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 any of the following activities: (i) publication, distribution or sale of books, magazines, periodicals or newspapers in print or machine-readable form, other than the sole activity of printing or typesetting; (ii) production, distribution, sale or exhibition of film or video recordings (including video games); (iii) production, distribution, sale or exhibition of audio or video music recordings; (iv) publication, distribution or sale of music in print or machine-readable form; and (v) any radio communication in which the transmissions are intended for direct reception by the general public and any radio, television and cable television broadcasting undertakings as well as any satellite programming and broadcast network 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. Monetary Thresholds for NBRs A non-Canadian’s acquisition of control of a Canadian business that exceeds the applicable monetary threshold set out below will be subject to an NBR under the ICA. The thresholds for investments by or from trade agreement investors, WTO investors and SOE WTO investors are adjusted annually on the basis of changes in Canada’s GDP.
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