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A Calgary billionaire. A quartet of policy gurus. An Alberta academic. Groups of oil-patch executives. And behind them all, a Prime Minister who for months took a deep personal interest in a decision that stands to shape Canada’s economy for years to come.
When Stephen Harper told Canadians how he intends to re-draw the rules around investment by foreign state-owned companies, his words were, in many cases, borrowed. They were culled from a select group whose insights were given great weight by a Prime Minister who was engaged with the problem even before a pair of oil-patch deals forced the pace.
The Harper government pledged more clarity on foreign investment guidelines two years ago, when it turned down BHP Billiton Ltd.’s takeover of Potash Corp. of Saskatchewan Ltd. It is unclear how much of that new policy had been devised by last July, when China’s state-controlled CNOOC Ltd. launched a $15.1-billion bid for Nexen Inc., following what would be a $6-billion bid for Progress Energy Resources Corp. by Malaysia’s Petronas. By then, sources say, the Prime Minister was already taking a personal interest.
The two takeover bids set in motion a federal drama that would feature missed deadlines, an overturned deal that was subsequently revived and a government warring internally as it sought to establish a response.
Amid the urgency, a government known for resisting outside advice reached out for counsel from a range of academics and business leaders – some not ordinarily aligned with the Conservatives. In the end, the government would arrive at a sharp reversal in its stand, placing a fence around acquisitions by foreign state owned buyers – who have accounted for more than 80 per cent of foreign oil-sands takeovers and joint venture investments since 2007.
To formulate his new doctrine, Mr. Harper called on the experience of foreign governments like Australia, as well as domestic thinking rooted to Canada’s experience with Crown corporations like Petro-Canada, tying decades of this country’s industrial history to a decision that could influence the decades to come.
Cabinet played an important role, too, with ministers like Jason Kenney and Jim Flaherty travelling in recent weeks to Calgary for separate meetings with oil-patch leaders, some of whom expressed reservations about allowing unfettered access to foreign state-controlled investors.
They returned to Ottawa for a debate that saw dissenters like Mr. Kenney, the immigration minister, raise concerns about national security and argue strongly against approving the CNOOC takeover of Nexen Inc. Others, like natural resources minister Joe Oliver, argued that Canada needed the billions in capital that foreign companies can bring.
(On Sunday, in an interview with the Globe and Mail, Mr. Oliver stressed that the government is not saying no to all investment from government-controlled entities. “Their capital is welcome in the oil sands provided it is in a minority position or joint venture, and we will certainly welcome state-owned investment in other sectors.”)
For Mr. Harper himself, however, voices outside Cabinet also resonated loudly.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/globe-investor/harper-draws-a-line-in-the-oil-sands/article6143202/