However, in the context of NSRs, cultural businesses or investments by state-owned enterprises, the Minister may deem that an entity is or is not controlled by another entity, or that there has or has not been an acquisition of control of another entity, on the basis of an assessment of whether control in fact exists or has been acquired. What is a State-Owned Enterprise? The ICA broadly defines a state-owned enterprise (SOE) to include a foreign government or agency, or an entity or individual controlled or influenced, directly or indirectly, by a foreign government or agency. The ICA does not define the term “influenced,” but it may include something less than legal control. The ICA also allows the Minister to deem an entity to be a non- Canadian if the Minister is satisfied that the entity is controlled in fact by one or more SOEs. Moreover, the Minister may determine that an investment by an SOE constitutes an acquisition of control in fact even if the investment does not otherwise meet the definition of an acquisition of control. As discussed below, acquisitions by SOEs attract generally lower thresholds for an NBR, and the government has issued some policy statements regarding NSRs and NBRs of investments by SOEs. What are the available exemptions? Certain acquisitions of control that are subject to approval under specified federal legislation governing banks and some other financial institutions are exempt from both NBRs and NSRs. The ICA also contains several additional exemptions from NBR review (but not NSR review), including, most notably, mergers and corporate reorganizations following which the ultimate direct or indirect control of the Canadian business through the ownership of voting shares remains unchanged. Other NBR exemptions include acquisitions of control pursuant to (i) ordinary course provisions of venture capital under certain conditions, (ii) trading in securities in the ordinary course of a person’s business, and (iii) the facilitation of short-term financing where certain conditions are met.
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