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CALGARY — Canadian intelligence services appear to have probed financial links between First Nations groups and Chinese companies as scrutiny continues to mount on China’s interest in this country’s natural resources sector.
This week, Chinese oil company CNOOC Ltd. announced a $15-billion takeover bid for Calgary-based Nexen, a proposal that will have to pass scrutiny under the Canada Investment Act. The deal seems to be raising warning flags among politicians who fear the energy-hungry superpower’s influence in Canada’s oil patch. But scrutiny of China’s investment reach appears to stretch back several years.
Vancouver-based lawyer Merle Alexander said he was approached by Canadian Security Intelligence Service agents twice, in 2010 and in 2011, after presenting seminars on a memorandum of understanding signed between the Kaska Nation and Silvercorp., a B.C. company with Chinese links.
He said they identified themselves with CSIS badges and “appeared interested in determining whether there is direct involvement or influence between the Chinese government and First Nations governments,” he said.
CSIS declined to comment.
According to the CBC, Nexen’s CEO also met with CSIS director Richard Fadden in April of this year to discuss security issues.
As China’s economy has continued to grow in the face of the global economic slowdown, its appetite for natural resources has become ever more voracious. And that has led capital-rich investors to resource-rich Canada.
Last year, the China Investment Corporation — one of the largest sovereign wealth funds in the world — established its first overseas office in Toronto.
In 2009, the fund purchased almost one-fifth of the shares of Teck Resources, a Canadian company with 13 mines around the world.
China has also made several purchases in the Alberta oil patch: in 2010 Sinopec snagged a 9% stake in Syncrude for $4.65-billion and, more recently, PetroChina purchased 40% of the MacKay River project from the Athabasca Oil Sands Corp. for $680-million.
The massive Nexen proposal — one of the largest investments China has attempted in the oilpatch to date — is expected to generate much political fretting according to Theodore Moran, a senior fellow with the Peterson Institute for International Economics. He published a paper in March examining Canadian concerns with Chinese involvement in the resource sector. Fears tend to circulate around three issues, he said; firstly, that China will become such a powerful player in the global oil market that the country will be able to manipulate supply; secondly that sensitive technological information will be leaked to the superpower and, lastly, that China could gain a foothold in Western nations’ information technology, leading to privacy concerns and spying.
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