Federal NDP opposes Nexen takeover bid

The federal NDP says it opposes a bid by Chinese company CNOOC to take over Nexen, the Calgary-based oil company. Prime Minister Stephen Harper says that doesn't surprise him, calling the New Democrats "ideologically socialist."

Stephen Harper says he isn't surprised by 'ideologically socialist' NDP position

NDP natural resources critic Peter Julian says the Official Opposition is against a bid by Chinese company CNOOC to take over Nexen, the Calgary-based oil company. (Adrian Wyld/Canadian Press)

The federal NDP says it opposes a bid by Chinese company CNOOC to take over Nexen, the Calgary-based oil company.

Natural resources critic Peter Julian and industry critic Hélène Leblanc say the process hasn't been transparent, and there are too many unanswered questions.

"They've completely botched this file. This is a mess of the government's own making," Julian said. 

Two years ago, the government blocked a takeover attempt of Potash Corp by Australian company BHP Biliton. Then-industry minister Tony Clement said the deal wouldn't offer a "net benefit" to Canada. The term is used in the Investment Canada Act but that isn't defined, something critics say leads to confusion.

"Investors don't know when they come forward, whether we're talking about a company from Europe or Australia or China, there is simply no way, because this is all handled in a backroom with very nebulous criteria, simply no way for the investors to know whether or not this is going to blow up into a political issue," Julian said.

The proposed Nexen takeover is worth $15.1 billion, triggering a review under the Investment Canada Act. It is currently under a 45-day review by Industry Canada that ends Oct. 12, but Ottawa could extend the deadline for reaching a decision by a further 30 days.

U.S. officials are also reviewing the proposal because of Nexen holdings in that country.

Critics of the deal are concerned about Chinese state ownership of the oilsands.

'Ideologically socialist party'

Prime Minister Stephen Harper says the NDP position on the takeover "is not a surprise."

"On general orientation towards investment, obviously we understand, you know, the NDP is an ideologically socialist party that's opposed to all investment," Harper said at a press conference with Jakaya Kikwete, the president of Tanzania, who is visiting Canada.

"We do have to remember as Canadians that a lot of jobs in this country, a lot of jobs and growth depend on the investments that come to this country. As well, Canada is a significant investor in other parts of the world, as we are in Tanzania. So our economy depends on the kinds of jobs and growth that international investment flows create."

Harper says the government generally welcomes foreign investment, but noted it has modified and blocked some deals.

"As I've said before, as the minister of industry has said, this particular transaction raises a range of difficult policy questions, difficult and forward-looking issues, and those will all be taken into account under the act in assessing the net benefit of this investment to this country before we take a decision."

Mulroney defends Net Benefit test

The man who introduced the net benefit test defended it amid questions over its effectiveness, in an interview with the CBC's Amanda Lang set to appear on Thursday's Lang & O'Leary Exchange.

Former prime minister Brian Mulroney addressed the Investment Canada Act on the anniversary of the North American Free Trade Agreement.

Free trade creates wealth and jobs, and jobs are instruments of dignity for Canadian families, Mulroney told Lang.

"All of this has to be balanced against, quote unquote, 'the national interest' and the concept of net benefit," he said.

Given how long it's been since he introduced the act, Mulroney said, the current government may want to review it to see whether it contains the policy instruments required.

"They may conclude that we don't and [we] want to do something about it, but for the moment the net benefit test is a good one and it will be up to the government to decide if [the Nexen deal passes] that test."

With files from The Canadian Press