Once again I’m dumbfounded that Stephen Harper’s university major was economics. His new policy on foreign ownership, unveiled with fanfare late last week, is as clear as the goo extracted from the dinosaur remains at Fort McMurray.Harper last Friday rebuked the majority Canadian public opposition to a proposed Chinese government takeover of Calgary oil producer Nexen Inc. with his approval of that $15.1-billion deal, and of a $5.2-billion Malaysian government state grab for Alberta oil and gas assets. In doing so, the PM unveiled a ballyhooed “get tough” stance on future foreign state designs on the Alberta tar sands.
This embarrassment of a policy (the more fawning typists in the financial press have labelled it the “Harper Doctrine”) is rent with loopholes, is incomprehensible, and lacks the clarity to be applied consistently. Harper has conceded as much in allowing that foreign government takeovers in the oilpatch will henceforth be blocked, other than those arising from “exceptional circumstances.”
Gosh sakes, every takeover is “exceptional.” Acquisitions are a blend of price haggling, political stability, interest rates, strategic fit, industrial cycles, CEO egos, and countless arcane factors. Which makes meaningless Harper’s vow to protect Athabasca heavy oil from foreign government takeovers. Beijing’s appetite even for, say, Suncor Energy Inc., the biggest remaining Canadian-owned player in the Alberta tar sands, might well fit whatever set of exceptional circumstances by which Harper and his cabinet colleagues are swayed, as they were in letting the mid-sized Nexen slip down the Communist Chinese gullet.
If only Harper had led off his doctrine with his proposed giant loophole allowing foreign governments to continue buying minority stakes in iconic Canadian assets. Then we could have turned away and resumed our holiday shopping chores.
Since time immemorial, tycoons have controlled vast enterprises with minority stakes. (See Frank Stronach, the late Ted Rogers, Warren Buffett, the Ford family, the Wal-Mart clan, etc. etc.) Conrad Black manipulated dozens of companies in which he and his “associates” held stakes as low as 14 per cent. Heaven help us that Canada’s CEO appears not to get this.
Who should and does own Canada would make for an engaging and overdue public discussion. It’s our stuff, after all.
Instead, the PM secretly tapped Calgary oil moguls for their views, and recruited a star chamber of like-minded experts including think-tanker Fen Hampson and Tom d’Aquino to personally counsel him on threats from ideologically incorrect state enterprises in the developing world. John Ibbitson of a credulous Globe and Mail gave us this gem from the not disinterested Hampson: “Clearly, Mr. Harper believes that government does have a role in preventing corporate Canada from being hollowed out by big foreign companies, whether state owned or privately held.”
That under-informed Carleton University academic should be kept away from impressionable students. Harper has sat idly by as our entire steel and mining industries were hollowed out. Thus, Dofasco, Inco, Stelco, Alcan, Falconbridge and so on joined our largely foreign owned chemical, retailing, plastics, electronics, computers, processed food, cosmetics, booze and other sectors in which the big decisions are made in Cincinnati, Munich and Seoul.
Just to confuse potential foreign investors and home viewers alike, the PM has allowed his inner “economic nationalist” to assert itself. But only when his caucus objected vociferously to a planned British private-sector purchase of Potash Corp. of Saskatchewan Inc. And to a private-sector Yankee bid for the space division of B.C.’s MacDonald Dettwiler Inc. Ottawa blocked both deals – quixotic firsts in our otherwise accommodating foreign-investment tradition.
The PMO fulsomely leaked the “concessions” it extracted from China National Offshore Oil Corp. (Cnooc) in approving its purchase of Nexen, and from the Malaysian state energy giant Petronas for its purchase of Calgary-based Progress Energy Resources Corp. But Ottawa has given us no hint of what those promises are. They’re more enforceable, one hopes, than those made by U.S. Steel Corp. when it bought Stelco Inc. and abruptly closed its legendary Hilton Works.
And so, our trust in the “net benefit” to Canada of these deals lies with our faith in the PM, who’s still in the dark about how companies are controlled. And is only now having doubts about a $40-billion fighter-jet contract whose price Harper emphatically insisted only last year was a “mere” $15 billion – a magnitude of error, or duplicity, that would earn most of us a pink slip.
Our last hard look at our economic sovereignty was Foreign Direct Investment in Canada (a.k.a. the Grey Report). It appeared 40 years ago, when Westerners called the Chinese capital Peking, the state-owned firms that now account for half of the world’s top 20 oil and gas producers didn’t have a total market capitalization of $1.2 trillion with which to raid the Calgary oilpatch, and Anne Murray was basking in her new stardom from Snowbird.
Original Article
Source: the star
Author: David Olive
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