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“We are sitting ducks.”
That’s the way Anthony Campbell, the former head of the Intelligence Assessment Secretariat of the Privy Council Office, put it to me the other day. We were talking about Beijing’s designs on Canada’s energy resources, Beijing’s adroit cunning in enfeebling Canadian foreign policy, and how Canadians have been rendered unable to cope with the drama as it unfolds.
The Chinese Year of the Dragon began inauspiciously with Prime Minister Stephen Harper and Industry Minister Joe Oliver riffing on a clever talking-points stratagem dreamed up by neophyte Conservative war-room hangabouts. It featured American billionaire socialists infiltrating into Canada to ambuscade the construction of Canada’s last-hope economic lifeline, to China.
Most Canadians had probably never even heard of the Enbridge project, which is a plan to build a huge bitumen tube from Alberta’s oilsands to saltwater on the northern British Columbia coast. Still, whatever Ottawa was shouting about, it seemed to contain enough resemblance to a kernel of truth. So it worked for a while.
But what Harper and Oliver inadvertently opened up was a nasty and troubling question that nobody in Ottawa is particularly happy to hear people asking. Just what legally constitutes a foreign activity in Canada that is detrimental to this country’s national security interests these days, anyway?
As it turns out, Canada is practically incapable of answering that question with any enforceable coherence. When it comes to the recent and rapid-succession manoeuvres that have given Chinese state-owned entities the spigot key at critical flow points in Canada’s oil and gas industry, mysteries abound. But it is now clear that slowly but surely, Canada’s regulatory defences have been almost completely hollowed out.
A mere political millisecond ago, Canada was in an uproar over the Beijing-owned China Minmetals’ $4.7-billion bid to take over the Canadian mining giant Noranda. Beijing backed off in 2005, but the scare was enough to convince Ottawa that it needed to get around to closing the troubling Investment Canada Act loopholes that could easily allow foreign-government entities to easily take over Canadian economic assets unless someone was playing really close attention. But the loopholes weren’t closed, and the problem has only got worse.
After the China Minmetals scare, Industry Canada set up a Competition Policy Review panel that was supposed to come up with the means to cope with the national-security implications of foreign-government takeovers, but that key task was taken back from the panel in October, 2007. Two months later, Industry Canada quietly disclosed that the “national security” questions arising from takeovers by foreign government entities would be looked at through the same regulatory binoculars that Ottawa uses to examine investments in Canadian companies by private foreign firms.
Then, against the advice of intelligence experts and even some of the Conservative government’s closest friends, the federal cabinet approved regulations under the Act that deliberately avoided a definition of the term “national security.” Expert advice had called for the national-security implications to be spelled out in “concrete, objective, and transparent criteria.” Cabinet said no.
Instead, the September 2009 regulations granted whichever minister happened to be in charge of the industry and investment portfolio the discretion to decide for himself whether a “national security” threat was present in a bag of foreign money, on a bag by bag and case by case basis. Even private investment dealers have been flummoxed by it all. Cabinet pledges to clarify things have also gone by the wayside.
The upshot was that Canada’s foreign investment criteria ended up failing to explain what “national security” means, or to make regulatory distinction between ordinary private investors like, say, upstart roughnecks from Utah, and, say, entities like Sinopec, a secretive Chinese state-owned enterprise that answers to the Communist Party Central Committee in Beijing.
For the rest of this article, please go to the Ottawa Citizen website: http://www.ottawacitizen.com/opinion/columnists/Canada+doesn+know+protect+interests/6102877/story.html