Nexen takeover: National security a priority in foreign acquisitions, government says
A security officer keeps watch outside the headquarters of China National Offshore Oil Corp (CNOOC) in Beijing in this February 19, 2008 file photograph. China's top offshore oil producer CNOOC, is hoping to buy Calgary energy company Nexen.
OTTAWA — The Harper government sought to re-assure Canadians Friday that national security will be a priority as it reviews a state-owned Chinese oil giant’s proposed takeover of Calgary-based energy company Nexen.
“The Investment Canada Act contains provisions to protect national security,” Foreign Affairs Minister John Baird said in the House of Commons, “and the people of Canada can be sure that our government has done its job and makes good decisions in the interest of Canada.”
The comments come a day after Canada’s spy agency warned that some state-owned foreign companies are pursuing “opaque agendas” in Canada as they attempt to acquire control over strategic sectors of the Canadian economy.
That coincided with Nexen shareholders overwhelmingly approving Thursday the $15.1-billion US foreign takeover of the company by the giant state-owned China National Offshore Oil Corporation.
The proposed takeover now rests in the hands of the Conservative government, which has been conflicted over its desire to attract more investment from foreign countries and strategic concerns over China controlling interest in a major oilsands project.
Under the Investment Canada Act, the government’s review will consider a number of factors, including whether CNOOC, as for all state-owned enterprises, adheres to Canadian standards of corporate governance as well as how and the extent to which the non-Canadian company is owned or controlled by a state.
Opposition parties have been demanding greater transparency as the Harper government reviews the proposed deal behind closed doors, and they reiterated opening the deal to public scrutiny is all the more important given the potential security implications.
“Whenever you have a transaction that involves a state-owned company that’s owned by a country that’s not a democracy, there might be security risks and security issues,” said Liberal industry critic Geoff Regan.
“And that’s why it’s all the more important for the government to disclose what’s in this deal. Canadians I think have a right to see what’s really been put on the table here so they can examine these questions.”
Only two proposed foreign takeovers have been rejected since the Investment Canada Act was introduced in 1985 — both by the Conservative government amid heavy political pressure.
The first involved the proposed takeover of satellite producer MacDonald, Dettwiler and Associates Ltd. (MDA) in 2008, and the second involved Australian giant BHP Billiton Ltd.’s attempt to buy Saskatchewan’s Potash Corp. in 2010.
Prime Minister Stephen Harper had promised changes to the Investment Canada Act to make the review process and criteria more transparent, and the government has changed things so it can explain why a proposed takeover is rejected.
But NDP House leader Nathan Cullen accused the government of not doing enough.
“It just seems to be this make-it-up-as-you-go-along policy when it comes to foreign investment.”
The Harper government has been openly working to court foreign investment into Canada and expand energy exports to Asia.
But the takeover bid has sparked heated debate, including within the Conservative cabinet and caucus, about how much foreign investment Canada should allow when it comes to strategic natural resources such as oil and gas.
International Trade Minister Ed Fast told reporters Friday that while the Harper government is trying to make Canada attractive to foreign investment, “we’re also looking for a level playing field.”
“We look for a balancing of opportunities as we engage with our key trade partners around the world,” he said.
Fast refused to talk about the proposed takeover, but said national security considerations are a key part of all the government’s economic dealings with foreign countries.
“When we negotiate trade agreements around the world, and investment agreements and other economic types of framework agreements, we always take the security of Canada into account,” he said.
“In fact, it would be our top priority to make sure Canada remains safe, secure.”
— With files from Jason Fekete
“The Investment Canada Act contains provisions to protect national security,” Foreign Affairs Minister John Baird said in the House of Commons, “and the people of Canada can be sure that our government has done its job and makes good decisions in the interest of Canada.”
The comments come a day after Canada’s spy agency warned that some state-owned foreign companies are pursuing “opaque agendas” in Canada as they attempt to acquire control over strategic sectors of the Canadian economy.
That coincided with Nexen shareholders overwhelmingly approving Thursday the $15.1-billion US foreign takeover of the company by the giant state-owned China National Offshore Oil Corporation.
The proposed takeover now rests in the hands of the Conservative government, which has been conflicted over its desire to attract more investment from foreign countries and strategic concerns over China controlling interest in a major oilsands project.
Under the Investment Canada Act, the government’s review will consider a number of factors, including whether CNOOC, as for all state-owned enterprises, adheres to Canadian standards of corporate governance as well as how and the extent to which the non-Canadian company is owned or controlled by a state.
Opposition parties have been demanding greater transparency as the Harper government reviews the proposed deal behind closed doors, and they reiterated opening the deal to public scrutiny is all the more important given the potential security implications.
“Whenever you have a transaction that involves a state-owned company that’s owned by a country that’s not a democracy, there might be security risks and security issues,” said Liberal industry critic Geoff Regan.
“And that’s why it’s all the more important for the government to disclose what’s in this deal. Canadians I think have a right to see what’s really been put on the table here so they can examine these questions.”
Only two proposed foreign takeovers have been rejected since the Investment Canada Act was introduced in 1985 — both by the Conservative government amid heavy political pressure.
The first involved the proposed takeover of satellite producer MacDonald, Dettwiler and Associates Ltd. (MDA) in 2008, and the second involved Australian giant BHP Billiton Ltd.’s attempt to buy Saskatchewan’s Potash Corp. in 2010.
Prime Minister Stephen Harper had promised changes to the Investment Canada Act to make the review process and criteria more transparent, and the government has changed things so it can explain why a proposed takeover is rejected.
But NDP House leader Nathan Cullen accused the government of not doing enough.
“It just seems to be this make-it-up-as-you-go-along policy when it comes to foreign investment.”
The Harper government has been openly working to court foreign investment into Canada and expand energy exports to Asia.
But the takeover bid has sparked heated debate, including within the Conservative cabinet and caucus, about how much foreign investment Canada should allow when it comes to strategic natural resources such as oil and gas.
International Trade Minister Ed Fast told reporters Friday that while the Harper government is trying to make Canada attractive to foreign investment, “we’re also looking for a level playing field.”
“We look for a balancing of opportunities as we engage with our key trade partners around the world,” he said.
Fast refused to talk about the proposed takeover, but said national security considerations are a key part of all the government’s economic dealings with foreign countries.
“When we negotiate trade agreements around the world, and investment agreements and other economic types of framework agreements, we always take the security of Canada into account,” he said.
“In fact, it would be our top priority to make sure Canada remains safe, secure.”
— With files from Jason Fekete
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