Two and a half cheers for Stephen Harper and Tony Clement.

They got the potash decision right, blocking the takeover of Potash Corp. by international mining giant BHP Billiton.

Even if they came to this result for crass political motives — to protect their stranglehold on 13 of Saskatchewan's 14 seats in the House of Commons — they still did the right thing.

Even if they did it because of pressure from Saskatchewan Premier Brad Wall, much of the Alberta oil patch and the governments of Alberta, Manitoba and Quebec, it was the right way to go.

And even if they almost choked, swallowing themselves on the ideological purity of free trade and open markets, they got it right.

Now go sell it! Industry Minister Tony Clement after setting out the government decision on the Potash Corp. takeover in the lobby of the Commons on Nov. 3, 2010. (Chris Wattie/Reuters)

True, the book isn't entirely closed on this takeover saga. Under the Investment Canada rules, BHP Billiton has 30 days to polish up its bid so that it might provide, as the rule says, "a net benefit to Canada."

And Potash Corp. is still treating the unfriendly bid for the company as a mere "business as usual" event that was rejected by its board because the price was too low.

The implication here is that if another foreign bid comes along with a higher share price and a bigger payout for executives and directors, the board might want to sell.

Well, here's a scoop for the Potash Corp. board: The reason the Harper government responded as it did wasn't because the price was too low and the executive payouts too small.

The reason was because it understood that most Canadians don't want to lose control of a company that they realize is exceptional and holds more than half the world supply of an essential resource that will only go up in value.

Wink wink

I realize this is a complicated story but I think most Canadians understand that foreign ownership of this resource would cut significantly into the revenues of the government of Saskatchewan as well as Ottawa.

More importantly, they realize that selling Potash Corp. would represent a continuing hollowing out of corporate Canada, particularly of the country's most significant resource companies.

So even if there has been a wink-wink from Investment Canada to BHP on how the deal might be made more attractive, it will be almost impossible for the government to approve any new offer given the general public support for the way this has been now turned down.

What's more, since any other, higher-priced takeover bids would likely come with either Chinese or perhaps Russian backing, those would be even more difficult for the government to approve.

Still, instead of keeping a low profile and waiting to see what happens next, Harper and Clement should be out there selling their decision, setting out their view of Canadian industry and countering their critics.

Because of course there are always critics.

More clear rules

Fortunately, many people who support the idea of free market capitalism, as I do, also see that, in this case, Potash Corp. is unique and should be treated differently.

However, there are some free-market believers who will complain. But most of their criticism is without merit.

For instance, the argument that the turndown means investors will give Canada a pass in the future and that Potash Corp. will have trouble financing its operations.

Nonsense. Investors put their money wherever they can make a profit. They invest in countries like China, Brazil and others that have strict foreign ownership requirements on many industries because they can get rich even with those controls in place.

As for Potash Corp., international markets are now well aware of just how valuable it is and how profitable it can be, not just now but for years to come. That means the company will have no trouble raising money whenever it wants to.

The argument that, by blocking this deal, Ottawa has effectively "nationalized" Potash Corp. is also without merit.

There are laws prohibiting foreign control of banks, airlines, telecommunications companies and broadcasters. None of them are "nationalized."

Don't stop now

Now, it is true that the rules governing those industries have been in place for a while and investors understand that.

So, in the case of Potash Corp., its shareholders could be deprived of a profit that they might otherwise expect if future ownership is to be somehow restricted.

But that is only partially true. The run-up in the value of Potash Corp. shares has been considerable, even mouth-watering.

For investors the question is not about losing money. It is about "Could we have made a bit more?"

Which means that the next step should be a clear definition of what industries and resources are in the national interest and should be, if not directly under Canadian control, at least widely held.

Investment Canada was an early creation of the Mulroney government in 1985 to attract foreign investment to this country.

But much has changed since then, including the emergence of sovereign investment funds controlled by foreign governments.

So don't stop now Stephen Harper and Tony Clement. Keep on this file, create new rules and definitions. Keep Canada competitive while defending the larger national interest.

Do that, and it will be three big cheers for you both.