Not really explaining Nexen or the F-35s: Politics on TV

Paradis and Mulcair on Nexen, while Chris Alexander assures Canadians the F-35 numbers are no big deal

Nexen Inc. logo at the company's annual meeting in Calgary, Wednesday, April 25, 2012. The Harper government is buying itself some more time to deal with a political hot potato. It is extending its review of the controversial $15.1-billion bid by a Chinese state-owned company to acquire Calgary-based oil and gas producer Nexen Inc (TSX:NXY).THE CANADIAN PRESS/Jeff McIntosh

Message of the day

“We still don’t know what the definition of net benefit is.”

Hot Topics

  1. The Nexen decision
  2. The ongoing F-35 debate
  3. Jason Kenney on the Stanstead border

Questions not answered

  • What were the conditions that CNOOC agreed to in order to purchase Nexen?

The Nexen decision:

Question Period had an interview with Industry Minister Christian Paradis, who said that with this decision there were significant undertakings in disclosure, commercial orientation, keeping their Canadian headquarters and management team, listing on the TSX, and reporting to Industry Canada. Paradis said that because of commercial sensitivities, he wasn’t allowed to say more, but they have now sent a clear message to the markets about state-owned enterprises going forward. Paradis added that another consideration was that this deal didn’t change the structure the of oil sands industry.

The West Block had an interview with NDP leader Thomas Mulcair, who said that we still don’t know what the foreign investment rules are two years after promises of clarity from the government, nor do we know how these two takeovers are of net benefit under the current law. Mulcair said that the deal is only of benefit to the shareholders among Harper’s oil patch friends (never mind that the Canada Pension Plan owns a huge chunk of shares in both Nexen and Progress Energy). Mulcair added that there remains no definition of a “strategic asset” post-Potash refusal, and now there is no “exceptional circumstances” definition to go along with it.

Kevin Newman spoke with University of Alberta professor Wenren Jiang from Beijing, who said that there has been limited response in China because it is the weekend, but there is a sense of optimism now that the deal has gone through. Jiang said that the Chinese do have questions as to why Harper has drawn the line around future state-owned enterprises, and that China feels they did Canada a favour by giving a 60 per cent premium on the Nexen shares, and because they followed the rules, it is a win-win in their eyes.

Newman also spoke with a trio of experts, including Brian Crowley from the Macdonald Laurier Institute, Alex Neve of Amnesty International, and business executive Tom D’Aquino. Crowley said that there are clear concerns about the national security concerns by allowing China to control the ownership of resource production and intellectual property of pipelines. Neve said that they are disappointed from a human rights perspective, as both CNOOC and China have poor human rights records and they have taken over a company with a good record, while the new guidelines have no mention of rights. D’Aquino said that while Canada still seems fairly pro-China, and that the Harper government got it right with the new markers around state-owned enterprises.

On CTV QP’s The Scrum, Craig Oliver said that the final decision on whether these takeovers were a good thing will come down to whether the Chinese and Malaysians are good corporate citizens. Tonda MacCharles said that the marker that Harper put around state-owned companies has enough ambiguity to allow for countries like Norway to still invest. John Ivison said that the these new rules for state-owned companies are likely a bargaining chip for free trade talks with China going forward. Gloria Galloway said that the ambiguity in the decision could be a problem for other investment going forward.

The F-35s:

Question Period had an MP panel of Chris Alexander, Jack Harris, and John McKay on the upcoming report on the all-in costs of the F-35 fighter jets. Alexander insisted that there was no deliberate attempt to undersell the costs, and that the price changes as the developmental assumptions change. He also said that the original numbers didn’t include annual operating costs, which the new ones do. Harris wondered how there were announcements on the purchase years ago when Alexander insisted that there would be no decision without the final, verified numbers. McKay said that the government’s numbers have gone from $15 billion to $45 billion, which is a catastrophic failure of oversight, especially because the government ridiculed everyone who turned out to be right, and they don’t have the decency to apologize.

On The West Block, Mulcair said that the government has been using a half-lie about no money being spent on acquisition, and that the $700 million spent on the development process is enough to lift every senior in this country out of poverty. He added that while the Conservatives talk a good game about public administration, they have been abysmal failures, and that Canada needs to look at other options, but be transparent about statement of requirements.

Tom Clark spoke with former defence procurement Assistant Deputy Minister Alan Williams, who said that the F-35 may still be the right plane for Canada, but sole-sourcing the deal before we had a final price tag was the wrong move. He said that the government can’t be surprised by the KPMG figures because all of the numbers are coming from the same place, and that in the Statement of Requirements, stealth should be treated as a rated feature, meaning it’s a “nice to have” with a sliding scale rather than a pass/fail. He also added that the new panel of observers is a red herring without a proper SoR.

As a web exclusive, The West Block has a Baker-Lee debate, where Professor Ian Lee said that the government’s brand isn’t too badly damaged, but said that the billion-dollar-a-year price tag for an air force is a bargain when you consider the size of our country. Senator George Baker reiterated how the government’s messaging about how the F-35 was the only plane has blown up in their face, and said that the government should examine the proposal for the re-vitalization of the Avro Arrow.

When CTV QP’s The Scrum weighted in, Oliver noted that the government has been poor salesmen for the F-35s, and that at the end of the new process, it will likely be the F-35s who win. Galloway said that she remains confused about why this plane has been costed out over 42 years, where other projects haven’t been costed over the same period. MacCharles said that the government’s decision to sole-source the F-35s the first time around hits hard against their reputation as good fiscal managers. Ivison said that when we get the bill for the other options, they will likely all be around the same number.

Jason Kenney:

Immigration Minister Jason Kenney was on The West Block to talk about the 282 people who have illegally crossed through the border at Stanstead, Quebec, where many subsequently made refugee claims. Of the 85 arrivals that have been designated “irregular” under the new refugee rules, 40 have been detained so far, and many of them were also involved in organized “distraction thefts” in Toronto. Kenney added that we don’t want to build fences around the border, and that Stanstead is a 19th century town that cuts right through the border, which is why they are adding front line officers and creating disincentives to human smugglers targeting Canada.

Worth Noting:

  • Caroline Mulroney Lapham, daughter for the former Prime Minister, is running a charity called the Shoebox Project for women living in shelters in six cities.



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Not really explaining Nexen or the F-35s: Politics on TV

  1. I really like the idea of revamping the arrow, maybe there is room for than just one type of fighter in the RCAF?

    • Neither the F-35 nor any of the alternatives will address the evolution of Air superiority post 2020, let alone the Arrow. That’s history.

  2. Anyone with Harper’s bean-counter mentality would see a takeover of any ailing Canadian enterprise with performance back to robust economic health to be ‘exceptional circumstances’. In other words, the view that China’s deep pockets and economies of scale and a track record of turnarounds would make the amoral amorphous, largely anonymous blobs that run Beijing’s politburo entitle them to a sort of super-duper Bain capital corporation flipper status is all that is needed to let them pick low-hanging fruit anywhere and everywhere in Canada.

    But ailing and failing companies are a natural consequence of a free-market economy, so there will always be more fruit for Beijing to pick. The sad thing is the Trudeau can’t wait to outdo Harper as Western satrap of Beijing’s newly developing colony.

  3. Crowley … D’Aquino … a loose definition of “expert”.

  4. I pity that guy’s students…sock puppet professor…

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