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.

The cutting face of a potash borer, shown in PotashCorp's mine in Rocanville, Sask., in 2007. BHP's bid is renewing the debate over the hollowing out of corporate Canada. (Troy Fleece/Canadian Press)

"This is the wrong way to go," she told CBC News. "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 counter to the nationalist argument is that Canada, perpetually starved for investment capital, needs to keep its doors open in order to carve out a place in the technology niches that will make Canadians world leaders.

In Saskatchewan, the prospect of a BHP takeover was "a big deal" when the news broke, Brooke Dobni, a professor at the University of Saskatchewan's Edwards School of Business, said from Saskatoon.

"Potash Corporation has been part of the Saskatchewan fabric for a long time. We're the centre of the potash world in terms of production and there would be a big difference … because most of their executives are from here."

But whether PotashCorp would become just a branch plant or see its dominant position become even more significant is far from clear.

BHP, with an eye on the increasing demand for fertilizer in emerging economies, has been ramping up its presence in Canada for four years, buying exploration rights to more than 14,000 square kilometres.

"They've identified potash as having growth potential, but they are probably four or five years out from having any cash flow out of production," said Dobni.

A farmer and an ox walk through a wheat field after harvest in Luoyang, China's Henan province in May 2007. Demand for fertilizer in emerging economies is growing. (Associated Press)

Buying PotashCorp's already profitable operations, he said, "makes a lot of sense."

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.

Dominic D'Alessandro, while he was still CEO of Manulife Financial, wondered whether Canadians might "all wake up one day and find that as a nation, we have lost control of our affairs."

In 2003, Royal Bank CEO Gordon Nixon spoke of foreign takeovers in Canada's energy industry as the "hollowing out" of corporate Canada and a symptom of domestic industry's slipping international competitiveness.

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.

And foreign interest in Canadian resources is growing, notably on the part of China.

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.

While this might alarm nationalists, it's also a fact that Canadian companies themselves are acquisitors, and there's an argument that if they want to freely shop for foreign firms, the rules have to be equally open inside Canada's borders.

And Canadian companies are buyers, including in BHP's own backyard.

Calgary-based Agrium on August 14 announced an offer for Australian grain handler AWB and in 2009, Viterra snapped up ABB Grain Ltd., another Australian company.

Canadians target 17 Australian firms

In fact, according to a count by Dealogic, a New York-based firm that advises investment banks, Canadian companies and investment funds as of August have announced 17 deals valued at more than $7 billion US in Australia alone.

There are those who would argue that creating made-in-Canada jobs and technology couldn't happen without foreign capital, and along with that, the possibility of foreign takeovers.

Ian MacGregor, the chairman of Calgary-based Northwest Upgrading, is one.

Northwest has proposed building an oilsands crude oil upgrader near Edmonton that would produce low-emission diesel and incorporate carbon capture and sequestration.

'We're perpetually short of capital.'—Ian MacGregor, chairman, Northwest Upgrading

The promise is jobs, and especially jobs created by developing made-in-Canada green technology which can be applied to the oilsands.

But MacGregor, who was reached in New York where he was spreading the word among potential investors, said his project is no different than any other large-scale development in the Canadian economy.

Canadians just can't raise enough capital within their own borders.

"We're perpetually short of capital, so I think capital flowing in to Canada is a good thing for the most part," he said.

"When people come here, if they buy a Canadian company, they come to invest, to grow it and to make it larger, and I think that's also good.

"And sometimes they bring markets with them and that's also good."