What is the Harper government’s policy on foreign investment?

Tony Clement’s decision on Potash Corp. looks to have been improvised

Industry Minister Tony Clement’s decision to block Australian mining giant BHP Billiton’s $38.6 billion bid for Saskatchewan’s Potash Corp. leaves a policy vacuum that Prime Minister Stephen Harper must soon fill.

Right or wrong, Clement’s move looks to have been improvised in the face of intense political pressure. He stressed that it was his call alone, and not based on a recommendation from his departmental officials after they scrutinized the deal’s terms.

So, if it wasn’t strictly a technical decision, according to what calculus was Clement “not satisfied that the proposed transaction is likely to be of net benefit to Canada”? He says he’ll explain himself later, after BHP is given the 30 days it’s allowed under the foreign investment law to try to somehow salvage the deal.

When it finally comes, any narrow explanation of this decision won’t be good enough. The Potash deal wasn’t in any obvious way much different from the foreign takeovers that the federal government approved in the cases of Alcan, Inco, Falconbridge and Stelco.

Based on whatever reasoning Clement used in the Potash case, then, should all those earlier acquisitions have been blocked, too? This is a serious economic policy question.

Investors have every reason to be confused, given Harper’s stance in favour of more openness to foreign takeovers during the 2008 election campaign, and the supposed influence on his policy of the Red Wilson panel, which basically dismissed fears that corporate Canada was being “hollowed out.”

The Potash decision makes it look as though the government takes those misgivings about foreigners scooping up iconic companies seriously, after all. In what circumstances do we need Canadian ownership? Only when the political outcry is really loud?




Browse

What is the Harper government’s policy on foreign investment?

  1. Did anyone ever think that "net benefit " would be a transparent and easily understood concept?

    • Actually, it is.

      • Well in that case, please explain it for we simple folk, Emily.

        • •The effect of the takeover on employment.
          •Technology development.
          •Productivity.
          •Competition.
          •The effect on national policies.
          "An investment will be determined to be of net benefit when the aggregate net effect is positive, regardless of its extent," says one guideline from Industry Canada.

          • All of which can be spun various ways.

            For example in this case you could argue that bhp was likely to enhance employment by increasing efficiencies and adding value through investment and expansion.

            On the other hand, you could argue that the effect would be a net loss, since headquarters jobs could not be guaranteed in the long run. See what I mean?

          • No, they use figures.

          • Sigh.

          • See…that's why knowledge is important…and not just to 'elitists'.

          • Numbers don't lie. But they don't tell the truth either. For example: 1.0895%. This is a meaningless figure unless I tell you what it actually means, and how I obtained it. It is the person (or persons) collecting and recording the data, and their interpretation of said data, that determines the value (or lack thereof) of the data. Either way, your comments reveal a limited understanding of the concept of 'interpretation'.

          • That's funny. I got 1.0985%…

          • Your inversion parameters may have been skewed.

          • Probably got them from a non-weighted, voluntary survey,

            Snerk.

    • I think the concept is easy, the underlying research and calcuations difficult and unsure.

      • True – but as Clement is clearly distancing himself from his own staff, it seems likely that Clement didn't do the math – or rather, the math that he DID do was "number of voters gained by rejecting" divided by "number lost by accepting bid", rather than following the formula set by his dept.

        • Give Clement credit, Keith. He would have subtracted there, not divided

        • I think the number 13 figured heavily in his(?) calculation.

    • The whole purpose of sensible government policy regarding "net benefit" with respect to government intervention in the economy is to make it extremely transparent and easily understood so that investors aren't faced with uncertainty. Harper Consrvatives have now accomplished the opposite.

      • I thought that the whole purpose was to ensure that there is a net benefit to any transaction.

        Are you saying certainty and transparency are more important than ensuring a net benefit?

        I'm all for transparency and predictability, but it seems to me that it would be difficult to construct a net benefit test without injecting some subjectivity and risk.

  2. It depends….what day is it?

  3. i>So, if it wasn't strictly a technical decision, according to what calculus was Clement “not satisfied that the proposed transaction is likely to be of net benefit to Canada”?

    Strategic…Strategic…Strategic…Strategic…Strategic…Kumbaya…Strategic…Strategic…Strategic…Strategic…pass the salt…Strategic…Strategic…Strategic…

    • It only takes one person to make/change CON and its government policy. Harper looked out of his hidey hole, saw a big Roughriders' angry shadow, and turtled for another month…

  4. "Based on whatever reasoning Clement used in the Potash case, then, should all those earlier acquisitions have been blocked, too? This is a serious economic policy question."

    A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.

  5. What in the hell do you guys want? For days we have seen comments on this board suggesting that if Clement approves the deal he is an idiot. We have seen editorials, columns etc. etc expounding the virtues of the Potash industry to the welfare of Canada blah, blah,
    Now they make the decision most people wanted them to make and suddenly the explanation or lack of explanation is not good enough. Some of you people make me sick.
    The fact is none of these decisions are cookie cutter. They all come with serious economic and political consequences.

    • This is not about you, hollinm. Do try not to take everything personally.

      • No but it sure is aggravating watching the comments coming from some of the posters on this blog. There is no attempt to be fair or unbiased. I guess that is too much to ask.

        • Yeah…and when have Cons ever been fair or unbiased eh?

          What comes around goes around, hollinm.

          • And Emily, you don't see why you are sinking your own boat with that kind of comment? You can't decry somehting in one breath and employ it with the next and hope to have any credibility.

          • What on Earth has ever given you the impression that Emily is interested in having credibility?!?!?!

          • I suppose you are right; my own confirmation bias at work I guess.

    • I don't know if the story was necessarily critical, it merely pointed out that the Harper government will have to straighten a few things out… these decisions aren't cookie cutter, to be sure, but prospective investors would probably appreciate knowing what the basic ground rules are. At least, that's how I read it. Further, it would have been the biggest foreign takeover in the world this year if it had been allowed to go through… I don't think it's unfair to ask the government to eventually explain its rationale for such an important decision, do you?

      • You last sentence is the operative sentence "the government to eventually explain…"

        However, that is not what the partisans on this board are doing. They want an explanation today or else Clement is an idiot in their eyes. The fact is under the law BHP has 30 days to appeal the ruling before a final decision is issed.

        • There is no law and no ruling. It's simply a ministerial decision….which, under Harper, can be changed at the drop of a hat.

          • Then you should speak to Greg Weston. He said it was part of the Act.

        • Maybe. Clement's stock with me was rock bottom after the census. This decision actually bumped him up a tick or two. But I'm patient, I can wait.

          • I don't know why people have to resort to name calling. Clement is a Minister and his decisions are government policy. Harper and the cabinet discuss these things and make the decision on behalf of the government. He does nothing in isolation and everybody knows that.
            To resort to name calling only demeans those who are doing the name calling. The issue is what should be discussed rather than personal attacks.
            We should be raising the level of discourse on this board. I am guilty like everybody else when it comes to this aspect.

          • I'm afraid I don't see any name calling in the post you commented on.

          • He's being prescient. "Tony Clement is an idiot." So there.

            Seriously, though, Tony DOES have a serious credibility deficit, so when he seemingly admits he's going against the advice of the professonals in his department and does not offer immediately a clear explanation as to why, then the obvious assumption is that he's making it up as he goes.

          • Heh, do I detect a little extra distaste for Clement in your comment? Perhaps because you, like me, hail from the place that gave The Steamboat his political start? :)

          • You got it! Thought we were done with him when we tossed him & the Harrisites. For those wondering what Richard & I are talking about:

            Thanks to Tony's P3 plan for our hospital, we have fewer beds at a much higher cost than we would have had under a traditional model. Despite plenty of evidence to the contrary, he insisted the P3 model would be far cheaper. Putting his ideology ahead of the evidence has cost Brampton and Ontario millions more than was necessary. There are other stories, but this is the one that rankled most.

          • So you are saying that Tony was lying when he told us that this was his decision and his decision alone?

        • There's no 'or else'.

          Clement already is what he is.

        • Actually, Clement is an idiot regardless of what his explanation is. His low IQ has very little to do with what his boss tells him to say.

    • "Are you slow, or just a partisan hack?"

      The deal should have been approved weeks, if not months ago. What I object to is a federal government that spouts principles out of one side of their face, contradictory, self-serving political crap out of the other side and total bull—- out of their a–.

      The master strategists have taken a relatively straightforward economic decision and chosen to play politics with it. They find it nearly impossible to do the right thing for the right reasons.

      • The 'right reason' is getting re-elected.

    • Not guilty, Your Honour. You will not see a single comment from me that Clement would be an idiot to approve the deal.

      As for editorials, lessee:
      Potash Corp. must stay in Canada's hands The Toronto Star. Big surprise. That's one.
      Ottawa should allow potash deal The Montreal Gazette.
      Anti-potash coalition undermines investment The Globe & Mail.
      Potash Corp. no sacred cow Nick Van Praet, Financial Post.
      No potash protectionism The National Post.
      But it can hardly invoke that (national security à la MDA) in the potash case. Nor can it say Canada can't allow such a vital resource, one which grows half the world's food supply, to fall into foreign hands, when it is already in foreign hands… L. Ian MacDonald, the Toronto Sun.

      Well, that doesn't look so good for you, there, my friend. Maybe the fury came from a more local source, insisting on government meddling in a private business.
      Province should keep hands off any potash deal The Star-Phoenix.

      Oh.

      • Maybe hollinm only reads the Star.

        It's possible that he doesn't realize that almost ever other editorial and opinion writer in the country thinks that sinking this deal is a bad idea because he's too comfortably ensconced in his elitist, Toronto, latte-sipping, media-elite snuggy.

  6. So has Harper got principles, or is he just populist?

    • You need to ask?

      • Rhetorical question.

        • Principles? Yes? Concrete ones? Let the record say no.
          He could and should have let the markets decide whether or not the deal was even going to go ahead before deciding on vetoing it.

  7. This is the largest takeover bid in Canadian history. Sometimes exceptions need to be made. It's not like foreign investors are going to be spooked because the federal government blocked two transactions out of hundreds in the last decade.

    • Well we sold out the oil and the auto business years ago, so why should potash be any different?

    • How so? In real dollars (not nominal)? Have you corrected for Canadian ownership of Potash (49%)? What about Canadian ownership share of BHP – needs to be backed out?

      It's like saying the CPC accumulated the biggest deficit in Can history last yr, but not in inflation adjusted $, nor as % of GDP.

      • No, Dot, I haven't adjusted for inflation, nor have I factored in the miniscule percentage of BHP that is owned by Canadians. I'm just going by what has been widely reported.

        • I'm just going by what has been widely reported.

          And there was your mistake. Widely reported and "factual" are very seldom the same thing.

    • Yes they are, CR.

      Whether the decision was right or wrong, good or bad, it has an impact on the market.

      Big deals are very expensive to put together. Beautiful millions and millions and millions into the hands of us lawyers and accountants and investment bankers. Huge drain of focus and internal allocation of resources and time. In a time when few deals are happening and some markets are just showing hints of opening up.

      A deal that, on its technical merits, should have gone through and was even approved by the ones who do this for a living.

      But politics intervened. And the worse thing is that on its face it was clearly a decision about saving Conservative seats.

      The Conservative government has blocked two transactions in the last few years. Uncertainty is the biggest deal killer and Harper just added political uncertainty to market and economic uncertainty.

      • Big deals are very expensive to put together. Beautiful millions and millions and millions into the hands of us lawyers and accountants and investment bankers.

        Cry me a freakin' river. Sometimes deals don't work out. I'm not going to shed any tears for BHP's deal team if they walk away empty-handed. However many millions BHP spent on lawyers and investment bankers, the deal costs are relatively miniscule given what's at stake–this is a forty billion dollar transaction, after all.

        But politics intervened.

        It's ironic that you say this, because you're active within the Liberal party and the Liberals were trying their best to kill this deal. I guess the government is perpetually damned if they do, damned if they don't in your books.

        Uncertainty is the biggest deal killer and Harper just added political uncertainty to market and economic uncertainty.

        If it gets blocked, that's two transactions out of what? 1600? Canada probably has one of the cleanest records in the world when it comes to nonintervention in foreign takeovers.

        Also, I'm pretty sure that if Canadian investors were trying to buy out BHP, the Australian government—which is routinely accused of being beholden to mining interests–would seriously consider blocking the transaction.

        • 1. Cost of Deals: I'm glad you don't care about companies wasting millions and millions of dollars because of political interference. Not very conservative of you, but seeing as we are reversing political philosophies on this one…

          Really though, you are missing the point about the millions. The economy is not recovered yet. The cost of even thinking about these deals is enormous. Now we've added a high degree of political uncertainty into the mix, certainly in telecom and resources.

          2. Politics intervening. I'm pretty consistent when it comes to rights, economic and fiscal (and foreign investment) issues and tend slightly to the more libertarian side. I usually don't think about what the Liberals think before forming my opinion. But I guess the government is perpetually loved if they do, loved if they don't in your books.

          3. Blocking. It's 2 transactions by this government in the last few years. Canada now has one of the worst records of free market western economies. It takes one to frighten off investors in this environment. And this is worse because it was crystal clear that the political factor was crass saving of their own electoral seats. Nothing more.

          • I usually don't think about what the Liberals think before forming my opinion

            See, and this is what makes you different from the current government. They ALWAYS think about what the Liberals think before forming their opinions, and shockingly frequently they end up doing whatever they think the Liberals would do.

          • And their "conservative" sycophants even cheer them on, thinking that "disarming the opposition" is in fact the primary purpose of government.

            Sigh.

          • Ted, I think the worries about "political uncertainty" are greatly exaggerated. Foreign investors know that Canada is very open to investment, having blocked only two deals in two decades, both in exceptional circumstances. Had the potash deal gone through it would have been the largest takeover in the world this year, as well as the largest takeover in Canadian history. I highly doubt foreign investors contemplating smaller transactions are going to be worried.

            Canada now has one of the worst records of free market western economies. It takes one to frighten off investors in this environment.

            This is ridiculous. Canada still has one of the very best records of free market western economies. We're practically a boy scout when it comes to allowing foreign companies (mostly from countries far more protectionist than ours) to buy our iconic companies.

            Aside from political junkies, nobody cares about the "political factors". None of the opposition parties wanted the deal to go through. If you think the "net benefit" test or the Investment Act should be changed, fine. Blocking this transaction on that basis was fully within the purview of existing legislation.

          • "Aside from political junkies, nobody cares about the "political factors"."

            CR, I know for a fact you are not being disenguous, and I can't remember what kind of work you do, so I have to think you are just a little naive on this.

            I can tell you that where I work – where international m&a is our bread and butter – and on the street here at King and Bay – where most companies come for investment bankers, lawyers and accountants to do those big m&a deals, this is all everyone is talking about today. Already before this decision, the controversy was the subject of discussion at conferences here and in the US. And people are pissed or puzzled or both.

            It's absolutely not just political junkies that care about this. This is exactly the reason the people I deal with at work don't like politicians: They act like politicians and put short term political gain above economic growth time and time again.
            [cont]

          • Canada has taken a big step back with this decision. It's not the end of foreign investment, to be sure. But the market is so jittery right now, deals so expensive in terms of internal cost, external cost and time, and there is so little money flowing, that this will definitely have a significant adverse impact on foreign investment in Canada.

            Not just because of the decision itself. Investors are smart enough to realize context, but they also realize that this isn't "only 2 in thousands" but three or four deals/projects Stephen Harper has used federal powers to block in the last two years, that we even know about. But far worse, I think, is that this is so obviously and directly a political decision to protect 13 Conservative MPs from getting re-elected. The market has read all about the fact that the civil service, the ones with experience in this, had approved the transaction as being of net benefit to Canada.

            Advisors of all sorts know have to say (to protect themselves as well as their clients) that they don't know whether some proposed deal will go through or face similar political interference: Some industries, you'll have more confidence; Other industries, you'll have no confidence.

          • Just found this: http://www.stephentaylor.ca/2010/11/infertile-gro….

            Certainly Taylor is a strong conservative political junkie. And, ardent stauch died in the wool conservatie that he is, he is clearly very disturbed and upset by this.

            But he also mentions this: http://online.wsj.com/article/SB20001424052748703

            Is the Wall Street Journal a mere political junkie? Are they showing they don't care when they put this story on the front page of their newspaper?

          • You're beating up a straw man, Ted.

            I meant that only political junkies are looking at this deal through the lens of party politics, as you did when you wrote: "And the worse thing is that on its face it was clearly a decision about saving Conservative seats." Foreign investors don't care about Canada's domestic partisan politics.

            Obviously the WSJ and Bay Street and the global markets are going to notice. This would have been the largest takeover in the world in 2010.

          • You are completely missing my point.

            Investors are fully aware of political issues. And they try to address these as much as they can. Most "political" issues are predictable – the regulatory sensitivity of OSFI, First Nations, impact on pensioners kicking up a fuss, local employment – with these political issues there is someone directly affected by the transaction and the government stepping in to protect them. These are predictable and addressable with concessions and undertakings.

            They don't care about domestic partisan politics and that is not what they/we see in this. Here the affected party the government is trying to protect is itself.

            What they see is direct arbitrary political interference for electoral gain. There is no way to predict this kind of brazen interference. That is what adds so much to the uncertainty and why they are talking about this decision on the front page of the Wall Street Journal, on MSNBC, and all over the business world today.

          • What they see is direct arbitrary political interference for electoral gain.

            What they see is the Canadian government rejecting a massive forty billion dollar takeover bid based on failure to meet a "net benefit" requirement, signalling domestic concerns over the protection of national assets and control of natural resources.

            They also see that Canada is a free trade champion, and that this decision is an incredibly rare exception.

            Given the magnitude of the deal, the fact that it involves a huge chunk of the world's supply of a vital resource, and significant public opposition to the takeover, I don't think too many investors think there's something "arbitrary" about it, as though the government of the day rejected it on a whim.

          • I don't know what you are basing your opinion on when you say how investors are seeing this. I'm talking with them. Reading in the WSJ and elsewhere and watching on TV. No one thinks this decision had anything to do with "net benefit" or protecting a national asset. They see it more or less as Harper said he saw it a week ago: a foreign owned company is being taken over by another foreign company, so what is the big deal.

            The arbitrariness of this comes from the fact it was approved by civil servants, passed all net benefit tests, but because the government risked losing seats, they voted it down. That is worse than deciding on a whim.

        • As I just read elsewhere, of course, this is the third takeover that Harper has blocked in the last two years if you want to add the Taseko Mines deal that BC wanted and Harper blocked (for environmental reasons).

          • And protecting Air Canada by not negoating new routes for UAE airlines. I always thought he was pro Open
            Skies.

        • Blocking UAE from negotiating routes.

          Pressuring Craigslist to drop certain types of listings (namely, relationship ads).

          Free market champions, they are not.

          • Oh, please this is truly pathetic, we know you hate Harper with all of your being, but honestly , do you think that all of sudden we are going to have this collective epiphany and think that the Liberals are what we need! Well, it isn't going to happen, Igniateff is sinking the ship so fast and so bad, that you should be more concerned how to fix that mess, you want change get a better leader!

          • Sorry, but this has nothing to do with the Liberals or even with hating Harper. (As for sinking fast, normally the process of sinking involves going in a direction down, not slowly up.)

            I completely reject the view taken by Harper sycophants that those who don't have a knee jerk support for all things Harper are not allowed to say anything bad about Harper. Or to criticize any of his many dumb decisions. Or to expect decent governance, let alone good governance. Or to expect accountability. Or something remotely resembling fiscal prudence with our tax dollars.

            As much as you and Harper may not like it, we live in a free world and a democracy. Deal with it.

          • Well, I am glad that you can see the glass half full when it comes to Ignatieff and his sinking ship!

            I am all for democracy, so feel free to hate Harper and blame him for the end of the world as we know it!

          • Well I don't blame Harper for the end of hte world as we know it. Just for his many many many dumb decisions and broken promises.

            You see, I try to live in the real world, the one where going from 25/26% to 33/35% is considered rising and not "sinking fast".

          • ; )

          • Leader-hating-with-all-their-being-er, heal thyself!

          • Not playing ball with the UAE (swapping favours in exchange for preferential treatment for UAE's airline) is an example of not being a "free market champion"? What a joke.

            The Craigslist example is also incredibly weak. It's an example of common-sense government regulation.

          • Did the UAE's airline want "special treatment" or did they want the same treatment that they give to Air Canada?

    • Must say I'm with Ted on this one. There is more than enough uncertainty in western economies these days without having the much vaunted strongest economy in the G20 playing pure political games with business deals.

      • Canada is not the strongest economy in the G20…not by a long shot.

        • Then why not enlighten us instead of always throwing eggs at political opponents?

        • Yeah, I know, s/b G8.

          • Yes, old worn-out economies.

  8. "The Potash deal wasn't in any obvious way much different from the foreign takeovers that the federal government approved in the cases of Alcan, Inco, Falconbridge and Stelco."

    Call it the "Whiny West" exemption.

    As I understand it, Wall didn't want the new owners to break the cartel that helps keep up prices and fatten Sask's budget. So two right leaning governments just agreed to block investment to maintain anti-competitive practices that make one of them them money from a socialist source.

    CONSERVATISM!

    • What Wall really didn't want was people in Saskatchewan noting that he was a back room boy for the government that originally privatized potash.

      The whole Conservative reaction to this is politics. Wall was afraid of getting whupped in the next provincial election. Harper was afraid of getting whupped in the next federal election. Time will tell how successful Harper and Wall have been with their tactics, but the reality is that they've admitted the traditional NDP position was more representative of the people of Saskatchewan.

    • Who cares whether its political or not – Canada wins in the net total for as long as this decision lasts —
      at 49% Canadian owned at present that means 49% of the profit comes to Canadians plus ALL other benifits instead of NON of the profit and few of the other benifits.

  9. Not to be forgotten in all the commotion: This is another stunning victory for Kory Teneycke!

  10. My guess is that the same people who now bemoan a political decision by the Harper government would have mocked an "ideological" one had they gone the opposite way. It's like they're mad that he didn't leave his opponents a political opening.

    This is pure politics, just as it has been for the Liberals and the NDP. The only people I heard arguing for principle all along were over at the National Post, and they're still sticking to their guns. They can afford to. They don't have any votes to buy.

    • S'good thing, because they can't afford any.

    • How is this pure politics for the NDP? It merely confirms what they've been saying all along. They are the only political party to stand on principle throughout this whole thing.

    • Can you please tell me how many private sector deals the Liberals blocked?

    • Tony has zero credibility, so unless he makes his announcement with full disclosure as to how he reached his decision and has all his senior bureaucrats lined up behind him smiling and nodding agreement, then you're right – I, for one, would have opposed his stance whichever side he took. Where Tony is concerned, I need hard facts – and lots of 'em. Otherwise, if his lips move I assume he's lying.

  11. I reckon this speech by Premier Wall put the cat among the proverbial pigeons. In any case, the consensus is that the BHP bid would have way undervalued Potash Corp. At the very least they don't want to be accused of allowing a very bad deal.

    • If current shareholders were willing to sell, then, no, the bid would not have been undervalued.

      But government meddling has now CERTAINLY lowered the value of Canadian resource companies in particular, if not all Canadian companies in general. Who would pay fair market value for an asset whose future sale may be undermined by capricious political whims?

      • Yes, I agree. Hostile takeovers are almost always way over market. Granted, potash insiders might believe that their firm is worth more than its market valuation, but that's a different story.

  12. Tough for the Conservatives to win on this, because they either belie their supposed beliefs, even though there was a lot of opposition from within the investment community to the deal (Jarislowsky etc.)

    Unfortunately the gov’t is so often strategic and or populist and not principled or law-based (pre-recession spending record, accountability, Wind, Kadr etc.) that Prentice isn’t given the benefit of the doubt on his decision.

    Of course, this government also doesn’t give reasons (glow sticks, F35s, $400 billion deals) he’ll be providing one later?, so maybe they rather deserve the pile-on.

    • Sorry for the crappy post. Smartphones suck for typing.

  13. One thing is certain,

    regardless of what Harper decides to do, the hyperpartisan leftists will moan and complain, and suggest the political sky is falling.

    Indeed, that Harper may have done the very thing they said he should do, yesterday,

    has no bearing on their complaining about that very course of action today.

    To today's reactionary left, there is no truth, no reality, no objective good or bad policy, just the opposite of what Harper does today.

    Thus, every policy decision Harper makes…every one… is portrayed as a disaster on this blog.

    Another day, another fallen sky.

    How utterly predictable.

    • Shorter version of chet….Harper is always right no matter what he does.

      • To suggest Harper is not always wrong, is equivalent to saying he's always right?

        Interesting.

        There are some courses you can take to clear up that confusion.

        • I think in this situation Harper was simply screwed.

          You see one thing that Mr. Harper, or at least his supporters, like to put forward is that they're better than the opposition because they govern according to certain conservative (libertarian) principles. In essence, that they stand for something where the opposition stands only for power. Of course, one of the problems with a hardline stance based on an ideology.. in effect, standing for something.. is that life doesn't really care what a person stands for, and on occasion will present one of those ugly corner cases where there is no good solution for your ideology.

          This was one of those cases.

          So I expect part of the schadenfrude we're seeing here is because of the superior airs that Harper supporters tend to put on when they talk about how the CPC is principled.. this case is an excellent example of how those principles are no better than those of any other party.. they disappear when following them might threaten votes.

          It is interesting though how I'm seeing more and more people who supported Harper before are now starting to say, "Yeah, I never really liked him.. I just don't like the other guys either."

          • Correction: ANOTHER excellent example. There have been a couple of federal budgets in recent memory…

          • Choosing politicians is about choosing the lesser of two evils. Always has been. Always will be.

            Occaisionally you'll have one where people actually believe they"re something special, above politics. It's usually short lived, and the believers are invariably crushed. See Obama.

            Right now, Harper's the best we have….by a long shot. That we don't have blinders on that he's some transcendent figure, able to please all and "stop the oceans from rising" is a very good thing, in my opinion.

          • Excuse me, but what supporter of Harper still remaining doesn't have blinders on and would not insist on defending his every move unto the death? I do hope you're not going to suggest yourself as one of those, because I can't recall one critical thing you've ever said regarding this gov't, and plenty of times where you've attempted to defend what is more or less indefensible upon any rational grounds.

            That said, Harper is not the best we have. Nor is Ignatieff, nor Layton, and don't even get me started on May. None of them are the best we have. Given their performances, I'd argue that the best we have currently are probably some of the unknowns in the back benches.

            And the best that run? Who knows.. so long as people keep insisting that they vote on a leader or a party rather than for their individual MP, we'll never find out.

      • I think you are not correct here, Emily.

        I don't think Chet is saying that Harper is always right. At least not in this comment, the totality of his comments clearly indicates he thinks that, but in this comment he is merely saying that no one is allowed to criticize Harper.

        Now the fact that, like with census and prorogation and Rights & Democracy and gun registry etc etc etc, there is a very wide spectrum from all regions and political/economic viewpoints in opposition to Harper on this decision by him doesn't matter to these people.

        All criticism of Harper is illegitimate. Harper is our master and better and entitled to govern free from us nasty little people who don't line up and applaud his every bathroom break.

    • Would that make me a hyperpartisan leftist, kody? I know I dressed up as one to go trick-or-treating on Sunday last (my long-term federal debt forecasts scared the neighbourhood kids very effectively), but we are now getting deeper and deeper into November…

    • "to today's reactionary left, there is no truth, no reality, no objective good or bad policy, just the opposite of what Harper does today"

      So, you're saying that the conservatives have decided that government intervention like this in the free market is objectively good policy? That this actually WASN'T about political expediency, but it's simply that the NDP were objectively correct all along, and Stephen Harper has simply been convinced by the logic and power of their nationalist and interventionist arguments?

      'Cause maybe it's just me, but I'm almost certain that the Harper government is going to go right back to attacking NDP calls for more intervention in the free market, and will simply act as though this particular example of the government doing that is just another instance of the government being FORCED to do something by the dastardly opposition.

  14. They pulled this kind of stunt with the decision overruling the CRTC to allow Globalive to go ahead with foreign ownership , except it went the other way. And telcos were left unsure if they were allowed to get foreign capital influx, or if it was just one.

    Lord knows I don't mind complex systems (I argue about NOT changing the income tax act). But Industry Canada need less arbitrary systems.

  15. From what I've seen, the Harper government (it's interesting that we are all using that term now) doesn't have a policy on foreign investment or anything else. What they have, instead, is a 24/7/365 focus on tactics – on figuring out how to ensure that the Blue Team emerges triumphant over the Red Team and the Orange Team.

    This lack of policy forces them to improvise, as Clement seems to have done here.

    • Sometimes they don't seem to even care if they emerge triumphant so long as the Red Team is hurt.

    • We have to call them the Harper gov't, because conservatives get upset if you use the term, and the CPC includes a lot of folks who really didn't know what the hell they were signing up for. They went and believed what Harper said, rather than examining what he did.

  16. I gotta admit, I'm coming to this story very late and picking up pieces of information as I go along – but it seems to me that if Potash is such a strategic resource then it would've been a smart idea not to privatize the world's biggest supplier.

    That being said, as it stands, I lean towards thinking that nixing the deal was the right move – but then I'm the sort that's generally receptive to arguments for economic nationalism ;)

  17. What a marvelous opportunity for the left as exmplified by MacLeans to whine about Harper on a subject they know absolutely nothing about. The left couldn't exist without double standards and hypocrisy. Why on earth did the province of Sask. privatize this enterprise if they are now wrpping themselves in the flag.

    • It was the Devine government, a very conservative…not to mention incompetent and even criminal…government that privatized potash. Wall worked for Devine as an unelected party hack back then. It was not "the left" who did the privatizing.

      So perhaps it's better for those on the right who know nothing about a subject to whine about those on the left noting that the right is still wrong.

  18. There's a fine line between being consistent and being rigid and I think the Conservatives got it right on this one.

    Just like ideological obstinacy on the census made bad policy, being rigidly "free market" would have ignored too many dimensions of this decision. Listening to Saskatchewan is good small p politics, not just electoral self-preservation.

  19. I think it's pretty clear that Stephen Harper is a deficit loving, foreign investment hating, socialist who will drive this country to the poor house unless this country develops a conservative alternative.

  20. The Conservative policy seems to be to actually enforce the LIberal policy. They gave us the Investment Canada Act and "net benefit" test. The only difference seems to be that the Conservatives use it from time to time.

    • Now try to explain how investors are supposed to determine which "time" Harper Conservatives will use it. It will probably be easier for them to just take their investment funds elsewhere until Harper clears this up.

      • Sure, maybe you could help me out by explaining why the Liberals never used it. I was going to say the Conservatives used it when investments failed the net benefit test. But then, why would all previous foreign investments have passed the test?

  21. I was rather surprised by the decision, I'm no number or economy guy but this seemed like a slam-dunk.

    I understand the opposition to the deal but I really figured the CPC would allow the deal: free market and all.

    Either way Harper would have had a hard time explaining the decision so at least he made the popular one. Can't fault him on that.

  22. "In what circumstances do we need Canadian ownership? Only when the political outcry is really loud?"

    Well I should hope so. The overwhelming majority of the public wanted something, and their government gave it to them. It's called democracy, and it's a breath of fresh air in a generally ornery political atmosphere.

    The pundits, of course, will find any excuse to critique anything that isn't blindly pro-capitalist.

    • I think I could give you a list as long as my arm of things that the overwhelming majority of the public wants and that the Harper government will never give us, all of which would be higher on the public's list of priorities than keeping Potash Corp. Canadian.

      Not that I disagree that the public should generally get what they want, but let's not pretend that this decision was an example of high-minded devotion to the democratic ideal.

  23. This is a yawn in Australia and elsewhere. Scanning their business press there is very little being said about the decision. The BHP stock went up 5% because shareholders expect a share buy-back instead of a mega acquisition. What's not to like?

    • And POT stock is rebounding.

      Agreed, it's win-win-win.

      Now if someone could just break this news gently to the Globe and Mail…

      • In fact M&A law firms in Australia are suggesting that it is the size of deals that are causing national governments everywhere to rethink investment policy. Deals in the 2 to 10 billion range are "no big deal" but larger deals involve huge market shares, national and regional policy etc. Maybe globalization is reaching a ceiling in certain sectors where national policies are being skewered. BHP's plan to use its US ports could throw the northern BC gateway into disarray for oil, gas etc. There are a lot of interconnections when the deal is relatively large.

  24. 1. Political Junkies:It's absolutely not just political junkies that care about this.

    See my comment below. They don't care about party politics. They care about politicians acting arbitrary and in their own interest.

    2. Economic Growth:
    Absolutely the financial world thinks this decision will impact economic growth. If deals like this are subject to selfish and arbitrary political decision-making, i.e. their “net benefit” to a political party instead of their “net benefit” to Canada, then companies will choose not to invest here. That definitely will have an impact. How big? It won't be devastating, especially in the long run, but it will definitely hurt.

  25. 3. Number of Deals Blocked: I only meant that the government has many powers to block a free market. Only very rarely does it come to a formal decision like with telecom, potash and mining in the last two years. I've seen lots of deals die – under lots of different federal and provincial governments – because the civil servants come back and tell us there was no way the Minister was going to approve. So they decide to cut their losses.

    Not three out of 1,600. That is Conservative spin and the market see right through that. 3 (one being an environmental denial this week, just to be clear) in 2 years during recessionary times when there is lots of talk in the world about increased protectionism and very jittery markets already. The fact that Inco and Alcan went through without difficulty only adds to the uncertainty and the sense of an arbitrary decision; it doesn't lessen it.

    ”The market also knows that the civil service has never not approved a foreign transaction.”

    Completely wrong on that front. Sorry.

  26. I expect the Tory spin on this to quickly move from "we did this because it was the right thing to do" to "we only did that because the opposition parties FORCED us to" pretty quick.

    It's like with the stimulus spending. When the cheques were rolling out the door, Tories were lining up around the block to get their pictures taken. Now that talk has turn to the deficit, suddenly all you hear from Tories is how they'd have liked to have been more fiscally disciplined, but the darned opposition FORCED THEM to hand out all that money (and pose for all those photos).

    • Have the Tories been saying that? I haven't heard much of that. Mostly they're still crowing about "saving" the economy.

  27. For me it's the first time i've been able to agree on an important decision made by this government. We've allowed large foriegn corporations to rape this country of it's raw resourses for too long, if they want the raw materials they should have to process them in CANADA. These jobs need to be kept in country.

  28. BHP Billiton said previous that they where going to built a NEW mine , I invite with many more canadians I am sure

    COME AND DO THAT F>E<

  29. I doubt this one decision will have the chilling effect on foreign investment that some doomsayers are predicting. Not right away, anyway. What it does do is embolden what was until recently a very dormant, defeated protectionist movement. For a long time, the protectionist, economic nationalist crowd has been completely cowed and beaten into submission. They were laughed at and derided by most serious commentators, and completely ignored by politicians. By the mid-1990s, Maude Barlowe and Mel Hurtig were complaining that they couldn't even get an article published in any major newspaper. TV journalists stopped giving them interviews. They and their ilk were ignored and irrelevant.

    Then Danny Williams roared onto the scene a few years ago, and suddenly the protectionists and nationalists had a champion. It seemed that the changes would be isolated to Newfoundland at first. But just weeks ago, New Brunswick elected a Williams Lite as their premier. At the same time, an allegedly "right wing" western premier, astoundingly, adopts Danny Williams tactics to block the BHP bid. Suddenly, the economic nationalists have what looks like critical mass. It is precisely this type of political climate that allowed Trudeau to ravage the Canadian economy with FIRA and the NEP. It is precisely this type of political climate that allowed various federal and provincial governments of the 1960s and 1970s to sink billions into Crown corporation money pits.

    And that's where the decision to block this takeover is going to do its damage. It won't change what foreign investors think of us. Not over night. But it will, it has, emboldened the economic nationalists. After 30 years of well-deserved isolation and ridicule, they've been given their first real victory. They are once again a political force in this country. If Harper thinks he's contained the problem by appeasing them just this once, he'll quickly find out otherwise.

Sign in to comment.