Is foreign investment good for the economy ...or should Canadians be wary? (with online chat)

Nexen - Long Lake

Nexen - Long Lake


Foreign takeovers: After blocking the sale of two Canadian resource firms, the government is scrambling to update old guidelines on foreign investment. All this ahead of a bigger move by a state-owned Chinese company CNOOC to buy into the oil patch by taking over Nexen Inc.
Should Canada allow foreign state-owned companies to buy into Canadian resource industries?
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Foreign takeovers in Canada's energy and resource industries has been an issue creating unease in the business community for some time and this past week it spilled over into broader attention.

It happened after the federal government moved to block the sale of a Western gas company, 'Progress' to the state-owned Malaysian giant Petronas. The $6-billion dollar sale was supposed to clear the way for new development on the west coast that would facilitate the export of Liquified Natural Gas. The government move got the attention of business observers around the world, share prices dropped, and some said it sent a signal that Canada was no longer open for business.

In the House of Commons the oppostition parties accused the government of acting too hastily and too secretively. They said the government has no plan or policy. The government says it is presently working on reviewing and updating the old guidelines on foreign takeovers.

The real concern is what it means for a much bigger deal awaiting approval ...the sale of Calgary-based oil company Nexen Inc to CNOOC (see-nook), the Chinese National Offshore Oil Company for $15.1-billion dollars. This deal would give China a bigger foothold in the Alberta oilsands ...and that is something that has divided Canadians and the business community. Some feel that a state-owned enterprise, especially when that state is China, will act in a way that best suits the interests of that country, which will make it difficult for private businesses trying to compete. Others say Canada's economic future and wellbeing depends on engaging Asia and specifically China ...and engaging China means dealing with state-owned companies.

Polls suggest a healthy majority of Canadians believe that Canada must be open to foreign investment ...but a bigger majority are worried about losing control of Canada's resource industries.

We want to know what you think? In a time of economic uncertainty should Canada welcome foreign companies that want to invest money? Does it matter if the companies investing in Canada are state-owned or private? Does it matter if its China or the US? How important is it that Canada develop a solid business relationship with China which is on track to become the world's largest economy? Is there an element of China-phobia in Canadians' reactions to all this? Or is it simply a recognition of the size and appetite of China?

What about the energy and resource industries they present a different set concerns? Should the rules for energy and resources be a bit more restrictive than for other industries ...such as the auto industry or pipe manufacturing for example? What do you want to see in the government's new set of guidelines on foreign takeovers? Can Canada afford to say 'no' to offers of foreign investment?

Our question: "Should Canada allow foreign state-owned companies to buy into Canadian resource industries?"

I'm Rex Murphy ...on CBC Radio One ...and on Sirius satellite radio channel 159 ...this is Cross Country Checkup.


  • Jason Fekete (online chat only)
    Senior parliamentary reporter for Postmedia News in Ottawa.

  • Deborah Yedlin (radio and chat)
    Columnist Calgary Herald

  • Diane Francis (radio and chat)
    Editor-at-large for the National Post

  • Paul Moist (radio and chat)
    National President, Canadian Union of Public Employees

  • John Manley (radio only)
    Former Deputy PM, Minster of Finance and now Pres. & CEO of the Canadian Council of Chief Executives

  • Wenran Jiang (radio only)
    Author of The Dragon Returns: Canada in China's Global Quest for Energy Security. He is advising the Alberta Department of Energy on Asian market diversification.


Financial Post

Globe and Mail


Calgary Herald

Toronto Star

Winnipeg Free Press

Ottawa Citizen

Edmonton Journal

Progressive Economics



I am curious why the major Canadian players hate any national energy companies if they are Canadian (like Petro Canada) but foreign state-owned ones are just fine? We have no national plan, aren't part of OPEC and simply love being primary resource providers, starting with the Hudson's Bay Co. Canada is yet again a massive orange, being hollowed out to sell to nations who'll make stuff out of it and sell it back at higher profit.

We then fight unionization for workers, import them rather than train them (maybe because they know it's not forever), subsidize exploration and sign deals with nations to guarantee supply regardless of domestic need.

Canada apparently lacks its own capital to finance the projects (maybe time to tax foreign investments by Canucks to bring the billions home), or we lack any sense of national identity that every other oil producing nation seems to possess.

Lunacy. Look at the mountains of British Columbia and see what happens when you let B.C. resources get owned by foreign firms (raw log exports) or salmon (most farms are European).

Duncan, British Columbia


As CEO of Alexco Resource Corp., I want to set the record straight with regard to the comments of Jim Milley and our operations in the Yukon.

To clear up just a few of the false statements made by Mr. Milley: We are absolutely a Canadian company, incorporated in Canada, publicly traded on the Toronto Stock Exchange, and operating in Canada. In an area that was desperately under-employed just a few years ago, we now provide work for more than 280 Canadian employees and contractors. More than 50% of our Yukon operations employees are Yukon residents, despite the remoteness of this location. Over the past five years, Alexco has contributed more than $53 million to the region via business with Yukon-based vendors and through donations to community organizations.

We've invested over $17 million to remediate historic health and wildlife hazards throughout the Keno Hill District and have reduced zinc release from the historic Galkeno 300 mine by 99.5%. All of this has been done through plans thoroughly vetted and reviewed by government regulators, community participants and environmental experts. And contrary to Mr. Milley's assertion, there are plenty of qualified and experienced people that "know what's going on there."

I'm particularly concerned about how Mr. Milley's mistruths affect our employees who have given and done so much to improve the environment and opportunities at Keno Hill. We took on an un-used, abandoned and contaminated site, invested millions of dollars to remediate historic contamination and built value while going above and beyond the requirements, paying special attention to the concerns of the communities. It is extremely disturbing to see one individual try to tear that down on a national stage.

Clynt Nauman
CEO, Alexco Resource Corp.
Vancouver, British Columbia

I am not against foreign investment but I am opposed to agreements that allow foreign companies the ability to have more rights and privileges than that of our local industry, the ability to skirt Canadian laws and the ability to sue our government (and thus taxpayers) if we refuse to allow a project for good reason (a dangerous high risk pipeline or tanker route, for example). I would also like to add that it is absolutely appalling that a democratic government would be so secretive in it's dealings on agreements such as FIPA and CETA and also disallow debate or Canadian input on them (at least in the case of FIPA).

Calgary, Alberta


Stephen Harper will sell Canada out to foreign investors to please his corporate backers. Harper is to Canada's future what Gary Bettman is to Canada's game. Ironically our Big-C Conservative Prime Minister keeps jumping into bed with the Red Communist Chinese. There's a name for people who sell out their principles to participate in the world's oldest profession.

Vernon, British Columbia


Why is Mr. Harper planning on signing this secretive deal with China without the agreement of the people of Canada? It has not been debated in parliament by our elected representatives. I would like to remind Mr. Harper that he is a public servant - a servant of the public - that means you and me. Mr. Harper and his party have forgotten their mandate. His party was elected to serve the best interests of Canadian citizens, who are also the voters and the taxpayers.

The proposed China - Canada Free Trade Agreement gives away our sovereignty. It will prevent Canadian citizens from making decisions independently and in their own best interests. Mr. Harper forgets who is in charge in Canada. The citizens are the ones who voted in the politicians. The citizens are in charge and Canada belongs to all the Peoples of Canada.

I would like to say that Mr. Harper should be stopped from signing any more Free Trade Agreements. They strip away our national sovereignty and our right to make decisions about how we will look after the Earth and the fragile biosphere for generations to come.

Canada should not be dictated to, either by another country or by a group of faceless, independent trade negotiators. Neither of these entities are answerable to us as citizens, just to other governments and corporations. Mr. Harper has forgotten that corporations do not vote for politicians. Therefore corporations have no right to influence decisions made by citizens, or elected public servants acting on their behalf.

Orangedale, Nova Scotia


A big "No" to any foreign owned companies having a majority interest" in Canadian resource industries!

Toronto, Ontario


I'm worried that the owners of said company will have different hiring practices, and I assume will handle employee issues without the Canadian labor laws or rules.

Moncton, New Brunswick


Let's just cut to the chase here: China is a dictatorial, communist totalitarian state, and accountable to no one. It's stupid to think that they will be more environmentally responsible with their oil coming from Alberta or Saskatchewan. There are democratically-based companies to take their place.

Orleans, Ontario


Reluctance about dealing with state-owned Chinese companies is not some knee-jerk issue with Chinese people. China doesn't have anything like a legal system as we understand it. Moreover, companies and the state are not easily distinguished in the Chinese system. Analogies with the U.S. are not realistic.

A. Sullivan


I hope I misunderstood what an earlier guest was trying to say. I thought I heard her say, or at least imply, that we should let the sale to China go through so that investors could get money in these hard times. Isn't there a rather vulgar word to describe that sort of behaviour? The other thing I inferred from what she said is that she is trying to paint this as a racist issue by asking if our problem with the sale is that it is to China. Considering what we know (or, more importantly, don't know) about the government of China, I think we are absolutely right to have concerns about this sale. That doen't make me a racist. It makes me a person who is opposed to totalitarian, secretive governments.

H. Hanratty


In simple words, "No" (to foreign investment), and especially in the case of a foreign agency whose human rights are not in sympathy with Canada's position on human rights. A state-owned agency will always follow the directives of its government. This is straight-forward. Business aside, we simply cannot expect that a foreign agency will have one position as directed by its own government and have another that is particular to Canada. Otherwise, we become a dumping group for capital investment without regard to character, workers rights, human rights as seen through eyes of the people of Canada and its representatives.

Vancouver, British Columbia


I am not sure where I sit about this concern as I need more information. But I do have a concern. Norwegian state enterprise already is heavily invested in the oil sands. As well, recently, the famous XL Foods was quietly sold to a firm partly controlled by the Brazilian government and there was no outcry that I am aware of. Is this possibly a racist thing? If it were other European companies trying to buy in, would we have the same fears? And if the Chinese are so bad, why is our Prime Minister actively trying to tie us into a free trade agreement with them?

Saskatoon, Saskatchewan


I believe Canada should be open to foreign investment as long as it does not in any way impinge on Canada's sovereignity, and as long as the investment is conducted in a transparent and fair manner to all concerned.

This is unfortunately not what is happening with the Canada-China Foreign Investment Promotion and Protection Act (FIPA) which Stephen Harper's government is about to enact into law without any debate whatsoever by our elected representatives in Parliament. As a country, we need to maintain our rights over our natural resources and not allow any foreign company or country to have rights to these that supersede or interfere with these rights such as will be the case if this act is allowed to proceed.

In his rush to give away our natural resources under the guise of maintaining a strong economy, Harper is creating a situation where Canadians will be paying millions in damages which will inevitably be levelled against us behind closed doors if FIPA is allowed to proceed.

I firmly believe that if FIPA was good for Canada, Parliament would be debating its merits and it would not be rushed in secret behind the backs of our elected representatives.

Rockwood, Ontario


Ask any farmer: sell the milk, keep the cow.

Abbotsford, British Columbia


Canada has no business allowing the purchase of Canadian resource companies by foreign dictatorship government-owned corporations. We should be open to international investments by truly private investors, and even with private investors we have to be careful that we don't loose control over our resource. To use the excuse of hard financial times you are basically implying that canada should sell the rope to the hangman who is going to hang us out to dry.

Medicine Hat, Alberta


What is going unnoticed is that China will be acquiring our home-grown intellectual capital: our systems, processes, technologies and people, that will allow China to develop and market resources anywhere in the world. This will mainly benefit China, not Canada, in the long term. China's competitive advantage is lots of smart, cheap labour, while Canada's competitive advantage is not just the resources in the ground, but more important the intellectual capital to exploit those resources. We will be selling that advantage, allowing China to eventually compete with us with much lower costs. The value and consequences to Canada of the lost intellectual capital must be considered in the net benefit calculation. The net benefit to Canada could well turn into a net handicap. Nexen is a jewel in Canada's treasure chest of natural resource companies. Let's not sell the family jewels.

Eagle Bay, British Columbia


I agree with everything said by Diane Francis but she left out one very important aspect of this deal. A deal of this size with the enormous implications that it has must be debated in parliament. There has been no debate and as far as I'm concerned, no debate equals no democracy. The only politician I've heard raise their voice is Elizabeth May and thank goodness for her.

I also would like to ask where has the media been on this? More to the point, where has the CBC been on this? Are all the journalists asleep? We hear countless stories about Lance Armstrong, the U.S. election, etc. but an important Canadian issue seems to go unnoticed. At least you are finally exploring this story for which I thank you, but I gather it was with some pressure from the public.

Courtenay, British Columbia


No country or private company should be allowed to appropriate our resources. I am extremely concerned about this issue and was pleasantly surprised, but suspicious, that the government dismissed the Malaysian take over. I am not a conspiracy theorist but am seriously wondering if China is behind this decision.

I am disgusted that Mr. Harper is so willing to give our resources to China and so willing to let China have veto power on our own soil for money. We seem to be well on our way to change our name from Canada to "Western China".
I have never believed in separatism in Canada but with the Enbridge/Gateway project and others looming over our heads in British Columbia, the separation of B.C. from Confederation into the country of Cascadia is something I would now seriously consider.
I hope that last night's earthquake put a final nail in Enbridge's coffin by the way.
Victoria, British Columbia


Excellent discussion as usual. Utilizing foreign investment in the development of our nation's natural resource sector is not problematic per se. My understanding is that British capital funded much of the massive boom in 19th-century rail construction and petroleum development in the U.S. The salient question is the degree to which such investment allows foreign entities (especially state-owned enterprises) to gain control of sectors vital to our national interest, and thereby to effect changes in public policy. While there is inevitably some xenophobic element in discussions about the involvement of state-owned Chinese corporations in buying Canadian assets, it's very important to remember that China remains a totalitarian state. As history has amply shown, the policies of such governments should be regarded with a great deal of scepticism. This is especially true when they are involved in building vital infrastucture on our soil.

New Market, Ontario


This 31-year agreement is crazy. We're on the brink of selling the farm and we'll end up being surfs bowing to a Communist mega power. Canada will be crushed like a bug. Please keep up your efforts and lets get the attention of our government that seems bent on Shanghaiing our beautiful country. We don't need to sell controlling interest to anyone.

Vancouver, British Columbia


I would like to know why we export crude oil. Why don't we refine it at home and sell it for a good markup? All I can see is benefits for us if we sold refined oil. It would provide more employment at home. It would reduce the capacity required of our pipelines. Also, by selling a refined product, I think the risk of an environment disaster, if a pipeline were to break, would be greatly reduced.

Winnipeg, Manitoba


Isn't it ironic that Trudeau's Nation Energy Program was discarded only to let other countries into Canada for their energy program. I would say that Trudeau was a man of vision. Why such a rush to mine and sell off our resources they are only going to increase in value with time? We cant seem to get rid of them fast enough. Maybe when our resources are gone we can beg Iran for a portion of their oil if we ever establish good relations with them.

Edmonton, Alberta


It is of only casual interest that we, the people, take time to discuss the serious question of allowing purchase by anyone of our resources. After consultation with the top business community, Mr. Harper will decide what will be permitted and the government, with its majority, will obey. Any expert opposition questions and observations by Checkup phone listeners have no significance.

K. Peatling


Foreign investment is the equivalent of clear-cutting in the forest industry in that we want it all now instead of selective logging for the long-run.
Victoria, British Columbia


Petro Canada has been mentioned. What continues to baffle me is the intense hostility that was generated when Trudeau created it - deeming it another step to a communist Canada. Some Albertans even referred to the new Calgary headquarters as "Red Square". How do these same people reconcile their open-armed attitude to a super-secretive authoritarian country purchasing a significant stake in Canadian resources, when it was completely unacceptable for their own "democratic" government to do so? Oh, wait, could it have something to do with the massive, short term profits to be made?

Saanich, British Columbia


Everyone seems hung up on the Chinese. People forget about other foreign investments, such as Statoil, or the fact that Canada has a large majority of the world's natural resources that are not state owned and are therefore open to foreign investment. Also, everyone seems to be forgeting that Canada has one of the world's largest sovereign funds in CPP. Hundreds of billions of dollars we need to invest in other countries. These large investments are usually in critical infrastucture in foreign lands. If we want to invest we should expect to let others invest in Canada.

Edmonton, Alberta


Human rights and environmental concerns alone are enough to negate this deal. Furthermore, how is it that the federal Conservatives - advocates of minimal government - are even considering a buy-in from a government? Also, I don't think that China's American bond holdings give it ownership rights (issue brought up by John Manley). Thanks for this opportunity.

F. Nydam


Let us ask ourselves the meaning of investment. My belief is that as a people, we need to be mindful of the foreign investment we continue to accept and be very wary of acceding to foreign ownership. Our natural resources are only our's to steward for future generations. If we choose not to accept this responsibility then we risk losing our identity as a people and a nation, not to mention our children's futures.

St. Albert, Alberta


I live in Sudbury where Vale purchaed INCO. Our local economy has boomed since the takeover. Personally, we dont care about what you bring into the country, lets just make sure we tax them large on the way out!

Sudbury, Ontario


Foreign services? Sure. Manufacturing? Sure. Raw resources? Never. Our sovereinty is at stake. This has nothing to do with it being China (the point made by previous emailer about no one complaining about the Brazilian take over of XL was fantastic). It has, instead, to do with the fact that our resources are our land and our tangibles (unlike the service industry). We formed as a nation to protect our land, and I affirm that the government exists to maintain that sovereignty.

Okotoks, Alberta


Joint ventures are more acceptable. Look at the 50/50 Joint Venture of Trans Alta with Warren Buffett's MidAmerican Energy Holdings Co. The deal is to attract capital to expand replacement efforts of tired, polluting, coal-fired electric generators with natural gas generation. Complete take-over is not always necessary.

Calgary, Alberta

Part of this discussion can be boiled down to this question: what is China? If this was an Iranian company, it would be denied, no question, and if this was a Norwegian company, again, no question it would go the other way. So it seems China lies somewhere in between. China's lack of reciprocity certainly increases suspicion that this is a power grab, and be used as leverage against us in the future. The situation is made more dangerous with the death of Western manufacturing. Our economy has been hollowed out, and we're falling all over ourselves to sell what's left.

Calgary, Alberta


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