Notifiable Transactions Regulations: technical updates

Summary#

These are proposed technical changes to the Notifiable Transactions Regulations (NTR) that update wording and how foreign currency is converted when deciding whether a business deal must be reported to the government. The changes align the NTR with the amended Competition Act introduced by Bill C-25 and with the Bank of Canada (BoC)’s current exchange-rate practice. The notice was published on October 1, 2022 and comments were open for 60 days (until about November 30, 2022).

What it does#

• Replaces the term “equity security” with equity interest so the regulation matches the new language in the Competition Act introduced by Bill C-25.
• Expands some wording that used to say “corporation” to the broader concept of entity (which can include partnerships, trusts, sole proprietorships and unincorporated businesses).
• Changes a phrase like “unincorporated entity” to “entity other than a corporation” to match the Act’s definitions.
• Updates the wording about internal studies and reports so that similar documents prepared by people in equivalent roles for non-corporate entities are treated the same as for corporations.
• Replaces the old “noon exchange rate” approach with a requirement to use the Bank of Canada’s published exchange rate for the relevant day, or if none is published, the rate the business would normally use. (The BoC moved from the “noon exchange rate” to a “daily exchange rate” on April 28, 2017.)
• Makes small editorial and bilingual fixes (including an updated French definition for audited financial statements).
• Keeps the substance of the notification thresholds; these are technical and wording-alignment changes rather than new policy.

Who's affected#

• Businesses and lawyers that advise on mergers, acquisitions and other transfers that can trigger a mandatory notification under the Competition Act.
• Companies that are not corporations (for example, partnerships, trusts, sole proprietorships and other unincorporated entities), which are explicitly clarified in the rules.
• The Competition Bureau and its staff who apply the NTR and compute threshold tests using exchange rates.
• Most Canadians and small companies are unlikely to notice a practical difference; the government’s analysis says the changes do not add costs and should not affect small businesses.

Why it matters#

• The changes clear up who counts as an owner or affiliate under the rules by using the same broad terms now in the Competition Act. That reduces confusion about whether non-corporate business structures are treated the same as corporations when deciding if a deal must be notified.
• Updating the exchange-rate rule brings the NTR in line with how the Bank of Canada actually publishes rates today. That can affect the Canadian-dollar values used in threshold tests, but it is a modernization of wording rather than a new tax or fee.
• Overall, these are technical fixes intended to make the regulation match the law and current practice. The proposal was open for public comment for 60 days after publication. The regulations would come into force on the day they are registered (the notice did not give a specific registration date).