WTO Investors – In general, individuals will be WTO investors if they are nationals of countries (other than Canada) that are members of the WTO or have a right of permanent residence in a WTO member country. Similarly to the definition of a trade agreement investor, a corporation or other entity will be a WTO investor if it, in turn, is ultimately controlled by one or more WTO investors. A widely held public company will generally be a WTO investor for the purposes of the ICA if (i) a majority of the voting shares of the company are owned by WTO investors; or (ii) no person or voting group controls the company, and at least two-thirds of the members of the company’s board of directors are any combination of WTO investors and Canadians. Indirect Acquisitions – Generally, an “indirect acquisition” for the purposes of the ICA occurs if an investor is acquiring control of a corporation that is incorporated outside Canada that directly or indirectly controls an entity in Canada carrying on a Canadian business. Cultural Businesses – The acquisition of a Canadian cultural business is subject to lower NBR thresholds for the purpose of, among other things, promoting Canadian content and cultural participation, as well as strengthening connections among Canadians. A “cultural business” includes a business that carries on certain activities involving books, magazines, periodicals, newspapers, film or video recordings, audio or video music recordings, print music, or certain radio, television or satellite programming or broadcast services. – The ICA does not include any express de minimis exception to the determination whether a business is a cultural business. A business may be considered a cultural business even if its cultural activities represent only a small part of its overall operations. The Canadian government has also generally treated the production or supply of video games and interactive digital media as cultural businesses. Moreover, the federal Cabinet may subject an acquisition of control of a Canadian cultural business to an NBR even if the acquisition does not exceed the relevant NBR monetary threshold.
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Canadian Mergers & Acquisitions
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