Industry committee  The regulations clearly state that it is indeed the book value of the assets concerned that applies and that that value is taken from the financial statements of the Canadian business for the most recent fiscal year, prepared in accordance with generally accepted accounting practices.

Industry committee  Allow me to add that, under the Investment Canada Act, a transaction may be subject to review if it is above a certain threshold. In that case, the net benefit review threshold under the act is based on the book value of the assets concerned by the transaction in question. The regulations under the act clearly state that value is determined on the basis of the book value of the assets.

Industry committee  We can't discuss a transaction subject to the Investment Canada Act. I can talk to you in a general way about the terms and conditions that apply under the act and regulations, but I cannot talk about specific cases.

Industry committee  As regards the net benefit criterion under the act, the act prescribes a very clear threshold. If a transaction is above that threshold, it is subject to review.

Industry committee  To clarify matters, all information communicated by an investor under the act is subject to the confidentiality clauses of the act. However, it does occur that, in the case of certain transactions, the investor chooses to make public certain commitments that it has made to the government.

Industry committee  On your first point, although several of the legislative changes to the Investment Canada Act came into force when the bill received royal assent in March, as for the threshold, that provision is not yet in force. It requires regulation. The coming into force date will be set by the Governor in Council.

Industry committee  Correct. That's provided for in regulations.

Industry committee  To touch on your first point, on the enterprise value, you're right, the basis for calculating the monetary threshold where transactions become subject to the Investment Canada Act was changed in the last series of amendments to the Investment Canada Act. Now, that being said, the actual provisions related to the calculation of enterprise value are currently the subject of public consultations, so they're part of the regulations.

Industry committee  So we are currently still implementing book value. To the second point or your second question, the regulations, section 3.1 specifies clearly what constitutes essentially the book value or the value of the assets that are subject to a transaction. What the regulations say is that this value needs to be reflected in the financial statements of the Canadian company for the most recent fiscal year, and they have to be audited financial statements.

Industry committee  Yes, and in fact the regulations were published in the Canada Gazette, Part I on July 11, 2009.

Industry committee  The normal process is that there's a phase of prepublication in part I. We receive submissions from people who have views on the regulations. There could be a follow-on publication again or, alternatively, a final publication. It really depends on what input is received from stakeholders.

Industry committee  The Investment Canada Act provides that it can be either a whole enterprise that is subject to a transaction, or control over assets of an enterprise. There are a number of provisions detailed in the act and regulations that define what an enterprise is. The regulations that were made public for public consultations talked to the concept of the enterprise value when a whole enterprise is the subject of a transaction versus when part of an enterprise, such as a substantive asset, is part of a transaction.

Industry committee  The Investment Canada Act is very clear about what the value of the assets is and how it needs to be determined for purposes of applying the threshold and determining whether or not a transaction is subject to the act. So it is in regulation. It talks about the asset value in the last audited financial statement of the Canadian enterprise.

Industry committee  Actually, its origin is in international agreements that Canada was party to, where at the outset the first threshold was established. Since then, there has been an annual increment, the formula of which is in legislation and regulations. So annually the threshold increases. Last year it was $295 million.

Industry committee  Those were the thresholds that were set as part of international negotiations. I would add that this $312 million clearly, by law, applies to WTO countries. Non-WTO countries have a lower threshold prescribed in law, which is $5 million for direct acquisitions.