Harper’s foreign ownership policy is incomprehensible – by David Olive (Toronto Star – December 12, 2012)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Once again I’m dumbfounded that Stephen Harper’s university major was economics. His new policy on foreign ownership, unveiled with fanfare late last week, is as clear as the goo extracted from the dinosaur remains at Fort McMurray.

Harper last Friday rebuked the majority Canadian public opposition to a proposed Chinese government takeover of Calgary oil producer Nexen Inc. with his approval of that $15.1-billion deal, and of a $5.2-billion Malaysian government state grab for Alberta oil and gas assets. In doing so, the PM unveiled a ballyhooed “get tough” stance on future foreign state designs on the Alberta tar sands.

This embarrassment of a policy (the more fawning typists in the financial press have labelled it the “Harper Doctrine”) is rent with loopholes, is incomprehensible, and lacks the clarity to be applied consistently. Harper has conceded as much in allowing that foreign government takeovers in the oilpatch will henceforth be blocked, other than those arising from “exceptional circumstances.”

Gosh sakes, every takeover is “exceptional.” Acquisitions are a blend of price haggling, political stability, interest rates, strategic fit, industrial cycles, CEO egos, and countless arcane factors.

Which makes meaningless Harper’s vow to protect Athabasca heavy oil from foreign government takeovers. Beijing’s appetite even for, say, Suncor Energy Inc., the biggest remaining Canadian-owned player in the Alberta tar sands, might well fit whatever set of exceptional circumstances by which Harper and his cabinet colleagues are swayed, as they were in letting the mid-sized Nexen slip down the Communist Chinese gullet.

If only Harper had led off his doctrine with his proposed giant loophole allowing foreign governments to continue buying minority stakes in iconic Canadian assets. Then we could have turned away and resumed our holiday shopping chores.

Since time immemorial, tycoons have controlled vast enterprises with minority stakes. (See Frank Stronach, the late Ted Rogers, Warren Buffett, the Ford family, the Wal-Mart clan, etc. etc.) Conrad Black manipulated dozens of companies in which he and his “associates” held stakes as low as 14 per cent. Heaven help us that Canada’s CEO appears not to get this.

Who should and does own Canada would make for an engaging and overdue public discussion. It’s our stuff, after all.

Instead, the PM secretly tapped Calgary oil moguls for their views, and recruited a star chamber of like-minded experts including think-tanker Fen Hampson and Tom d’Aquino to personally counsel him on threats from ideologically incorrect state enterprises in the developing world.

For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/business/article/1300761–harper-s-foreign-ownership-policy-is-incomprehensible-olive

 

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