CBC reports this hour that, “The possibility that Potash Corporation of Saskatchewan could fall into foreign hands is renewing the debate over the potential loss of resource industries in Canada. After Australia-based BHP Billiton announced its $38.6-billion US takeover bid Aug. 17 for the world’s biggest fertilizer company, Maude Barlow, chairperson of the Council of Canadians, demanded Ottawa intervene.”Barlow told CBC News, “This is the wrong way to go. When you hand over all the power over these resources to international investors, be they backed by a large country or just private investors, you lose control, you lose the ability to take care of your local economy, your local environment.”
“The debate over foreign control last peaked in 2007, amid a boom in mergers that saw some of Canada’s biggest companies acquired by outsiders. Rio Tinto took over aluminum producer Alcan, Xstrata absorbed nickel miner Falconbridge and Brazil’s CVRD — now Vale — scooped up Inco. …In May, the Chinese state investment fund formed a partnership with Calgary-based Penn West Energy Trust to develop the firm’s oilsands assets in northern Alberta. State-owned PetroChina has also acquired a stake in two other oilsands projects and Sinopec, a nine per cent interest in oilsands miner Syncrude. In 2009, China’s investment fund also bought a share in Vancouver base metals miner Teck Resources and Wuhan Iron and Steel invested in Consolidated Thompson Iron Mines and its Bloom Lake development in northern Quebec.”
“Ottawa has said any foreign takeover of PotashCorp will get a rigorous review under the rules it introduced in 2009 as concerns grew about foreign takeovers. Then, the government increased the threshold for the value of deals requiring scrutiny, but allowed itself the power to veto deals posing a danger to national security. The Investment Canada Act also required a foreign takeover to provide a ‘net benefit’ to the country. But since 2008, Ottawa has disallowed only one takeover, the sale proposed by Vancouver-based MacDonald Dettwiler and Associates, of its space division, to a U.S. firm.”
UNITED STEELWORKERS: Reuters adds that, “Potash Corp has often laid off workers under a strategy of cutting production when prices fall, and Mike Pulak of United Steelworkers said the union had mixed feelings about the bid. Pulak, who represents workers at three Potash Corp mines in Saskatchewan, said layoffs have built resentment. But workers are also nervous about BHP, considering a bitter labor dispute between global mining giant Vale and workers at nickel mines that Vale acquired when it bought Canada’s Inco. ‘Big companies have big global policies and they can be tough to deal with,’ he said. ‘(Workers) have never been through an acquisition before and don’t understand what it means, especially when it’s the biggest mining company in the world.'”
NATIONAL FARMERS UNION: “Kevin Wipf, executive director of the Saskatoon-based National Farmers Union in Canada was also ambivalent. ‘It’s not changing the level of concentration in the industry, just the ownership,’ he said. “I don’t see any change in the way they behave.'”
THE NEW DEMOCRATS: CJME Radio reports that, “Earlier this week, NDP leader Dwain Lingenfelter said he wants a review done before any deal to buy PotashCorp is completed. His fear is that there could be pressure on the provincial government to lower the potash royalty.” Bloomberg adds that, “The (federal) New Democratic Party, which has historical links to the country’s labor unions, said today they want Prime Minister Stephen Harper’s government to hold public hearings as part of any review process. …Claude Gravelle, the NDP’s spokesman on the issue, said in a separate interview today his party wants the government to set conditions on any BHP takeover, including keeping Potash’s headquarters in Canada and pledges not to cut jobs.”
The CBC report is at http://www.cbc.ca/money/story/2010/08/19/f-potashcorp-foreign-ownership-debate.html. The Reuters report is at http://www.reuters.com/article/idUSN1924818520100819. The CJME report is at http://www.newstalk980.com/story/20100819/38988. The Bloomberg report is at http://www.businessweek.com/news/2010-08-18/canada-s-opposition-calls-for-public-reviews-of-potash-takeover.html.
