NDP energy and natural resources critic Peter Julian moved a motion up for debate Tuesday in the House of Commons calling on the Harper government to consult the public before allowing a Chinese state-owned company to take over Calgary-based oil producer Nexen Inc. (Adrian Wyld/Canadian Press)

New Democrats are asking the government to hold public hearings into the controversial Nexen Inc. takeover by a state-owned Chinese firm, saying public opinion is already "crystallizing" against the deal.

But Treasury Board President Tony Clement asserted the government couldn't do it even if it wanted because it would break existing Canadian law.

Responding to a question after his morning speech to the Economic Club in Ottawa, Clement, a former industry minister, said there's a legal process under the Investment Canada Act that must be followed, and public hearings are not part of the process.

"The law is very clear under the Investment Canada Act," he said. "There's a legal process that if you diverge from that process in any way, you're going to be subject to legal consequences."

NDP Leader Thomas Mulcair dismissed Clement's claim as "pathetically absurd."

After asking for consultations for weeks, the NDP tabled a motion in the House of Commons on Tuesday calling the Harper government to speedily hold public hearings on the proposed takeover before it is too late.

The Opposition party, which has been holding its own public consultations, is officially undecided on what the government should do, until it issues the result of its deliberations. However, most comments from NDP MPs suggest the party will likely conclude the $15.1-billion deal is bad for Canada.

Some members have been more open than others about their true feelings. In debate in the House, Winnipeg Centre MP declared approving the takeover was tantamount to "economic treason."

Review deadline next week

The deal 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.

NDP critic Peter Julian noted that his party has been doing the work the government should be doing in seeking input from the public and stakeholders.

"What we're seeing is a crystallization of public opinion against this deal," he said.

He added the Nexen takeover by the China's CNOOC Ltd. has been the top issue even among his constituents in Burnaby-New Westminster, B.C., adding the oil patch is not normally a hot-button issue in his riding.

Julian said the NDP will issue its opinion soon, almost certainly before the government is finished with its review.

Under the Investment Canada Act, the government will apply the "net benefit" test to determine whether to approve or reject the foreign takeover. But critics have argued the parameters are so flexible that the test often has to do with whether it will be of net benefit to the government.

And Julian said the government should institute a requirement for public hearings and a more transparent process because of the expectation that Canada's energy resources will increasingly become a target for foreign investors.

"Some people have talked about a tidal wave of other acquisitions and other takeovers ... and because the government has so badly botched this file, we are now in a much more difficult situation," he said.

Public opinion plays a role

In the House, Industry Minister Christian Paradis said the foreign investment act is evolving, noting that since 2007 the government added provisions for state-owned enterprises and for issues dealing with national security.

"This will be scrutinized carefully," he said.

After years of rubber-stamping takeovers, the Harper government intervened into two high-profile proposals, most recently the acquisition of Potash Corp. by an Anglo-Australian concern.

The prime minister has said that public opinion would play a role in the decision.

So far, public opinion polls have tended to show most Canadians have concerns. The most recent by Sun News-Abacus published two weeks ago suggested the opposition was increasing, with 69 per cent of respondents saying Ottawa should reject the deal. Even some Conservative MPs have voiced opposition.

Julian said his party's consultations have revealed that Canadians have concerns about national security, the environment, as well whether jobs will be protected.

Support has also been expressed, he said, particularly with the high price CNOOC is prepared to pay Nexen shareholders.

Aside from the economic merits of the specific case, supporters of the deal believe a rejection would have far-reaching consequences for Canada's global trade strategy aimed at closer economic ties with the world's second-largest economy.

A conference organized by the Canadian Council of Chief Executives last week emphasized the benefits of closer ties with Asia — and particularly China. Addressing the conference, both Finance Minister Jim Flaherty and Bank of Canada government Mark Carney urged Canadian firms to look to the East for new opportunities.

China expert Wenran Jian of the University of Alberta said rejection of the Nexen bid would have negative ramifications for Canada's relationship with China.

"We don't have to treat China as a friend,"he said. "But we should treat them as a business partner."