope structured as an asset purchase, and the reverse is also true.
STEP 02 OF 10
Section 109(1) exempts a transaction from Part IX entirely unless the parties, together with their affiliates, have Canadian assets or Canadian-sourced gross revenues exceeding $400,000,000 in aggregate. This is measured on both sides of the transaction combined, including every affiliate — not just the acquirer, and not just the target.
A deal that fails this prong is out of scope regardless of how large the transaction itself is. Confirm the combined figure before spending time on the transaction-size calculation.
STEP 03 OF 10
The transaction-size amount was enacted at $70,000,000 under s. 110(7), and s. 110(8) requires the Minister to redetermine it every year against a nominal-GDP formula and round to the nearest million. Section 110(9) requires the result to be published in the Canada Gazette. Do not quote $70,000,000 as this year's figure — treat it as the statutory floor and confirm the Gazette-published amount before relying on a number.
The Competition Bureau's own merger-review pages describe the existence of thresholds but state no dollar figure at all — they are useful for process, not for the number you actually need.
STEP 04 OF 10
Where none of the target's voting shares are publicly traded, the notifiable threshold is more than 35% under s. 110(3)(b)(ii); where any are publicly traded, it drops to 20%; and a person already above the applicable threshold is caught again at 50%. An interest in a partnership or unincorporated combination runs on a parallel 35%/50% test in s. 110(6)(b).
A private lower-middle-market target almost always uses the 35% line, which is meaningfully more permissive than the public-company 20% line most acquirers assume applies by default.
STEP 05 OF 10
Once both size prongs and the applicable share or asset threshold are met, the parties file the information required under s. 114(1). The transaction cannot close before the end of a 30-day waiting period running from the day the Commissioner receives that filing, under s. 123(a).
Time the filing against your actual signing date, not your target closing date. A 30-day clock that starts the day after signing gives you materially more schedule room than one that starts when documentation happens to be finished.
STEP 06 OF 10
If the Commissioner issues a request for additional information under s. 114(2), the waiting period restarts: a second 30-day clock begins only once that additional information has actually been received, under s. 123(b). This is a real possibility for any deal with genuine market overlap, not an edge case.
Section 123(2) allows the Commissioner to waive the remainder of the period by notifying the parties an application under s. 92 is not intended — useful to know, but not something to build a closing timeline around before it happens.
STEP 07 OF 10
Section 96, the provision that once let a merger proceed despite anti-competitive effect if it generated offsetting efficiency gains, was repealed by 2023, c. 31, s. 10. Any deal memo, precedent form, or advisor note that still references an efficiencies defence is citing a repealed section.
This is the single highest-risk stale fact in Canadian merger practice right now. If a competitive-effects concern surfaces in your deal, the efficiencies route is not available — plan the response around the substantive-lessening-of-competition test itself.
STEP 08 OF 10
Section 45(1.1) makes it a criminal offence for an employer to agree with an unaffiliated employer to fix wages or terms of employment, or to agree not to solicit or hire each other's employees. The penalty under s. 45(2) is imprisonment up to 14 years, a fine at the court's discretion, or both.
This sits directly inside a roll-up strategy: two portfolio companies still under separate ownership at signing, or a club deal between two sponsors, that quietly agree not to poach each other's technicians or staff during a transition period is exactly the fact pattern s. 45(1.1) targets. Screen for this language before it is in a signed side letter, not after.
STEP 09 OF 10
Section 45(4) preserves a defence where the restraint is ancillary to a broader agreement between the same parties and is directly related to, and reasonably necessary for, giving effect to that broader agreement's objective. A non-solicit clause inside a genuine share purchase agreement between a buyer and a departing seller is the paradigm case this defence was built for.
A standalone no-poach side letter between two competitors that happens to be signed near the same time as a deal is not automatically ancillary to it. The defence turns on the restraint being reasonably necessary to the broader agreement, not on timing or convenience.
STEP 10 OF 10
Where the acquirer is also non-Canadian, the Competition Act's waiting period runs independently of, and on a different clock than, the Investment Canada Act's notification or review process — see buying a Canadian business as a non-resident for that side of the filing.
Build a single closing-conditions schedule that tracks both clocks by their own trigger events, rather than assuming one filing's clearance implies the other is also clear.
Quoting the current Competition Act transaction-size threshold from memory. The $70,000,000 figure is the amount as enacted; the actual current-year figure is redetermined every January against nominal GDP and published in the Canada Gazette. Confirm the published amount before relying on it.
Assuming a private target automatically means a higher bar to clear. The opposite is true on the share test — a private target's threshold is 35%, more permissive than a public target's 20%. Confirm which threshold actually applies before assuming the deal is safely under it.
Citing an efficiencies defence in a competitive-effects analysis. Section 96 was repealed in 2023. If competitive overlap is a genuine concern, the analysis has to run on the substantive test itself, not on an efficiencies offset that is no longer in the Act.
Treating a no-poach side letter between two soon-to-merge competitors as automatically ancillary. The ancillary restraints defence in s. 45(4) requires the restraint to be reasonably necessary to a genuine broader agreement between the same parties. A standalone no-hire understanding negotiated alongside a deal does not automatically qualify.
Building the closing schedule around only the first 30-day window. A supplementary information request resets the clock to run from the day the response is received, not the original filing date. Model the longer path unless there is a specific reason to expect a clean first pass.
Scenario A. A sponsor's existing platform company has $250,000,000 in Canadian assets. It agrees to buy, in an asset deal, a founder-owned add-on whose assets being acquired are valued at $85,000,000. Combined party-size: $250,000,000 + $85,000,000 = $335,000,000 — under the $400,000,000 threshold in s. 109(1). The transaction-size prong is irrelevant here: because the party-size prong fails on its own, Part IX does not apply and the deal is not notifiable, regardless of the $85,000,000 transaction value.
Scenario B. Same target, same $85,000,000 asset value, but the platform company is larger — $500,000,000 in Canadian assets. Combined party-size: $500,000,000 + $85,000,000 = $585,000,000, above the $400,000,000 threshold. Transaction-size: $85,000,000 exceeds the enacted $70,000,000 figure. Both prongs are met, so the deal is notifiable and the s. 123 waiting period applies before closing. Identical target, identical deal value — the only variable that changed the outcome is the size of the platform doing the buying.
No. The applicable share threshold is 35% for a private target and 20% for a public one; both are well under 50%. Confirm the specific threshold for your target's structure rather than assuming 50% is the relevant line.
Not under s. 96 of the Competition Act — it was repealed in 2023. Any competitive-effects concern has to be addressed on the substantive test itself.
Only if that agreement is a genuine ancillary restraint to a broader agreement between the same parties and reasonably necessary to it, under s. 45(4). A standalone no-hire understanding outside that frame risks the criminal offence in s. 45(1.1).
Section 123 makes the waiting period a precondition to completion, not a formality that can be worked around by scheduling. Coordinate the closing date against the filing date and the applicable 30-day clock from the outset.
A 30-minute call covers the notifiability test and the no-poach question in one pass.
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