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UPDATE: Garry Neil to speak against TSX takeover, March 3

Council of Canadians Executive Director Garry Neil

Council of Canadians Executive Director Garry Neil

Council of Canadians Executive Director Garry Neil will appear before the all-party legislative committee in Ontario reviewing the London Stock Exchange takeover of the Toronto Stock Exchange on Thursday March 3.

The Toronto Star had reported on February 22 that, “A controversial plan to merge the Toronto and London stock exchanges could soon go before public hearings to help the Ontario government decide thumbs up or down on the deal. Opposition parties at Queen’s Park will be approached (today) about forming an all-party committee of MPPs headed by veteran Liberal and former businessman Gerry Phillips, a senior government source said. …If opposition parties agree to the committee headed by Phillips, a cabinet minister without portfolio, the findings would be presented to Finance Minister Dwight Duncan before the government makes a final decision on the deal. …New Democrat Leader Andrea Horwath has been calling for public hearings – as Quebec is doing…”

On February 17, the Council of Canadians sent letters to Duncan and federal Industry Minister Tony Clement opposing the stock exchange takeover. A copy of the letter can be read here.

On February 9, the day the deal was announced, the Toronto Star reported that, “The head of a nationalist watchdog group fears allowing the two exchange companies to combine would mean a loss of jobs, both at the exchanges themselves, and among the broader financial sector, as more firms choose to list their stocks in London. ‘We’ve watched this happen so many times when Canadian companies get taken over. At first, they say ‘it will be good for you, and we’ll keep a Canadian headquarters,’ but inevitably those jobs shift to the home base,’ said Maude Barlow, national chairwoman for the Council of Canadians. If Canadian companies do shift their listings to London, England, they could be following financial rules set outside this country, Barlow fears.”

“Barlow, meanwhile, pointed to U.S. Steel’s 2007 takeover of Stelco and Brazilian mining giant Vale’s takeover of Inco as examples of what can happen when foreign companies take over Canadian firms. ‘U.S. Steel told the Harper government it would keep jobs here when it took over Stelco and then laid off hundreds. Ditto Brazil’s Vale when it took over Inco in Sudbury, leading to an awful and bruising strike.’ Barlow isn’t convinced by the companies’ description of the stock exchange deal as a merger of equals. ‘I don’t care how they sugar-coat this, it’s clearly more a takeover than a merger. London shareholders get more of the company and the chair of the London exchange is the chair of the combined company,’ Barlow said.”

“This isn’t just a takeover of a widget factory, Barlow argued, but something far more important. If a mining company — or any other firm — doesn’t like the rules in Toronto, the new combined exchange would make it easier for them to shift to London, where the rules could potentially be more favourable, she said. ‘We’re talking about the right to regulate our financial system. When you allow a major financial institution to be taken over like this, that’s what’s at stake,’ Barlow said.”

The Canadian Press also reported on February 9 that, “Maude Barlow of the Council of Canadians expressed concern that the company would effectively be foreign owned, adding that the deal will likely result in job losses and the relinquishment of Canadian regulatory control as the exchanges become disconnected from any one jurisdiction. ‘Any decisions made around standards regulations, where this money goes, how it’s used in the end, it will be much harder for us to have a say in that here in Canada.’”

While no exact date has been reported for decisions by the federal and provincial governments on this takeover, it was reported on February 14 by Reuters that, “Clement now has 45 days to make a decision on whether the deal is of net benefit to Canada. He can extend that period by a further 30 days.” That would put the decision date at March 30 or April 29.

Several campaign blogs on the stock exchange takeover can be read at http://canadians.org/campaignblog/?s=tsx.