Kelly McParland: Harper’s Nexen ruling leaves NDP with oilpatch on its face
THE CANADIAN PRESS/Fred ChartrandPrime Minister Stephen Harper delivers a statement approving the $15.1-billion takeover of Nexen Inc. by China's CNOOC Ltd. and the $6-billion takeover of Progress by Malaysia's Petronas
It was just moments before Stephen Harper was to appear live to outline his government’s decision on two big oilpatch deals by companies from China and Malaysia, and Liberal MP John McCallum was trying to say something sensible.
“We can’t sit here in total ignorance, criticizing the government for not doing things or doing things, when we don’t know what it is they have done,” he said with some exasperation to a rather frazzled CBC interviewer.
His point was that, until Harper actually revealed the details of the decision, it was pointless to harp away, either in support or opposition. That wasn’t an issue Peter Julian of the NDP had any problem with. He’d been harping for some time, proclaiming his sadness “that the government has chosen to rubberstamp” the takeovers. That was an odd way to term a decision which, until Friday, had been criticized primarily for the length of time it was taking the government to make up its mind. Usually, “rubberstamping” means to wave through an agreement with barely a glance. On the contrary, Julian and his mates in the NDP have been bristling for weeks because the Conservatives kept prolonging their decision.
“We’ve seen complete confusion around this investment,” proclaimed Mr. Julian. “I think it will open the floodgates to future acquisitions that are coming down the pipeline.”
Moments later, Mr. Harper appeared and was quite specific that no such thing would be allowed. Yes, Ottawa was allowing these two takeover bids – $15.1 billion by CNOOC of China for the Calgary-based oil and gas producer Nexen Inc., and $5.2-billion by Petronas of Malaysia for Calgary natural gas producer Progress Energy Resources Corp. But it would be the last time such approvals were given under the existing rules, and strict new guidelines would be in place to deal with any future bids, guidelines that would cast a disapproving eye on bids by state-owned firms for controlling stakes of oilsands operators.
“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,” the Prime Minister said. Only in “exceptional” circumstances would state-owned firms be allowed controlling interests in the future. The government, he said, “has determined that foreign state control of oilsands development has reached the point at which future foreign state control would not be of net benefit to Canada.
“…When we say that Canada is open for business, we do not mean Canada is for sale to foreign governments.”
That seems pretty clear. It doesn’t take much to calculate the government’s thinking. Having just recently sealed an investment deal with China, and having personally visited Beijing to make clear Canada would welcome investment, the government felt it couldn’t kill the first deal that crossed the table. Especially since the applicable foreign investment rules were so blurred and outdated there was little case for doing so. That being the situation, it gave the OK to the bids in hand, while making clear it won’t happen again, and that new strictures are being prepared.
Like Mr. Julian, CBC watchers weren’t waiting to hear any of this before firing off their opinions. Before Mr. Harper had even opened his mouth, a Twitter feed was running across the screen carrying the fervid little brain eruptions of eager viewers with handles like @Ugottabekiddin (“King of ChaChing province announces oil deal”), @Beari8it (“Harper is a slave to big oil masters”) and @JaniceTanton (“@pmharper about to sell my children to China.”). If the tone was a bit disturbing, the ignorance was noteworthy. You have to hope the CBC wasn’t reading this gibberish before unleashing it on the screen. Even Justin Trudeau, would-be Liberal leader, had acknowledged there was no case for rejecting the takeover bids (a fact that appeared to have Mr. McCallum in some discomfort, as it precluded the usual partisan taunts). CNOOC will get a relatively small bit of the oilsands, will be held accountable under all Canadian laws, and will pay generously for the right to dig oil from the ground. It is heavily in CNOOC’s interest to prove itself a first-class corporate citizen if it hopes to make further, non-controlling, investments for a commodity it is hungry for, and which Canada has in large supply.
Canada needs an estimated $650 billion in investment to develop the oilsands over the next decade, and can only hope to attract it by welcoming money from outside our own borders. It’s a straightforward equation that nonetheless appears to escape the NDP and its Twitter equivalents. The Conservatives may have been caught napping on this file – they’d had ample time to get their ducks in a row since the contentious takeover bid for Potash Corp. of Saskatchewan two years ago put the issue in focus, but still appeared unprepared. In the end, however, they appear to have made an intelligent enough decision, which may not be the final word on the subject but will offer greater clarity down the road, both for Canadians and for foreign investors. Maybe when Mr. Julian actually reads the details, he’ll start to understand.
National Post
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