RE:Approval by Thursday !!!!!I certainly hope it is approved by end of the week. But the average deal takes 71.5 days according to some research I did. The minister can unilateral extend it by 30 days for one time at the end of the initial 45 day period.
When will the investor receive approval of a reviewable investment?
Investors must file an application for review with the IRD prior to implementation of the investment, and allow sufficient time for review by the IRD and the Minister’s office before closing. The Minister has up to 45 calendar days (which he/she may extend by an additional period of 30 calendar days) to determine whether the investment should be approved. The review period may be extended past 75 days for an additional period which is determined by agreement between the IRD and the investor. Although it is possible to obtain approval within the initial 45 day review period, it is prudent to allow at least 75 days (and potentially longer) for approval. The average review time from April 1, 2013, to March 31, 2014 was 71.5 days.
What does “net benefit” mean?
Net benefit is not defined in the ICA. However, the Minister will consider the following factors (which are not necessarily weighted equally) to determine whether an investment is likely to be of “net benefit”:
- effect of the investment on the level and nature of economic activity in Canada;
- degree and significance of participation by Canadians in the Canadian business;
- effect of the investment on productivity, industrial efficiency, technological development, product innovation, and product variety in Canada;
- effect of the investment on competition with any industry in Canada;
- compatibility of the investment with national industrial, economic and cultural policies; and
- contribution of the investment to Canada’s ability to compete in world markets.
Furthermore, foreign investments in cultural businesses are subject to an enhanced net benefit test in addition to the considerations set out above. In practice, this means that the investor will have to set out details in its application for review on its plans for three to five years post-closing for Canadian employment, capital expenditures in Canada, Canadian management participation and responsibilities for the business, R&D activity in Canada, production in Canada and exports, and other relevant information. In addition, the investor typically must submit binding undertakings to the Minister confirming its commitment to perform the key elements of these plans.
How many investments have not been approved?
Between June 30, 1985 and March 31, 2015, the Minister reviewed and approved 1,703 investments. During this period, only three major proposals outside the cultural area have been disallowed by the Minister of Industry (i.e., Macdonald Dettwiler and Associates Ltd./Alliant Techsystems Inc. in May of 2008, BHP Billiton plc’s proposed hostile takeover of Potash Corporation of Saskatchewan in November 2010 and Accelero Capital Holdings’ proposed acquisition of the Allstream division of Manitoba Telecom Services Inc. in October 2013). Of the 98 cultural investments identified up to June 2008, only three proposals were disallowed. Note that these statistics do not reflect proposed investments which were withdrawn before the Minister reached a decision.