Ottawa should block Potash sale: Liberals
A host of high-ranking Liberal MPs came out Wednesday to say Ottawa should block the potential sale of PotashCorp. to BHP Billiton Ltd. under the Investment Canada Act because the transaction does not represent a "net benefit" to Canada.
"Our assessment of what is available is that the province of Saskatchewan is right," Ralph Goodale, the deputy Liberal leader, told reporters in Ottawa.
"This transaction would amount to the sale of the entire industry. That raises the stakes here to something more profound.
"The answer should be 'no' on principle," Goodale said, flanked by fellow caucus members Marc Garneau and Denis Coderre.
"In our view this is a bad takeover," Coderre said in French. "If it happens to Potash, what will happen to other industries?"
Anglo-Australian mining conglomerate BHP is trying to buy PotashCorp outright in a $38.6-billion bid to expire on Nov. 18. Ottawa would have to sign off on the transaction for it to go forward.
Garneau demanded clarity on the subject of "net benefit to Canada," a key phrase that is in the text of the Investment Canada Act, as a requirement for any foreign firms seeking to take over major Canadian companies.
"Is it just keeping jobs?" Garneau asked "The definition of net benefit comes out of the Industry Minister's office, and we have no idea. We think there are things that need to be defined," he said.
Industry Minister Tony Clement is due to announce a decision on the Potash takeover by Nov. 3. Clement reiterated Wednesday that all companies must pass the "net benefit" test in order to have the government's support, the definitions of which are clearly laid out in the act, but he added that all cases are unique.
"Our position is, we are reviewing the bid, and we continue to do so in a very serious manner," he said. "It is important that whatever bid is accepted — if it is accepted — that it passes the net benefit test.
"I'm not going to get into any speculation on this, [because] if I get into any more detail, I risk tainting the process," Clement said. "I guess the Liberals don't care about things like shareholder rights … anything I say could have an impact on the share price. That's not fair to shareholders and the rule of law."
Saskatchewan Premier Brad Wall is widely expected to urge Ottawa to reject the BHP deal when he speaks to a business lunch audience in Regina on Thursday.
When asked if he was receiving pressure from his Saskatchewan-based caucus colleagues on the decision, Clement said that wasn't true. "I wouldn't characterize it that way. I've sat down with our MPs and I'm feeling no pressure," he said.
"We are obtaining viewpoints from the government of Saskatchewan."
In the two decades since the act has existed, it has only been implemented once to block a sale outright. That was in 2008, when MacDonald Dettwiler and Associates tried to sell its space division to U.S.-based Alliant Techsystems Inc.