But in practice, his Conservatives have been more hostile to foreign takeovers of Canadian companies than any federal government — Liberal or Conservative — since the early 1980s.
They’ve now vetoed three, the latest being the proposed purchase of an Alberta oil company by Malaysia’s state-owned Petronas. That’s almost certainly a prelude, one way or the other, to the government’s decision next month on the far more important attempt by state-owned China National Offshore Oil Co. (CNOOC) to buy a major Calgary oil firm, Nexen Inc.
The explanation for Harper’s contradictory approach to foreign investment lies in Canada’s business class itself.
Canadian businesses generally welcome money. But they are not always sure they want to relinquish control to outsiders.
This seems true even in free-enterprise Alberta where, as the Calgary Herald reports, about 60 per cent of the oilsands are controlled by Canadian firms.
When Calgary’s Conservative MP Rob Anders badmouths the proposed takeover of Nexen by “Communist” China, he’s not just red-baiting.
He’s also representing the fears of those in the oil patch who, while big fans of foreign investment, worry that Chinese dominance might interfere with their plans.
The right-wing Fraser Institute, which usually takes a libertarian approach to regulation, has provided the intellectual rationale. It says the Nexen sale should be blocked because state-owned companies like CNOOC don’t play by free-market rules.
But the real reason for opposition to China is probably simpler. Canadian oil firms know how to deal with the traditional, foreign-owned majors like Exxon and Shell. They don’t know China as well.
The views of business have always determined Ottawa’s approach to the economy. John A. Macdonald’s 19th century policy of tariff protection and opposition to free trade resulted from lobbying by Canadian manufacturers. It was scrapped more than 100 years later by Brian Mulroney because business changed its mind.
Similarly, Canada’s banking laws have always favoured domestic firms for a very straightforward reason: The big banks want it that way.
The Liberal flirtation with economic nationalism in the 1970s was spurred by a faction of the business class that saw itself squeezed by U.S. multinationals. The flirtation ended when that same faction reckoned it could do better if nationalist investment restrictions were removed.
Even Harper’s very political 2010 decision to veto a takeover of Saskatchewan’s potash industry by an Australian firm was in response to provincial fears that the move might disrupt a profitable cartel-pricing arrangement.
On China, Canadian business has gone back and forth. In 2004, some senior business figures fretted publicly when a Chinese state-owned company tried to buy resource giant Noranda.
“China has a huge interest in owning our natural resources and dominating our economy,” Conservative deputy leader Peter MacKay said then.
In 2005, a National Post poll of CEOs found that a majority wanted tighter rules on foreigners trying to buy natural resource companies. Two years later, another poll — this time by the big-business Canadian Council of Chief Executives — found that 80 per cent of its members wanted restrictions on takeovers by state-owned enterprises.
Both Liberal and Conservative governments have tried to come to grips with the political problem posed by Chinese investment. The latest tweaking of the law governing foreign takeovers is expected next month.
For Harper, the problem is magnified by U.S. opposition to Chinese takeovers in so-called strategic areas like oil. Republican presidential contender Mitt Romney, a harsh critic of China, has promised that if he wins in November, he will ensure that Canadian oil flows south to the U.S. so as to create what he calls North American energy independence.
Not much room for China there.
Original Article
Source: the star
Author: Thomas Walkom
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