By Aaron Wherry - Wednesday, May 1, 2013 - 0 Comments
In an essay for Policy Options, Thomas Mulcair lays out his vision for resource development.
Within a framework of sustainable development — including a cap-and-trade system and thorough environmental assessments — New Democrats would prioritize our own energy security and with it the creation of high-paying, value-added jobs, refining and upgrading our own natural resources right here in Canada — just as other resource-rich developed nations like Norway already have.
With unused refining capacity in eastern Canada already available, increasing west-east capacity is, in fact, a win-win-win — better prices for producers (and higher royalties for provinces), more jobs here at home and greater energy security for all Canadians. Shouldn’t that be Canada’s top priority for natural resource development?
As we move to seize these opportunities at home, we must also foster the international trade and foreign investment relationships that will ensure we have the capacity to meet them. In the past two years alone, state-owned Chinese companies like PetroChina and CNOOC have invested more than $25 billion in the Canadian oil and gas sector. That trend is expected only to grow.
New Democrats support breaking down trade barriers, lowering tariffs and reducing protectionism. We believe that government has a role to play in creating the predictability and clarity that potential investors count on. But we also believe that our government must stand first and foremost for Canadian interests, rather than ideological purity.
Mr. Mulcair actually mentions cap-and-trade twice, in the first reference he describes the NDP proposal as “a comprehensive upstream cap-and-trade system.”
A couple weeks ago, I noted the problems with the European carbon market and some questions about the future of carbon-pricing in Canada. I then sent those questions around to a few people. Here is a response from PJ Partington and Clare Demerse with the Pembina Institute. Continue…
By Aaron Wherry - Wednesday, January 30, 2013 at 8:00 AM - 0 Comments
The CBC reports that three Conservative MPs put their concerns about the Nexen deal in writing.
A third Conservative MP, LaVar Payne of Medicine Hat, Alta., wrote to Paradis Aug. 21, 2012 to raise “grave” concern about the human rights record of China — calling it “far from stellar.” “It is my belief that Canadian laws must prevail, and that if we were to allow a state-owned company of a foreign nation that brutally represses its own citizens to buy a strategic asset here, we would be setting a very dangerous precedent,” he wrote. He also flagged potential problems with the “lack of environmental concern” by the regime in Beijing.
“I do believe that the Chinese administration has little to no regard for environmental preservation, and this is another area of concern,” he said.
That actually makes four MPs who are on record as objecting after James Bezan’s objections were disclosed last November.
By Aaron Wherry - Friday, December 14, 2012 at 2:38 PM - 0 Comments
I sat down with NDP leader Thomas Mulcair in the leader of the opposition’s office yesterday. Here is a transcript of our conversation, slightly abridged and edited.
How do you see the last year for you and the NDP? Do you feel you’re winning? Do you feel you’re getting somewhere?
We’re doing well. And the Abacus poll was confirmation of that … I dare say that we’ve been through a rough 18-month cycle. I mean, we started off in 2011 with a huge high, May 2. We realized then … It was interesting. I don’t think I’ve told too many people this story. I sat down with Jack shortly after, like two, three days after the election and when we became official opposition, he was asking me to become opposition House leader, it was a great feather in my cap. And then he said something to me that was quite interesting, he said, you know, this is a huge challenge. And I was just expecting him to be so effusive with the breakthrough and everything and he said, no, no, this is going to be a huge challenge. So then the huge challenge became all the bigger with his loss. And then we had to really work hard through a long, seven-month leadership where we were missing a lot of our frontbenchers who were in the campaign and then we had to rebuild.
When I held the little press conference up in Toronto after the leadership, the next day, I used an expression that came to spontaneously, I said, we’re going to have a cascading transition under the sign of continuity. So I was so lucky, like somebody like [chief of staff to Jack Layton] Anne [McGrath] stayed with me long enough to hand off to [current chief of staff] Raoul [Gebert], overlapped with Raoul … So a couple of the other changes that took place were like that. We brought in a few people, the core team you still recognize when you see them around us. And so it’s been a huge challenge in terms of the structure and the organization, but some of the good points for me after becoming leader: in August I was doing my parish visit in Quebec, I would be in places like Vercheres—Les Patriotes, where Sana Hassainia is our MP, and be in a community hall on a Sunday morning with several hundred people who had all paid as part of a fundraiser, but she had municipal officials there, you know the mayors and the councillors, she had community groups, she had the schools and stuff like that. They’re getting settled in, they’re putting down roots. The same day I was at a corn roast for Helene LeBlanc and she had about 600 people and a lot of the cultural communities, so they’re setting down roots, they’re doing their fundraising, they’re getting well known in their communities, they’re in their local papers, so that part’s coming together.
Come this spring, we’re pivoting, right? We’re going to be entering the third year. And so the consolidation phase has to be finished. We’ve got to start the preparatory phase for the next campaign. Continue…
By Paul Wells - Thursday, December 13, 2012 at 3:30 PM - 0 Comments
Paul Wells on Stephen Harper’s recent reversals
The other day Stephen Harper’s government announced it will support an NDP bill that will require officers of Parliament to be fluent in French and English. “Our support for this bill,” said Industry Minister Christian Paradis, “sends a clear message that the promotion of the two official languages, now more than ever, guides the actions of the federal government.”
Paradis’s comment was accurate. But it would have been more precise if, instead of “now more than ever,” he had said, “now more than in October 2011, when we appointed an auditor general who couldn’t speak French and spent months insisting that was no big deal.” In short, the government is now preparing to require, by law, that it not do what it just did.
It has been that kind of month. More or less explicit repudiation of previous acts and stances has been the theme of the year-end for Stephen Harper and his colleagues. One of the questions we are left with is how Harper, notoriously a risk-averse, control-freak incrementalist, managed to leave hundreds of feet of skid marks around a bunch of big files.
Take the new jet fighters. We used to call them F-35s, but now we are less sure. In the office of Rona Ambrose, the public works minister, there is a jar. I am told in all seriousness that if anyone involved in ﬁnding a replacement for Canada’s aging F-18 fighter fleet calls that replacement “the F-35,” the minister has them put a dollar in the jar. That’s how adamant Ambrose is that the choice of the F-35 not be locked in.
Of course for two years the government was adamant that the choice of the F-35 was locked in. It’s a little cruel to dig up old quotes on this. But just one. On March 10, 2011, the Prime Minister said: “This is the option that was selected some time ago, because it is the only option available,” he said. “This is the only fighter available that serves the purposes that our air force needs.” Hope you have a dollar for the jar, big guy.
Of course what happened is that times changed. The government’s costing of the F-35 was optimistic and short-term to begin with. Optimism worked out the way it usually does when you’re buying something big and untested. The old talking points grew stale, then ludicrous, and the government stuck with them until the government looked stale and ludicrous, and now it denies saying what it once said. None of this is a tragedy: the jets haven’t been bought, no purchase order has been cancelled, there is still time to choose a more realistic course. But it’s all been a bit awkward.
Take energy. A year ago Harper pronounced the nation’s energy sector open for business, shed a tear for the newly reluctant Yankee customer who had blown whatever right he might once have had to our bounty, and looked eastward, which means westward across the Pacific, to new markets. These markets included China, which was new only in the sense that Harper had spent five years hoping he could find some other market as ravenous as China but less, well, Communist. The Chinese welcomed our new-found willingness to sell them things, and responded with new-found eagerness to buy Canadian things. Things like Alberta. Harper faced another conundrum.
At the beginning of the month he announced his solution: state-owned enterprises would be permitted to buy Canadian firms just this once, and then not again. His stated reason was that if too many state-owned enterprises from one country bought up parts of the oil patch, it would constitute foreign government ownership of an entire industry. So he would permit two proposed takeovers, including the purchase of Nexen by China’s CNOOC, then no more.
Got it. State-owned industry bad, oil sands sensitive. None of this explains why the government rejected the purchase of Potash Corp., which is not in the oil sands, by Australia’s BHP Billiton, which is not state-owned. Nor does it explain why the government first blocked the takeover of Progress Energy by Malaysia’s Petronas, before accepting it later.
(Full disclosure: my spouse, Lisa Samson, is a registered lobbyist for Progress and Petronas.)
The likeliest answer is that Harper was surprised by the antipathy the CNOOC-Nexen bid stirred up. His candidate and visiting party dignitaries heard an earful about it from voters on the doorstep during the recent Calgary Centre by-election campaign. So he improvised an adjustment to earlier plans, and left himself tons of wiggle room for next time. Further energy-sector takeovers by state-owned companies will be accepted “in exceptional circumstances,” which means: “We’ll tell you when it happens.”
None of this is a pretty sight, but neither does it spell trouble for Harper in the short term. As long as he usually moves from more trouble to less, he is moving the way Conservative voters want him to. The PM has had a messy year, but on jets, language politics and energy, he has stopped digging himself deeper. Jan. 23 will mark the seventh anniversary of his election.
By Aaron Wherry - Tuesday, December 11, 2012 at 10:53 AM - 0 Comments
The Conservative MP approves of the CNOOC and Petronas takeovers, but questions the idea of the federal government judging “net benefit.”
The further reality is that it is not entirely clear to me that governments and not shareholders are in the best position to make these decisions. Certainly, if you own a small business, you would be able to sell that enterprise to whomever you chose to. Why should stock certificates in a larger enterprise notionally be any different?? Absent some extraordinary security rationale, shareholders should be able to sell their personal property (shares) to whomever they choose. Why, in a free market, should they be forced to sell their stock at a discount in a smaller pool of government approved purchasers??
It is for this very reason that, in my view, the net benefit test has an inappropriate reverse onus. Absent an investment injurious to national security, deference should be given to markets and to the owners of property. If there is not “Net Harm” to national security, the transaction should be allowed to proceed. The issue of state ownership poses further issues, although more perceived than real. It is acknowledged that states will occasionally pursue political rather than economic objectives. That is why I am generally suspicious of Crown Corporations. But in the case at hand, the costs of bad decisions are bourne by the citizens of China and Malaysia, while the benefit accrues to Canada. The precious resource, while in the ground, does not belong to the extractor—it belongs to, and is regulated by, the provincial government. I see no net harm by allowing Asian State Owned Enterprises to pay royalties to the Province of Alberta and taxes to the Government of Canada.
By Paul Wells - Tuesday, December 11, 2012 at 12:24 AM - 0 Comments
John Ivison’s latest column is mostly about the
F-35 F-18 replacementF-35, but it includes a bit about the CNOOC-Nexen deal as well.
“The public seems to appreciate that the takeover of a relatively minor player, for a whopping premium, at a particularly ticklish time in the Canada-China trade relationship was a prudent move. The government will now use this as a bargaining chip in the attempt to strike a more reciprocal rapport with the Chinese, as we move toward exploratory talks on a broader free trade agreement.”
The notion that CNOOxen is a “bargaining chip” is one we’ve seen fairly frequently lately. From the Globe:
“Senior federal government officials told The Globe and Mail that Prime Minister Stephen Harper has been increasingly concerned with how Canada might gain more bargaining power to open up markets for Canadian companies in China. The Conservatives, they say, feel that the two-way investment relationship is overwhelmingly in Beijing’s favour right now.”
And from, well the Globe:
“People close to the federal government said the idea of gaining more leverage with foreign governments came to be a key factor in Mr. Harper’s thinking.”
It’s too bad the government had to use a Chinese takeover of a Canadian energy firm as the long-sought bargaining chip. It’s too bad the government didn’t have some sort of treaty that could protect Canadian investors in China hey waitaminnit —
For indeed the government has spent very nearly all of Calendar Year 2012 proclaiming it has just such a treaty in hand: the notorious Canada-China Foreign Investment Protection and Promotion Agreement, or FIPA. Continue…
By Stephen Gordon - Monday, December 10, 2012 at 11:36 AM - 0 Comments
The proper context for thinking about the CNOOC-Nexen and the Petronas-Progress takeovers is what I described here: the real economic story of the oil sands is the investment in physical capital—structures and equipment—that is required before production can even start.
These investment numbers are very, very large. The oft-cited estimate of $650 billion in the next decade should be taken with a grain of salt, because we don’t know the assumptions that went into it. Even so, the fact that the costs of a single oil sands installation is measured in billions of dollars suggests that estimates in the hundreds of billions of dollars are at least plausible. (To give you an idea of how big these numbers are, current Canadian GDP is around $1.8 trillion a year.)
A national accounts identity tells us that all investment expenditures must be financed out of the savings of someone, somewhere:
Investment = Private domestic savings + Public domestic savings + Foreign investors’ savings
Let’s look at each component in turn.
By Erica Alini - Friday, December 7, 2012 at 6:48 PM - 0 Comments
Although Nexen is headquartered in Calgary, it has extensive operations in the U.K. North Sea and the U.S. Gulf of Mexico, which is why CNOOC’s takeover bid triggered governmental reviews there too. In Europe, the deal was subject to scrutiny by both the European Commission, which gave it the green light today, and the U.K. government, which hasn’t signed off on it yet. The jury is still out in Washington as well, where CNOOC and Nexen have pulled and refiled their application for government approval last week.
Some have suggested that Nexen’s holdings in the U.K. and the U.S. could be just as interesting for CNOOC as Canada’s oil patch.
The U.K. is where Nexen currently gets its lion’s share of daily barrels, though production in the North Sea peaked years ago. Still, one Reuters analyst suggested that Nexen’s British oilfields would grant CNOOC “a critical role at the heart of the world oil pricing system.”
The U.S., on the other hand, doesn’t account for very much of Nexen’s current production but exploration potential in the Gulf of Mexico is “significant” and U.S. assets are “critical component” of growth strategy, according the company. The Wall Street Journal reported that ”Cnooc executives aim to use [these] assets as a platform for further deals, according to people familiar with the situation.”
By Aaron Wherry - Friday, December 7, 2012 at 5:50 PM - 0 Comments
The Prime Minister’s remarks this evening on the CNOOC and Petronas acquisitions.
“Today the Minister of Industry rendered decisions respecting two foreign investment proposals.
“These decisions will be closely studied.
“It is therefore important that Canadians, and also foreign investors, understand how the government will approach such decisions in the future.
“In particular, Canadians generally, and investors specifically, should understand that these decisions are not the beginning of a trend, but rather the end of a trend.
“Investment is critical to our Government’s focus on jobs and growth.
“And, Canadians expect that we shall approve foreign investments that are of net benefit to Canada.
“But, all investments are not equal.
By Chris Sorensen - Friday, December 7, 2012 at 5:27 PM - 0 Comments
The important events leading to the final decision
June 28, 2012: Progress Energy Resources reveals that it has agreed to a friendly takeover by Malyasia’s Petronas in a deal valued at $5.5 billion
July 23, 2012: Nexen announces that it has agreed to be bought by CNOOC (China National Offshore Oil Company) in a deal valued at $15.1 billion. The proposed takeover was immediately viewed as a test of both Prime Minister Stephen Harper’s policy on China and Canada’s foreign investment rules.
July 30, 2012: Some U.S. lawmakers call on the Obama administration to block the deal in the U.S., where Nexen own assets in the Gulf of Mexico. “I believe this merger could lead to a massive transfer of wealth from the American people to the Chinese government,” writes Edward Markey, a senior Democrat in the House of Representatives, in a letter to Treasury Secretary Timothy Geithner. Political opposition in the U.S. similarly stymied CNOOC’s attempt to buy Unocal, a U.S. energy company, in 2005.
Aug. 21, 2012: CNOOC slashes its dividend payments by 40 per cent to save cash to pay for the Nexen deal.
Sept. 6, 2012: Prime Minister Stephen Harper promises more clarity on Canada’s foreign takeover rules, which have been criticized for being opaque and susceptible to politics.
Sept. 13, 2012: Alberta Premier Allison Redford indicates her support for foreign investment during a trip to China, where she met with CNOOC officials. “We have always believed foreign investment assisted us with growing our economy so we are encouraging that,” she says.
Sept. 20, 2012: Nexen shareholders vote in favour of the CNOOC takeover.
Oct. 11, 2012: Ottawa extends its deadline to review the Nexen takeover by 30 days.
Oct. 19, 2012: Industry Minister Christian Paradis rejects Petronas’s proposed takeover of Progress, saying in a statement issued just before midnight, the deal failed a “net benefit” test. Progress responds the next day by promising to find a solution to the government’s concerns. “The long-term health of the natural gas industry in Canada and the development of a new LNG export business are dependent on international investments such as Petronas’, ” CEO Michael Culbert says in a statement.
Nov. 2, 2012: Ottawa extends the deadline for its Nexen decision by 30 days. The new deadline is Dec. 10.
Nov. 20, 2012: Petronas says it has extended the date for its takeover of Progress until Dec. 30, and has taken additional steps to win Ottawa’s approval.
Dec. 7, 2012: While announcing new guidelines for foreign investment in Canada, the government says both the Nexen-CNOOC deal and the Petronas-Progress Energy Resources Corp. deal will be permitted.
By Aaron Wherry - Friday, December 7, 2012 at 4:59 PM - 0 Comments
Acquisitions of Nexen and Progress Energy will go through
The Harper government has approved both CNOOC Limited’s $15.1-billion acquisition of Nexen Inc. and Petronas’ $5.2-billion acquisition of Progress Energy Resources Corp., while announcing new guidelines for foreign investment in Canada.
In separate statements released after North American markets closed on Friday, Industry Minister Christian Paradis said he was satisfied that the acquisitions by Malaysia’s Petronas and China’s CNOOC were likely to be of net benefit to Canada. Paradis said both companies had “made significant commitments to Canada in the areas of: governance, including commitments on transparency and disclosure; commercial orientation, including an adherence to Canadian laws and practices as well as free market principles” and “employment and capital investments, which demonstrate a long-term commitment to the development of the Canadian economy.” Initially, Malaysia’s Petronas $6-billion bid for Progress Energy was rejected by the federal government and the company later revised its proposal.
“Our statements today will not satisfy everybody,” Prime Minister Stephen Harper said shortly after the announcements were made. “Some believe you are either ‘for’ foreign investment under all circumstances, or that you must be ‘against’ foreign investment under any circumstance. Practical government rarely permits such simplicity.”
Under the new guidelines, the acquisition of oil sands companies by foreign state-owned enterprises will only be found to constitute a new benefit for Canada in “exceptional circumstances.” And, despite today’s decision on Nexen, the prime minister seemed eager to draw a line on such investments, saying these decisions marked “not the beginning of a trend, but rather the end of a trend.”
“To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead. That was never the purpose of the Investment Canada Act. It is not an outcome that Canadians would ever support. It is not an outcome any responsible government of Canada could ever allow to happen,” the Prime Minister explained.
Beyond the oil sands, acquisitions by state-owned companies will be reviewed to consider the control or influence to be exerted on the Canadian business, the control or influence likely to be exerted on the larger industry and the control or influence likely to be exerted by the foreign government over the state-owned company.
“In light of growing trends, and following the decisions made today, the government of Canada has determined that foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada,” Harper said. “When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.”
The Conservative government’s decisions drew mixed reviews.
David Detomasi, a professor of international business at Queen’s University, said the two deals forced Ottawa to clarify the Investment Canada Act’s “net benefit” test, which was used to quash the takeover of Potash Corp. of Saskatchewan two years ago. “I think the Harper government was caught a little bit flat-footed when these bids were made,” he says. “I think they realized that whatever precedent they set was going to be something they were going to have to live with. And that’s because there are likely other deals in the offing.”
Even so, it will be a tough balance for Ottawa to strike, according to Detomasi. Recovering crude from the oil sands is a massively capital-intensive business and there aren’t enough deep-pocketed Canadian companies capable of making the necessary investments. And many foreign companies—particularly those in China—are state-owned. “Unfortunately, they’re the ones with the cash.”
The opposition New Democrats declared themselves “profoundly disappointed” with the Nexen deal, suggesting that proper public consultation did not occur before the decision was made. “Canadians should be very apprehensive about the long-term economic and environmental consequences,” Peter Julian, the NDP’s natural resources critic, said in a release. “In the past, these kinds of takeovers have resulted in job losses. In October, the NDP called for the government to reject the CNOOC acquisition.
While saying that the Liberals welcome investment—”we do need investment in the oilsands and in other industries”—Liberal trade critic Wayne Easter also expressed concerns. “There’s still really no clarity. We still don’t know the details. We have no idea what those rules really are,” he said. “Are all state-owned enterprises being handled the same, whether it’s China or any other country? Should there be different criteria, given the strategic planning of some countries versus others? Is there reciprocity here? I’m led to believe there’s not. There should be reciprocity in terms of how Canadian investment in China is handled in a similar way to Chinese investment in Canada.”
Alberta Premier Alison Redford said her government was “pleased” with the Harper government’s decisions, but that Alberta would be seeking clarity on how “exceptional circumstances” will be defined.
By The Canadian Press - Friday, December 7, 2012 at 4:49 PM - 0 Comments
OTTAWA – The federal government will shortly announce decisions on two key foreign takeover…
OTTAWA – The federal government will shortly announce decisions on two key foreign takeover deals involving domestic resource firms, The Canadian Press has learned.
The prime minister will announce whether he is giving the green light to the China National Offshore Oil Company in its $15.1-billion friendly bid for Alberta-based Nexen (TSX:NXY).
Stephen Harper will also say whether a pending takeover of natural gas company Progress by Malaysian state-owned company Petronas will go ahead.
An official from the Prime Minister’s Office briefing reporters in a media lockup told them the number of takeover deals involving state-owned companies reviewed by Investment Canada has soared from just one per cent five years ago to more than 20 per cent in 2011. Continue…
By Aaron Wherry - Friday, December 7, 2012 at 3:22 PM - 0 Comments
Industry Canada has summoned reporters to a meeting on the Hill for a briefing at 4pm. The embargo on that briefing lifts at 5pm and then the Prime Minister is due to deliver a statement in that same room at 5:15pm.
By Erica Alini - Friday, December 7, 2012 at 1:15 PM - 0 Comments
Update: The Harper government has approved both CNOOC Limited’s $15.1-billion acquisition of Nexen Inc and Petronas’ $5.2-billion acquisition of Progress Energy Resources Corp. Read the full story here.
The Harper government has until Dec. 10 to allow or block the proposed $15-billion takeover of Calgary-based energy oil and gas producer Nexen by China National Offshore Oil Company. In September, Nexen shareholders approved CNOOC’s bid by an overwhelming 99-per cent margin. The government is reviewing the deal under the Investment Canada Act, which mandates public scrutiny of foreign takeovers worth over $330 million. Normally, the decision would sit with the minister of industry, who is charged with assessing whether the investment is of “net benefit” to Canada. CNOOC’s case, though, is more complicated than that, for two reasons. First, the Chinese energy behemoth is a so-called “state-owned enterprise,” for which the government has set out additional guidelines. Second, earlier this year, the Canadian Security Intelligence Service warned that firms “with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here.” So the Nexen takeover might also have triggered review under national security parameters, even though CSIS never specifically mentioned CNOOC. Under the Investment Canada Act, a national security review would be in the hands of the cabinet, not just the Minister of Industry.
Below is our Q&A on the matter with Debra Steger, a law professor at the University of Ottawa and senior fellow at the Centre for International Governance Innovation. Steger, a former senior WTO official and trade negotiator for the Canadian government, explains what we do and don’t know about the ongoing review, how our process stacks up to that of the U.S. and other countries and why all this matters:
By Aaron Wherry - Tuesday, November 20, 2012 at 4:36 PM - 0 Comments
The Prime Minister does not often bother with any questions beyond the initial opposition leaders’ rounds. Today though, after Bob Rae had finished his three questions, Mr. Harper stood to respond to a query from the NDP’s Peter Julian. But he did so not just to respond to the official opposition (emphasis mine).
Peter Julian: Mr. Speaker, today Canadians found out through anonymous leaks that CNOOC has agreed to meet the federal government’s request. What request? This is the first time Canadians have heard of any request coming from the federal government on CNOOC. The government refuses to be transparent, refuses to be accountable, refuses to have respect for Canadians, so what is the government respecting of CNOOC and why is it doing it in secret? Why is it doing it behind closed doors?
Stephen Harper: Mr. Speaker, let me just address that very briefly. The Minister of Industry has been very clear. The government’s policy on these matters, while we welcome foreign investment, is to scrutinize every individual foreign investment to make sure they are in the bests interests of this country. On the one hand, the position of the NDP, as we know, is to be against all of these investments. The position of the Liberal Party, as reiterated yesterday, is to rubber-stamp every single one of them. We think Canadians expect us to examine these investments carefully and make sure they are in the best interests of Canada.
See previously: ‘It is in Canada’s interest’
By Aaron Wherry - Tuesday, November 20, 2012 at 9:00 AM - 0 Comments
Justin Trudeau makes the case for approving the CNOOC takeover of Nexen.
Why is the CNOOC-Nexen deal good for Canada? Because Chinese and other foreign investors will create middle-class Canadian jobs. Foreign investment raises productivity, and hence the living standards of Canadian families. More fundamentally, it is in Canada’s interest to broaden and deepen our relationship with the world’s second-largest economy.
Of course there should be conditions attached. All foreign investors must obey the letter and the spirit of Canadian labour, environment, corporate governance and immigration laws. In certain sectors, national security concerns will be real. However, in the CNOOC case, Chinese ownership of three percent of oilsands leases hardly constitutes a national security issue.
By Aaron Wherry - Wednesday, November 7, 2012 at 9:52 AM - 0 Comments
“The dismissal of a reporter from the Selkirk Record was an independent decision made by her publisher.”
“The story in iPolitics is misleading and has taken my replies to Ms. Winzoski out of context. The fact is that Ms. Winzoski’s correspondence was specifically about the Canada-China Foreign Investment Partnership and Protection Agreement (FIPA). Inadvertently, my office forwarded her my reply on the China National Offshore Oil Co. (CNOOC) and Nexen deal. When my staff realized they had sent the wrong reply, they issued a recall and sent her my response on FIPA.”
“These are two different issues. My reply on Canada-China FIPA was taken out of context and implied that I had changed my position on CNOOC. I fully support FIPA and ensuring Canadian businesses and their investments in China are protected. I stand by my comments opposing the CNOOC purchase of Nexen and have expressed my concerns to Minister Paradis and cabinet. Minister Paradis will make his decision in due course based upon Canadian laws and what’s in the best interest for Canada.”
By Aaron Wherry - Monday, November 5, 2012 at 10:21 AM - 0 Comments
Within this tale of small town politics, is the news that James Bezan briefly objected CNOOC’s proposed acquisition of Nexen.
I would like to note that I am strongly opposed to this deal, and I have raised my concerns directly with Cabinet as well as with the Prime Minister. As I have stated to my colleagues in Cabinet, due to China’s dismal record on human rights and freedoms, I take particular exception to allowing a state-owned company from China to purchase a Canadian company…
As a Conservative, I am in favor of keeping markets open in Canada, however I do not support allowing state-owned and state-controlled enterprises to take over publicly traded Canadian companies, as these state-owned and controlled business [sic] are not on the same level playing field as other free enterprising corporate entities.
By Aaron Wherry - Friday, November 2, 2012 at 7:27 PM - 0 Comments
Christian Paradis announces that the Harper government is extending the review period for the CNOOC/Nexen acquisition. The new deadline is December 10.
After the Harper government announced a first extension three weeks ago, a decision was supposed to be due next week.
By Charlie Gillis - Wednesday, October 24, 2012 at 5:25 PM - 0 Comments
New poll suggests the province’s residents are cooling to Beijing, despite all that cash spent in the oil patch
China’s thirst for oil is Alberta’s insurance policy—a guarantee of investment and jobs amid economic turmoil in the U.S. and Europe. Small wonder, then, that Albertans have been reliably sanguine when it comes to forging close economic ties with China. More sanguine, at least, than other Canadians.
That might be changing.
In an Alberta-only poll released today, 64 per cent of respondents said they disapproved of Chinese investment in the province if it took the form of full ownership of assets; a lukewarm 37 per cent said they found partial ownership acceptable. That’s a sharp break from one year ago, when a healthy majority agreed with the proposition that they should welcome Chinese investment.
By The Canadian Press - Thursday, October 11, 2012 at 10:55 AM - 0 Comments
OTTAWA – The federal government is extending its review period for the proposed takeover…
OTTAWA – The federal government is extending its review period for the proposed takeover of Nexen Inc. (TSX:NXY) by China’s state-owned offshore oil company.
Industry Minister Christian Paradis says the review under the Investment Canada Act is being extended by 30 days and can be extended again, with the consent of CNOOC.
An initial 45-day review period was set to end Friday.
“A determination will be made based on the six clear factors that are laid out in detail in Section 20 of the act and the guidelines on investment by state-owned enterprises,” Paradis said in a statement.
“The required time will be taken to conduct a thorough and careful review of this proposed investment.”
China National Offshore Oil Corp. is offering $15.1 billion to buy Calgary-based Nexen in what is the largest deal so for in the Canadian oilpatch involving a Chinese company.
Under the legislation the deal, which has already been approved by shareholders, must be of “net benefit” to Canada to be approved.
The proposed takeover has sparked concern in Ottawa, with Prime Minister Stephen Harper having said it “raises a range of difficult policy questions.”
The Canadian Security Intelligence Service report for 2010-11 also warned that when companies with links to foreign intelligence agencies or hostile governments try to acquire control over strategic sectors of the Canadian economy, it can represent a threat.
The NDP has called on Ottawa to block the takeover and cited a litany of concerns including national security and environmental concerns as well as CNOOC’s human rights and employment record.
The deal also faces a review by regulators in the United States where similar concerns have been raised.
Debt rating agency DBRS has said the benefits of the takeover of Nexen are “somewhat mixed” because the deal is not financially necessary for Nexen, which is already a strong company with good access to capital markets. However, it could bolster Canada’s relationship with China and open up new markets.
Both Nexen and CNOOC have sought to address concerns about the deal and have highlighted the potential benefits.
Nexen has said that CNOOC will keep the Nexen name and expand the role of the company’s Calgary headquarters to manage not just Nexen’s assets, but also some $8 billion of the Chinese company’s other assets in North and Central America.
By macleans.ca - Monday, October 8, 2012 at 6:10 AM - 0 Comments
This week: John Baird, Alison Redford, Daryl Katz, CFIA, Ikea
Telling it like it is
Foreign Affairs Minister John Baird lambasted the United Nations from the podium of the General Assembly, saying that its “preoccupation with procedure and process” is hindering progress in war-torn Syria. “While the brutal and repressive regime of Bashar al-Assad continues the slaughter of its own people,” Baird seethed, the UN “continues to fail to impose binding sanctions that would stem the crimson tide of this bloody assault.” Baird reaffirmed calls for Assad to quit and—making a particularly unrebuttable point—for action to secure Syrian chemical weapons.
Alberta Premier Alison Redford expressed support for the China National Offshore Oil Corporation’s bid for Calgary oil and gas company Nexen, telling the Calgary Herald that Alberta is open for business. Redford chided economic nationalists, noting that outside oil investors “are simply buying leases to extract our resources on our terms.” Meanwhile, Redford stuck to her guns in the battle over the proposed Northern Gateway pipeline, resisting B.C. Premier Christy Clark’s request for a slice of royalties in return for access to the coast.
By The Canadian Press - Thursday, October 4, 2012 at 12:38 PM - 0 Comments
OTTAWA – The federal NDP says it stands opposed to the proposed takeover of…
OTTAWA – The federal NDP says it stands opposed to the proposed takeover of Calgary-based energy company Nexen by CNOOC, a state-owned Chinese corporation.
The official Opposition says the process to examine the takeover is deeply flawed and leaves too many unanswered questions.
NDP resources critic Peter Julian said the Harper government has failed to act in good faith and tell people the true consequences of the proposed $15.1-billion deal.
“We’re talking about a company that plays a key role in a critical sector of our economy,” Julian said.
He said the takeover raises questions about the future of Canadian jobs and the location of the new company’s head office.
It’s also unclear how Canadian environmental standards will be enforced.
“Foreign investments are crucial for reinforcing our economy, but we must ensure that these investments are not made at the cost of quality jobs and the sustainable development of our resources,” Julian said.
Industry critic Helene Leblanc said transparency is a key issue.
“By studying this transaction behind closed doors and not specifying what criteria they used to determine what represents a net benefit for the country, the Conservatives have given us no choice,” she said.
“When in doubt, it’s best to back off.”
Note to readers: This is a corrected story. An earlier version said the deal was valued at $1.5 billion.
By Aaron Wherry - Thursday, October 4, 2012 at 11:37 AM - 0 Comments
Barring further information, the NDP is apparently compelled to oppose the CNOOC takeover of Nexen. Here was Thomas Mulcair’s assessment on Tuesday.
What we’ve been saying from the start is that we should have public consultations. That’s our position. That’s allowed under the Act and we should consult with Canadians. This is fundamental. This is about whether or not Canadians are going to control their own natural resources. The government says it’s going to have new criteria for looking at investments from other countries. They added a couple of things today. They’re starting to talk about security issues. They’re starting to talk about control over our natural resources when it’s a takeover by a foreign government through a state-owned enterprise of a foreign government. So we think that those things should have been on the table since the beginning. They’ve been talking for years about updating those criteria. They’ve never done it. So that’s the conversation we want to have with Canadians. We think that those are valid issues.
If you listened to Don Davies’ question today, he went a little bit further with regard to the fact that there’s protection for Chinese investing in Canada but there’s not reciprocity. Canadian investors would never be allowed to buy the raw natural resources of China. So there’s something terribly wrong with a government that keeps signing these deals where we pass for chumps, where they get something that we don’t get.
Stephen Gordon considers Pat Martin’s suggestion of “economic treason.”