If Alison Redford sounded peeved as she prepared for her third trip to China in as many years, it’s understandable.
Redford’s fortnight in the Far East, which kicked off Sept. 5 and will include visits to Beijing, Shanghai and Hong Kong, marks the Alberta premier’s latest attempt to convince the Chinese that Alberta’s oil patch is open for investment—even though the latest rules from Ottawa would seem to suggest Chinese state-owned companies should stay home.
The federal rules on state-owned investment, announced late last year in the wake of a $15-billion takeover of Calgary-based Nexen by China’s CNOOC Ltd., dictated the government would only approve takeovers in “exceptional” circumstances. At the time, Prime Minister Stephen Harper was concerned about foreign companies controlling what’s supposed to be a free market in Alberta’s oil sands. Alberta and the oil patch asked for more specific details on how the new rules would be applied, but they never came.
As it stands, the rules, which are actually guidelines, take into account the influence new foreign owners will exert on their Canadian acquisitions. But they leave plenty of wiggle room for industry ministers who must ultimately decide whether big takeover deals are allowed. Last year, then-industry minister Christian Paradis approved a pair of billion-dollar takeovers in the oil sands, but emphasized that, despite the net benefit they provided Canada, they were exceptions to the new rules.
Redford doesn’t appreciate that lack of clarity, and wants state-owned companies to hear her message loud and clear. “If the federal government doesn’t choose to be clearer at the moment, we will presume that we can continue to advance that agenda [to attract state-owned enterprises] and we will make that case to the federal government,” she told the Calgary Herald.
If the premier’s bullish tone works in China, those murky federal rules could well be put to the test before too long.
Buyer, and seller, beware.