Prime Minister Stephen Harper arrived in Bali for an Asia-Pacific leaders' summit Sunday bearing what could be called a $36-billion vote of confidence from Malaysia's state-owned oil and gas company.
Malaysian Prime Minister Mohd Najib sprung the "gargantuan" investment figure during a joint availability with Harper in Putrajaya, saying Malaysia's state-owned oil and gas company Petronas has committed to construction of a liquid natural gas plant in British Columbia and the pipeline to feed it.
"I'm told that this is the largest direct foreign investment in Canada by any country," Najib said, flanked by Harper following a formal welcoming ceremony at a sprawling new government precinct outside the Malaysian capital of Kuala Lumpur.
Najib called it a "significant landmark decision" by Petronas, which last year spent more than $5 billion buying Alberta-based Progress Energy Inc.
The Petronas takeover, and a bigger oil patch buyout by China's state-owned CNOOC, prompted months of hand-wringing by the Harper government. It approved the deals late last year but at the same time introduced new rules that permit majority takeovers of Canadian companies by state-owned enterprises only in the most exceptional circumstances.
The policy change put a major chill on direct foreign investment in Canada by so-called SOEs, and analysts have recently begun questioning whether the Conservative policy shift is scaring off much-needed foreign capital.
Najib rode to Harper's defence Sunday, calling the promised Petronas infrastructure investment a testament "to the level of confidence we have in the policies of the Canadian government."
Harper's reaction to the news was almost muted, by contrast.
"Look, we view the Petronas investments very positively and all the indications I have is that Petronas is looking at further investment," said the prime minister.
"The government of Canada is very excited about that possibility, as are all those I've talked to in the energy sector."
However the Prime Minister's Office declined to provide any details of the promised $36 billion investment, referring reporters to Petronas for details. Provincial officials in B.C. had spoken in June of a $19 billion LNG plant and pipeline investment by Petronas, and it wasn't clear Sunday where the whopping new total comes from.
Both Najib and Harper flew with their separate delegations to Indonesia following the Sunday morning meeting in Malaysia.
Regardless, the announcement provides Harper a much-needed shot in the arm as he brings Canada's trade and investment message to Bali.
Fine balance on foreign ownership
Harper has been involved in an increasingly acrimonious and very public tussle with U.S. President Barack Obama over the proposed Keystone XL pipeline to take Alberta bitumen south, and is meeting stiff resistance within Canada to the proposed Northern Gateway pipeline to the B.C. coast.
The Conservatives have also failed to seal the major trade pacts they've been negotiating, and Najib appeared to confirm Sunday that the proposed Trans-Pacific Partnership, involving 12 Pacific Rim counties including Canada, won't meet its year-end target for completing a framework agreement.
So Harper, who has prorogued Parliament and will deliver a throne speech Oct. 16 setting out a new government agenda, needs some good economic news to bolster his case.
Najib was asked by a Malaysian reporter what guarantees Petronas had been given on its multi-billion-dollar Canadian investment "over 30 years."
The investment has a long horizon, Najib agreed, adding he is confident that not only the current Conservative government would support Petronas's Canadian involvement, but so would future governments.
Harper, who has never shied from throwing partisan jabs while representing Canada abroad, took the opportunity to take a swipe at both the Liberals and the NDP. He said Liberals have always approved any foreign investment "no matter what," and that New Democrats "are ideologically opposed to investment."
Harper said his government judges each foreign investment "on its merits" and called it a policy of "discretion."
It's a fine balance for a Conservative government that says it is courting Asian markets and wants to make Canada an "emerging energy super power" but has faced a backlash from its political base over foreign — especially Communist Chinese — state-owned enterprise takeovers.
The policy shift has not been welcomed in China, noted analyst Yuen Pau Woo, president of the Asia Pacific Foundation of Canada.
Malaysia, which has few state-owned enterprises, won't much mind, Woo said in an interview — "they're in the barn already" — but China has a host of state-owned companies looking to expand and Canada is not sending welcoming signals.
Harper said all western governments have some tough choices to make but that Canada is well positioned.
"Look, it's no international secret that the rise of China and of Asia in the minds of all of us is likely to be one of the dominant realities of the coming century," Harper said Sunday.
"Western countries certainly will have their place in the world — provided that we make good decisions."
He said Canada must "avoid some of the pitfalls of other western countries," without citing any foreign examples.
Budgetary and political gridlock in Washington has shut down the U.S. government and will prevent President Obama from attending the APEC summit here.
Najib graciously offered that Asia's rise will be a global boon "and we believe that we should prosper together."