2026 thresholds for Canadian merger reviews

Thresholds for mergers and acquisitions under the Competition Act and Investment Canada Act have been announced for 2026. For a fifth consecutive year, the two Competition Act financial thresholds remain unchanged. The Investment Canada Act financial thresholds have increased by around 5% from last year.

What you need to know

• Competition Act: The size-of-transaction threshold for pre-merger notification under the Competition Act remains the same for a fifth consecutive year at $93 million for 2026. The size-of-parties threshold, which is not adjusted annually, is $400 million.
• Investment Canada Act: The 2026 thresholds for reviews of direct acquisitions of control of Canadian businesses (other than “cultural businesses”) by foreign investors under the Investment Canada Act have increased from:
  • $2.079 billion to $2.179 billion in enterprise value of the Canadian business for private “trade agreement” investors, which includes investors from the US, UK, EU, and Japan, among others;
  • $1.386 billion to $1.452 billion in enterprise value of the Canadian business for private investors from countries that are members of the World Trade Organization (WTO); and
  • $551 million to $578 million in asset value of the Canadian business for state-owned or -influenced enterprises (SOEs).
• Merger reviews under both the Competition Act and the Investment Canada Act have recently undergone significant changes.

The details

Competition Act thresholds

Pre-merger notification under the Competition Act is generally required for transactions where (i) the target has assets in Canada or gross revenues from sales in, from, or into Canada that exceed $93 million; (ii) the parties to the transaction, together with their affiliates, have combined assets in Canada or gross revenues from sales in, from, or into Canada that exceed $400 million; and (iii) in the case of share acquisitions, the transaction results in the acquiror owning more than 20% of the voting shares of a publicly traded target or 35% of the voting shares of a privately owned target or, if the acquiror already owns between 20% or 35% and 50% of the target, 50% of the voting shares of the target. Similar thresholds apply to acquisitions of partnership units, amalgamations, and other forms of business combination.

Merger reviews under the Competition Act have undergone significant changes in the past few years. The efficiencies defence was repealed in 2023, and other recent amendments effectively increased the number of reviewable mergers and made them easier to challenge. These changes included the introduction of a rebuttable “structural presumption” that a merger is anti-competitive if it results in certain share and/or concentration levels being exceeded. We discussed these amendments in a previous bulletin.

Investment Canada Act thresholds and national security reviews

Annual threshold adjustments are mandatory under the Investment Canada Act.

The Investment Canada Act generally requires that a non-Canadian investor proposing to acquire direct control of a Canadian business receive pre-closing approval on the basis that the investment is of “net benefit” to Canada where the enterprise value of the Canadian business is equal to or greater than $2.179 billion in the case of private trade agreement investors or $1.452 billion in the case of private WTO investors. A lower threshold of $578 million applies to acquisitions by SOEs calculated on the basis of the book value of the assets of the Canadian business.

Lower thresholds of $5 million (for direct acquisitions) and $50 million (for indirect acquisitions) also apply to investments by an investor who is not a "WTO investor" and acquisitions of Canadian “cultural businesses”, which includes businesses involved in the production or distribution of books, music, film, and other media, such as video games.

A direct acquisition of control of a Canadian business that does not exceed these thresholds, as well as an indirect acquisition by a WTO investor of any size, will not be reviewable on net benefit grounds but still require non-suspensory notification, which may be made post-closing.

Any investment (either in part or in whole) in, or the establishment of, a Canadian business by a non-Canadian investor may be reviewed if there are reasonable grounds to believe that the investment could be injurious to national security, regardless of whether the relevant financial thresholds are met. Investments where notification is not required may be voluntarily notified to achieve regulatory certainty around national security issues in advance of implementation.

The Investment Canada Act has recently undergone legislative reforms to bolster national security reviews. A mandatory pre-implementation filing requirement for investments in certain sensitive sectors and a call-in power to review investments by state-owned or -influenced entities under the net benefit review regime have received Royal Assent and are currently expected to come into force towards the end of this year or early next year.