Beyond The Commons

Aaron Wherry covers all the goings-on in and around Parliament Hill. Follow Aaron on Twitter: @aaronwherry

Categories: Beyond The Commons, Capital Read

'The decision is mine and mine alone'

by Aaron Wherry on Wednesday, November 3, 2010 5:57pm - 0 Comments

Industry Minister Tony Clement turned up at a waiting podium just now and, after taking a few moments to build the drama, announced that BHP Billiton bid for PotashCorp does not constitute a “net benefit” for Canada. Seems BHP Billiton will have 30 days to resubmit, should it so desire.

Official statement after the jump.

“I can confirm that I have sent a notice to BHP Billiton indicating that, at this time, I am not satisfied that the proposed transaction is likely to be of net benefit to Canada.

“I came to this decision after a careful and rigorous review of the proposed transaction. BHP Billiton has 30 days to make any additional representations and submit any undertakings.

“At the end of that period, I will make a final decision.

“The confidentiality provisions of the Investment Canada Act prohibit me from discussing specifics of an ongoing case.

“I can assure Canadians, however, that I will provide an explanation of the reasons behind my final decision at the time that decision is made, in accordance with the provisions of the Act.

“Canada has a long-standing reputation for welcoming foreign investment. The Government of Canada remains committed to maintaining an open climate for investment.”

Tags: BHP Billiton, foreign investment, foreign takeover, Investment Canada Act, potash, saskatchewan, Tony Clement

More by Aaron Wherry

Dot

‘The decision is mine and mine alone’

Tony bought the mine? Nationalized it? Wow.
LaxAtlDfwYow

This ain't over. They've just begun the serious negotiation and at the same time attempted to resuscitate Steamboat Tony's cred after the LFC debacle.

Negotiations with SK and BHP will resume tomorrow.

LaxAtlDfwYow

Watching Brad Wall's comments.

Wow, he's sure not sounding much like a negotiation is going on. He's not using any Steamboat Tony-like weasel words. Also not sounding much like he's been privy to federal deliberations.

Interesting. May have to revise my thoughts.

hollinm

You could also stop with the name calling. It makes you look silly and unserious.

I suspect now that the government has taken the decision I doubt there will be much that BHP could do unless they satisfy Brad Wall (and he agrees). Wall's concern was the potential loss of tax revenue despite the fact that he is in control of the royalty regime.

LaxAtlDfwYow

What will be grossly irresponsible — if they ultimately accept the deal — will be the unnecessary interim turmoil and very real losses they will now wreak upon the markets. Friggin' massively irresponsible from a government that claims to be… Oh who the hell cares what they claim to be; they're simply incompetent, self-serving, empty vessels.

Orson Bean

Any market participant with half a brain knew, or ought to have known, that this transaction was subject to Investment Canada Act review and approval. That was priced into Potash's current share price. So I fail to see what is "massively irresponsible" about the government doing something that was clearly on the table as a reasonably foreseeable outcome.

Otherwise, what is the Investment Canada Act there for? Window dressing?

Emily

No one knows.

Canada has approved 1,637 corporate takeovers since 1985 and rejected one.

Guest

Which clearly shows the international markets that rejections are inordinately rare and that Canada is still open for business. It's win-win.

1 rejection out of 1637 takeovers equals a 0.06% rejection rate. That sure sounds like a strong free market to me!

Emily

And except that it would kill Cons politically….in Sask, and in Calgary…a 'hometown' for somebody or other….
Orson Bean

I agree with Saskatchewan, I think the Calgary angle was totally exaggerated by the Globe & Mail and other media outlets, who got a couple of prominent Calgary talking heads to say they wanted the deal rejected. Rejecting or accepting this particular deal would have had little political consequence in Calgary. Of course it was massive and existential for the Flatlanders.
tedbetts

On stats, you are misleading. 1637 takeovers since 1985 and 2 rejections. Both of them by Harper in the last couple of years.

I don't think you can underestimate the impact of this deal on international investment, particularly to the resource sector.

There is no Industry Canada reason to reject it – the civil servants who do this for a living approved the deal. So there is no guideline that comes out of this, only uncertainty.

BHP has likely spent millions of dollars so far on this deal. And they don't get a penny of that back.

Big money, big costs, lots of uncertainty, recovering market. And you think there is no impact from this decision? Argue it's a good decision in the end, but let's at least be honest about the impact.
Emily

They approved the deal….with lots of strings attached….as per instructions.
Orson Bean

I was, and remain, pretty much on the fence about the merits of this one. But Ted, I would point this out: one fairly solid justification for this deal is a rather market-based one: #1, no alternative bidders actually surfaced, and, #2, partly as a result of #1, the price per share being offered was, and remains, considerably below what most market analysts felt was Potash Corp's intrinsic acquisition value. There is plenty of evidence to suggest that the bid was opportunistic in terms of its timing, it was comparatively low-ball, etc. So in that sense, I can see the case for rejecting a bid of that sort for such a prized resource asset.

I'm not saying there aren't countervailing arguments. I'm just saying there are market-based arguments for rejecting the bid. And consider that Potash Corp's board and management, who have the legal fiduciary responsibility for overseeing the company (and its shareholders') interests, remain on record as opposing the BHP bid (on the primary ground that it undervalues the company).
Emily

Actually at least 2 other bidders surfaced.
Orson Bean

What the h*ll do you mean by "surfaced"? Nobody else actually made a bid for Potash Corp. Period. There was, and is as of today, no bidding war. BHP's bid is the only one on the table. Period.

Yes, Potash Corp. had had talks with a number of possible other bidders. But none of them has actually stepped up to the plate and made a bid.
Emily

Yes, a native group and the Russians.

'Surfaced' was your word.
tedbetts

Market based arguments such as these don't really factor into the assessment and they certainly didn't in this case.

The price point of a deal is entirely up to the shareholders. This decision would be far far far worse if the Conservatives made it because they weren't happy with how much the shareholders were going to make.

You've give a good reason for the shareholders to reject it; not for the government to do so.
Orson Bean

Ted, perhaps it's my fault for not being clear enough. I wasn't saying that my rationale above is a legal argument or justification under the Investment Canada Act for rejecting the bid. I'm saying that in addition to being a reason for a shareholder to reject it, it's also a policy-based political argument for the government to reject it.

In other words, if you accept the premise that the federal government has the legitimate power to accept or reject this transaction on the grounds of protecting the national interest, then I think the fact that the foreign bidder is underbidding for the asset amounts to grounds for rejection on the basis of protecting the national interest. Canada has an asset. If Canada's going to sell that asset to a foreign entity, then surely selling it for too low a price is contrary to the national interest. Also, a lot of posters have been typing furiously away on these boards about the evils of non-competitive bids (in connection with fighter jet contracts). Well, so far, that's what this process has been — an asset sale with only a single bidder. Once again, how is that in the national interest?
tedbetts

I hear you. I think that would be incredibly alarming if the federal government equated "net benefit to Canada" with a benefit to private interest.

That would run entirely against the intent of having the Investment Canada Act, which was set up to give the government the right to intervene against private interests never on behalf of private interests.

In this case, Canada is not selling anything. Some shareholders – private companies and private individuals – are considering selling something. Shareholders have loads of statutory and common law remedies and protections, including not being required to sell their shares.

Blocking a voluntary private sector transaction because the government is not happy with the price the private sector participants are going to get would be radically unprecedented and would have far bigger consequences. If that's why they did it, then best they keep very quiet about that!
Thwim

Soo.. are we saying it's now up to the gov't to determine if the price is right?
madeyoulook

Hey, the government determined that a million or two was just the right price for a gun registry. What could possibly go wrong with government judging price?
Orson Bean

No Thwim, that's not what I'm saying. But I think it is perfectly fair for the government to consider the price that was being offered, along with all the other relevant factors.

LaxAtlDfwYow

What would be irresponsible is to today reject the deal with an expectation that they would still try to get a deal in the coming 30 days. That is exactly the tone Steamboat exuded.

The BHP deal has been kicking around for months. If I recall correctly, Clement even extended the decision period. There has been plenty of time to get a deal if there was one there.

It's incumbent on governments not to cavalierly delay and (potentially) posture when that behaviour is apt to unduly influence markets. By hinting there is still a possibility of a deal they are screwing with markets. That's irresponsible.

Orson Bean

Well, I disagree with you.

What exactly is "unduly influence markets" anyway? Who determines what that is? You?

You can just as easily argue the opposite anyway. The test under the ICA is whether the transaction would result in a net benefit to Canada. If BHP is able to restructure the transaction so as to meet that test, then why shouldn't a restructured deal be able to be put forward and be considered? That's being flexible and reasonable.

Same goes for Jim Prentice's announcement on the Prosperity mine project yesterday, in which he rejected it. He didn't say they could never build a mine there, ever, under any circumstances. He said — quite reasonably, IMO — that this specific proposal was being rejected. In other words, if Taseko came back with a proposal that had fewer adverse environmental impacts, it might get approved. That is the reasonable approach to these matters. You seem to favour the guillotine approach.
hollinm

Are you slow or just a partisan hack?. The government under the law must give BHP 30 days to respond to the decision. Its the law but I guess just a minor point to your pointless tirade.

Emily

There is no law.
hollinm

Talk to Greg Weston. He said on Power and Politics that the Act requires a 30 day window to "appeal" the decision.

frobisher

BHP is up, POT is down in after-hours, FWIW.
hollinm

You know you really are blinded by your hatred for the government.

This is a deal between the two private companies. The shareholders have not even voted on the proposal. However under the Investment Review Act the government is obligated to review takeovers exceeding $299 million dollars. That is their reponsibility under the law.

They must follow the law and listen to all sides. They took the time to listen and consult and have now made their decision. So why do you consider what they have done as irresponsible. According to Greg Weston the government is obligated to give them 30 days to "appeal" the decision.

If the deal is ultimately approved then Brad Wall would need to be onside and the deal would have to be ironclad with penalties built in etc. However, that is not likely to happen. Too much political capital has been used by Wall and Harper.

Crit_Reasoning

Whoever made the decision, I think it was the right call at this point. I continue to have serious reservations about BHP Billiton's takeover bid.

Dot

i>I think it was the right call at this point.

Good boy.
madeyoulook

Crit, what are your serious reservations, please?
madeyoulook

OK, I did some digging in your I.D. history, and followed the link to Haskayne & Francis. If I have been paying attention, you are miffed because Potash is a big company extracting an important resource in cartel-ish fashion with a small number of other players worldwide in order to jack up the price of such an important commodity that people starve if worldwide agriculture can't get its hands on it. And it would be awful for an Australian-controlled company to pay SK royalties for extraction rather than a Chicago-controlled company to pay SK the royalties. And Jarislowsky thinks the bid is weak, and that's supposed to get the federal government to protect current shareholders against their own decision to willingly sell at the price offered. And wouldn't it be nice if we applied our protectionist restrictions on bank ownership to potash extraction company ownership, because Canadian banks did so much better than others worldwide, because somehow foreign-owned banks operating under the same financial institution rules in Canada were different from Canadian-owned banks operating under those financial institution rules. Oh, and you were gracious enough to pre-emptively apologize to me for these "economic nationalist dinosaur" thoughts.

How am I doing?

madeyoulook

And I feel compelled to offer you my earlier indifference to the nationality of the publicly-held corporation contracted to extract this Saskatchewan resource. Start here:
http://www2.macleans.ca/2010/09/06/why-sometimes-…

My responses (a little cryptic being pasted in isolation here, but I hope anyone who doesn't want to link through would still get the flavour):

1) A new owner shouldn't alter the royalty issue one bit. If the province had a dumb-ass inadequate royalty scheme to this point, that amounted to an undeserved subsidy. Revisiting it now that the owners are changing hands will justifiably expose the province to charges of protectionism.
2) Well, if there is at least an open market for the purchase of one of the players in an oligopoly, that has to be less worse than a government distorting the oligopoly even further.
3) Is there a national security threat deriving from the Aussie company managing the extraction and distribution? No. Is there a critical food shortage in Canada that we would feel the need to place soldiers around the potash facilities in SK? No. If it ever comes to that, could we? Yes. Does inventing an imaginary food crisis justify protectionism now? No.
4) If it is such a sweetheart deal for the new owners, then the current shareholders would indeed be idiots to liberate their shares at such a price. If these big public pension funds are not doing everything to maximise value of their current holdings, there can be no better example of why big public pension funds are a dumb idea. This, note, has nothing to do with the freedom of owners of a Canadian asset to sell to the highest bidder.
madeyoulook

And my pre-rebuttal to your concerns expressed yesterday continues here:
http://www2.macleans.ca/2010/10/21/the-commons-wh…

I inappropriately mocked Mr Ignatieff for granting Harper free market cred. I should now mock him instead for mistakenly granting Harper undeserved free market cred.
Crit_Reasoning

Hey, go easy on me, MYL!!! I apologized in advance, didn't I? ;-)

I'll get back to you on this. You've given me plenty of food for thought.

madeyoulook

I hope it tastes ok, and does not cause indigestion. I will try to remember to check back to see what you might have to say about it all, as I would like to know your thoughts.

Dot

How many times can Brad Wall say "strategic" in his press conference?

What if it was simply tactical?
MaggiesFarmboy

Woohoo!

sourstud

I take that to mean you don't own any shares in PotashCorp?

MaggiesFarmboy

Full disclosure, I don't.

But even if I had, I would have sold before the decision was made.

I'd say that after it dips tomorrow, it will be an excellent buy and hold stock. Two years from now it will be above these levels.

MaggiesFarmboy

Followed my own advice, for once, and bought some POT today…

…ahem, just to clarify, that would be POT stock.

Dot

SH: " Why should I sell your wheat fertilizer?"
MaggiesFarmboy

Yup, seems likely. <cough>
tedbetts

Hasn't fired him yet for either so I wouldn't be expecting.

Maybe Harper should fire himself? And if he's not up to the job, maybe we'll have to do it for him.

hollinm

Wouldn't you just love that ted? The fact is you guys can't beat him and it drives you nuts. Harper has taken the air out of the opposition tires once again. Now remember the company under the law has 30 days to appeal so we will see what we will see. In the meantime 2 turn downs of 1,600+ takeovers does not make a track record of discouraging investment in Canada.
Time to push for another faux scandal.

Emily

Oh do quit with the repetiton of nonsense.

This is a ministerial decision….and he could have made it final…it's not a court and there is no law of appeal.

dougrogers

Talking point, addressed to The West: "See! We wouldn't sell you down the river like the Liberals!"

Patchouli

yet…next time, gadget, next time.

Dot

Well, you have 30 days to get off the fence.

Crit_Reasoning

I'm not even on the fence. You're reading way too much into the words "at this point". That's disappointing, because I explained my position to you very clearly just yesterday.

Dot

So, you will be against the deal, any deal? i want to get it on the record. Because I see some political wriggle room here from Harper.

Crit_Reasoning

No, I'm not against any deal. I'm just against this deal. If the terms of the deal change dramatically, I'd have to take that into account. That's what reasonable people do, Dot.

Orson Bean

Exactly. Reasonable people judge things on the facts and merits, based on what's on the table.
burlivespipe

So clear this up for me — it's important to protect the interest of canadian resources against a single takeover bid, suggesting that a competitive takeover bid would legitimize the okaying of a deal. The same gov't, led by the same moe, curly and larrys that threw a billion dollar party with a fake lake for a group of nations that saw right through us, are adamant that a single-source contract for $9B-plus jets is in the country's (ie taxpayers) best interests.
I know, apples and oranges, apples and oranges. But they do grow from a tiny seed…
Orson Bean

In other words, you really hate this government. I already knew that.

Halo_Override

Nothing makes me feel warmer than a promise from Tony Clement. Especially if it's a promise to explain something with reasons. It's like a Christmas sweater for my heart.
Dave

All this conspicuous protestation from Clement that the decision is his and his alone, and the conspicuous fact-checking on the part of Harper that the decision is Clement's and Clement's alone, are starting to make me wonder if, just possibly, there is some chance that people besides Clement were involved in making the decision.

Surely that can't be the case? Surely Clement and Harper are not overcompensating for something. Surely.
http://nottawa.blogspot.com Mark

Until BHP announces that they're building a model lighthouse in Tony's riding, this deal's not going anywhere…
brooster2

I have to concede that the Cons couldn't have placated their opponents on this one, no matter what they did. If they approved the sale, they would have subjected all their SK MPs to the wrath of the electorate and been accused of being rigid ideologues. If they vetoed the sale, they'd be (are being) accused of abandoning their free market principles.

What intrigues me is that, not only did Harper put Clement out front on this one, but Clement emphatically MADE A POINT OF wearing full responsibility, personally, for the decision. This seems out of character for the PMO. I suspect they deflected responsibility for the decision onto Clement because the Minister of Industry represents an Ontario riding that (ironically) has little industry, beyond tourism, and is least likely to bear the brunt politically for the decision. He took one for the team.

Outside of this unique set of circumstances, the locus of decision-making will, no doubt, revert to the center of the universe, i.e., the PMO, and it will be business as usual.
danby

I came to this decision after a careful and rigorous review of the proposed transaction.

And the Conservative party would take a heavy beating in Saskatchewan if Mr Harper
allowed me to approve it……
Emily

So much for 'free markets'….another Con principle down the drain.
Orson Bean

I can just imagine what your reaction would have been had they approved it.
David

Emily WTF if they had approved it you would be all over them Cons can win with you!
madeyoulook

“Canada has a long-standing reputation for welcoming foreign investment. The Government of Canada remains committed to maintaining an open climate for investment.”

Sir, the above statement sounds wonderful, and represents the single most important reason why YOUR DECISION TODAY is not of net benefit to Canada. Because your decision today means you are lying when you utter the paragraph I just quoted.

This is pathetic.
Emily

Whatever gave you two the idea I care about keeping potash?? I'm the globalization poster on here.

In any case a 'free market' is supposedly a Con principle… they just threw overboard.
bergkamp

It is Orwellian, isn't it? 'Government remains committed to maintaining ….' while telling foreign investors to get on their bike, that there money is not welcome here.

Doesn't this decision make Potash Corp stocks almost worthless? Who wants to buy stocks in a company that you can never sell because Feds think money in Canadians pocket is not a net benefit.

And who came up with is idea on judging sales of private property on whether they are a net benefit to Canada? Canada does not exist, not really, but people are real and this deal would have been a net benefit to shareholders who wanted to sell their property.

I wish Conservative voters would wake up and see that Cons are socialists, just like all the other major parties. Cons will continue to be socialists if Con voters behave like sheep and continue voting for the party that is less socialist than other parties but not remotely conservative.

"There is no such thing as society: there are individual men and women, and there are families." ~ Margaret Thatcher
LaxAtlDfwYow

I wish Conservative voters would wake up and see that Cons are socialists…

The problem is that many, perhaps most CPC supporters are not primarily fiscal conservatives. The CPC has a huge law and order cohort, social conservatives, the religious right, etc. I'd speculate that the LPC has nearly as large a fiscal conservative block as does the CPC.

Not sure that outside SK, this decision has any impact on CPC support.
dougrogers

"There is no such thing as society: there are individual men and women, and there are families." ~ Margaret Thatcher

Tribes. Me. My family. My tribe.

The world is bigger.
Horton

I think it's probably because you're more known as the anti-Conservative poster around here.
Emily

I don't belong to any political party….Cons just think I do because I loathe Harp's merry band of libertarians and neo-cons. LOL
sourstud

Just because you're too cheap to take out a membership with the Liberals, doesn't make you non-partisan.
hollinm

Emily….obviously you stand for nothing and show it everyday when you incessantly comment on this board. Even I can't keep up with you. Although I don't try very hard.
bergkamp

" … perhaps most CPC supporters are not primarily fiscal conservatives."

I agree with this and it is why I have never voted Conservative. I honestly see little difference between NDP/Libs/Con. All of them are in favour of big government, huge tax bills and ever expanding State. Any policy differences that do exist are miniscule to be almost non-existent.
tedbetts

I think the world of the Nigel Wright conservatives and oil barons in Alberta will have some significant doubts about Harper's commitment to free markets. Those are a few votes, but lots of money and organizing.

Perhaps as important, conservative pundits and press will now harp on this for some time and so the aftermath coverage, more than the decision in and of itself, could have a big softening effect.
Emily

Sorry sour….I'm what I've always been…socially progressive, and fiscally conservative.

I was PC for 30 years.

Harp's merry band of magic thinkers though is socially regressive and fiscally drunken sailors.
hollinm

Exactly…..Now Emily will have to find something else to bitch about.
Emily

Well hollinm, that's because you have kool-aid in your ears. I stand for lots of things…you just don't comprehend them yet. You will, in years to come.

But I'll tell you a secret….most people in Canada don't belong to a party, they vote for whatever party appeals to them [or at least doesn't horrify them] at election time.
craigola

Lotsa yammering at Emily, not so much discussion of your own opinion of the decision. I think you try harder than you'd admit.
Shall I take a guess? "Stephen Harper's government is the greatest thing that ever happened to Canada, in this and every possible dimension, and anyone who says different is full of partisan vitriol, so of course this decision is an excellent one, just like I expected it to be!" How did I do? Was I close?
Patchouli

Curious to know how the diehard cons feel about it — happy, angry, defeated?
Emily

Yes, we're still very tribal…and that's dangerous moving as we are into a globalized world.
Emily

bergkamp apparently votes Green
hosertohoosier

Lazy pundits who attempt to use American ideological cleavages to explain Canadian politics should take heed. Our political parties are an amalgam of regional economic interests, not ideological ones. The Tory party is the party of oil, natural gas, potash, wheat, cattle, lumber and cars. The Liberal party is the party of jets, biotech, IT, fish, lawyers, finance, and cars. The NDP is the party of mining, wheat, lumber and cars.

(cars are important for all three party because car-land is where elections are won)
Orson Bean

This decision will be, politically speaking, inconsequential in Alberta. The only place where it matters politically (in terms of affecting votes) is in Saskatchewan.

If there were an oil patch takeover, that would be a different matter. And of course the level of foreign investment in the Alberta oil patch is already signficant.
LaxAtlDfwYow

I don't think there is anything short of reimplementing the NEP could cost the CPC a seat in AB.

If by "Nigel Wright conservatives" you mean fiscal conservatives in Toronto and the 905, then I agree. Pissing around with legitimate business deals for overtly political purposes may well do the CPC harm there.
Dot

Talk to Muttart. He has a job waiting when you graduate.
Emily

In other words both the Cons and NDP are parties of the past….primary resources

Cars are only important because of the bucks…it is still branch-plant economics.
Orson Bean

Good point, hth. And that's exactly why this won't really cause any significant split within the CPC.

Another reason is that everyone could see that the big political driver here was Saskatchewan, and almost nothing else. It was shaping up as an act of pure political suicide to go against Brad Wall's wishes, as he pretty much had that entire province behind him on this. Why would any PM voluntarily stick his head into that meat grinder, for no discernible countervailing benefit?

Sure, there was, and is, a slice of the free-market punditocracy in this country advocating the pure free market approach to this (Andrew Coyne, Terrence Corcoran), but those people really don't represent much of a significant voting constituency.
dougrogers

When the threat is bigger, become smaller.
hosertohoosier

Fair enough. Those aren't necessarily the industries of Canada's past. Since 2000 high tech exports as a % of the total have declined markedly (especially IT – RIP Nortel), while the share of primary resources (especially oil) have skyrocketed. Of course primary resource extraction isn't necessarily a low-tech endeavour. Canada has perhaps the most technologically advanced mining industry in the world for instance, something that is a source of competitiveness when we trade abroad.

Moreover, the high tech industries of today will be the low tech industries of the future, which makes industrial policy a problematic tool. Japan industrialized rapidly by picking winners. While this worked great in the catch-up stage, however, the rigidities in their economy and the difficulty of picking winners when you are near the technological frontier have helped to cause a generation-long productivity slowdown. Moreover the reason high tech industries have high value-added is because few countries are able to produce them. However, if everybody targets the same industries, that doesn't work.

I think a better approach is to let the market pick the next big thing, but to build good infrastructure (schools, roads, tax environment, etc.) in order to facilitate that kind of organic growth.
Emily

Primary resources have been an economy of the past since we moved up to the industrial age….which in turn is also dead. Usually only developing countries have a primary resource economy.

Yes, the hi tech of today will be the low tech of tomorrow….at one time stirrups were cutting edge.

Japan has great hi tech…where it falls down as an economy is the social end.

Lemme know when everybody targets the same industries….there are thousands of them, so there are plenty to go around

Infrastructure is no longer schools and roads etc….that too has been hit by the 21st century.
frobisher

30 days, huh? When does the third session recess?
hosertohoosier

Japan is increasingly a dinosaur. They are leaders in the production of cars, consumer electronics and semiconductors. The first two are no longer high tech sectors, and as more countries produce them, and the latter is a generic good. However, these are high visibility industries, so people bought into the idea that Japan was a technological superpower. Increasingly, the Japanese are competing in the same pool as developing countries like Malaysia or China.

Secondly, if you target sensibly, you want to build industries that have positive externalities with one another by building an industry cluster. In that sense you do not have thousands of choices, you only have a few. Allowing such hubs to evolve organically (while providing broad support to industry as a whole – I mean infrastructure in a big way – satellites and schools as much as roads) ensures that a country will develop competencies in the areas where it can best compete. Moreover, if people do a bad job of picking winners, they end up responsible, not taxpayers. I think that is a far better scenario.
Emily

Japan is the most advanced robotics nation on earth.

You are still thinking in terms of the industrial age….we aren't in that anymore.
hosertohoosier

Also, Canada is not a slouch in scientific output. Lets look at how we care in terms of percentage of the global output of science and engineering articles.

USA: 27.7%
China: 7.5%
Japan: 7%
UK: 6.2%
Germany: 5.9%
France: 4.1%
Canada: 3.7%

Considering Canada's population, we actually do quite well (Japan for instance, has four times our population, but under twice our output).
hosertohoosier

How am I thinking in the industrial age – you are the one that thinks robotics is a big deal because you are obsessed with visible industries. Service industries are where the value added is.
Emily

Industry is factories…steel, cars, coffee pots…..robots are hi tech.

Canada is 75% service economy, and we are moving from there to the knowledge economy…which is robotics, holography, biotech etc
Emily

China outdoes us all,,,,you have old figures.

Do you know how many Nobels Canada has….without looking it up?

How many of them are in advanced science?
hosertohoosier

Robots is high tech, sure but it is only one industry. And Japan is probably the quintessential example of a country using industrial policy (and who needs robots when you have 4.5 billion poor people in the world). Moreover, many of the high value-added sectors do not lend themselves to industrial policy. How do you invest in developing competitiveness in finance, for instance?

And then lets consider the role of politics. Even if government could pick winners, and even if we could wave away the old problem of opportunity cost, would they? You seem to have bought into my premise that our political parties represent a set of industrial interests. If that was so, how could you have cogent industrial policy in a democracy where the party in power changed frequently (I could grant that, given its history of one-party rule, a country like Japan might be good at industrial policy, but not one like Canada)?
hosertohoosier

I really wonder where you get these ideas, because you appear very certain of yourself. My figures are from the latest (2010) edition of the NSF's science and engineering indicators. The data itself is from 2007, because there is a lag.

See table 5-14 http://www.nsf.gov/statistics/seind10/tables.htm
Emily

Yes, there is a lag….a big lag…and a lot of patriotism
http://www.youtube.com/watch?v=Dn1brUCqEjE&p=…
Emily

Robotics is huge….and far bigger than a bunch of poor people. Factories can now run with lights out, and in a partial vacuum.

You are fighting old battles….capitalism v socialism….that are long since lost.

Our political parties have nothing to say to the matter. They are history
hosertohoosier

1. What does that cheesy video have to do with this debate (wow digital technology is the future!)?
2. The NSF data is as recent as it gets. Are you suggesting that China tripled its academic output in three years?
Emily

China my dear is outdoing us all. If you would rather rest on your nationalist laurels, that's your choice. Brag all you want.

It just means Canada is voluntarily leaping into the dustbin of history.
hollinm

Thank you for attempting to put words in my mouth. I am torn between the decision. I believe in foreign investment and the fact that Canada is a trading nation and needs that investment.

On the other hand I understand the concerns of the people of Sask. and the fact some of the companies who have bought assets in Canada i.e. Inco/Falconbridge have not abided by the terms set out by Industry Canada.

So I guess I am agnostic as to the decision. I do believe that the decision represents pragmatism versus ideological purity.

Remember of the 1,600 foreign investments only one has been declined and that was by the Conservatives. So turning this one down hardly indicates Canada is not interested in foreign investment.

Interesting the opposition wanted the deal killed now they got the answer they wanted they are questioning the process. Layton wants a review of the Investment Review Act.