Harper's big announcement: Politics on TV, Dec. 7 edition

Featuring reaction as it happened to Harper's announcement on the Nexen and Petronas deals, plus discussion on the F-35 cost revelations

Message of the day

“These decisions are not the beginning of a trend, but the end of a trend.”

Hot Topics

  1. The CNOOC-Nexen and Petronas decisions
  2. The F-35 firestorm

Questions not answered

  • What are the details of these takeovers that made them acceptable?

The CNOOC-Nexen and Petronas decisions:

Power & Politics first spoke with CBC’s Terry Milewski about the decision to approve both the CNOOC and Petronas decisions, and that the new guidelines will be much tougher for state-owned enterprises. Hannah Thibedeau then got reaction from Peter Julian and John McCallum, where Julian said it was “sad” that the government rubber-stamped a decision that is not in Canada’s best interests. McCallum said that it was a good decision on its face but the details need to be clarified, and that clarification on “net benefit” rules will help to eliminate confusion going forward. Oddly enough, McCallum seemed to claim that Harper was following Justin Trudeau’s lead on the file.

Power Play got analysis on the decision from Toronto lawyer Lawrence Herman and law professor Debra Steger. Herman said that it could not be underscored that the announcement was made by Harper himself, which signalled its importance. Herman said that the rules are general and opaque, and that is one of the problems on the file. Steger said that both the net benefit and national security tests are opaque, and that there have been five Chinese state-owned enterprises have made investments in the oil sands over the past three years without fanfare, but none were of this size.

Both shows then cut to Harper’s press conference, where he said that these decisions “are not the beginning of a trend, but the end of a trend,” and that Canadians didn’t spend years reducing government control of sectors of the economy only for foreign governments to assume control of them. Harper declared that going forward, development of the oil sands by state-owned enterprises will not be in the net benefit of Canada.

Power & Politics got analysis from interim Liberal leader Bob Rae, who said that we still don’t know the conditions set out for both companies, and that he would wait and see before making a comment, but added that they won’t make any blanket assertions about dealing with all state-owned enterprises or with certain companies. Rae said the difficulty will be in establishing what are the “exceptional circumstances” for SoE investments going forward, and whether we would we treat Norway’s Statoil the same as a Chinese state-owned company.

Thibedeau then spoke with Carleton University professor Ian Lee, who said that the government threaded the needle rather carefully, and that putting up a red light for state-owned enterprises in the future makes CNOOC a stranded asset in Canada, as it won’t be allowed to expand. Lee noted that state-owned enterprises don’t compete with the same level playing field because they have deeper pockets and can’t go bankrupt.

Power Play’s strategists panel gave their thoughts, where Craig Oliver called it a historic decision by making a long-term deal with a country that will soon be the richest in the world, and said that this is a turning point in Canadian economic history. Gerry Nicholls said the government muddied the waters in order to approve the investment while avoiding problems within the Conservative base. Anne McGrath found the messaging odd, and that it was focused on keeping the base placated. Marlene Floyd said they likely had little choice but to approve it, but that going forward the new two-tiered system will require a lot more discussion.

P&P’s Power Panel weighed in, where Greg Weston noted that the net benefit test remains as murky as it was before, calling the broad guidelines “the new vague.” Kady O’Malley found the Prime Minister making the announcement and taking so many questions from reporters to be unusual, and a signal of how important it was. Rob Russo said that Harper was trying to deal with the preoccupation with his caucus and cabinet about what happens when another SoE comes after a bigger player in the field, and that his lengthy press conference was an attempt to get ahead of push-back on the decision. Kelly Cryderman said that it is probably good news for China that the CNOOC was approved, but that the government has to walk a fine line when it comes to encouraging foreign investment.

Wither the F-35s:

Power & Politics had an MP panel of Chris Alexander, Jack Harris and John McKay to discuss the speculation around the future of the F-35 purchase, and to whether or not it’s dead. Alexander dutifully delivered talking points about the secretariat and the seven-point plan, and said not to pay attention to a statement on the procurement process on the National Defence website as Public Works is handling the file. Harris said that the NDP believes the Prime Minister needs to take responsibility for the issue, and that the KPMG report needs to be made public. McKay noted that five years have been lost in the procurement process, that the minister needs to resign, and that a new Statement of Requirements needs to be drawn up.

For more on the F-35 procurement history, CPAC is re-airing their documentary F-35: The Politics of Procurement tonight at 10 pm and Sunday at 10 am, or you can find it on their video-on-demand.

Worth Noting:

  • Kady O’Malley chose Kevin Page as a “Game Changer” of 2012, while Rob Russo chose Lino Zambito for his Charbonneau Commission testimony in Quebec, Greg Weston chose the two omnibus bills, and Kelly Cryderman chose the issue of foreign investment by state actors.
  • Ontario PC education critic Lisa MacLeod said that the education minister has failed in preventing labour unrest with teachers, and that if they allow one single day of strikes, it sets them up for future days of strikes without adequate notice.

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