Harper in a Box re: Foreign Investment

Smoky Lake Signal Article No. 242 (October 24, 2012) Whispering in the Wind On more than one occasion I have offered the view: Canada is NOT for sale! I have also indicated that the continuing turmoil in the Middle East has put Canada (and Alberta) on a pedestal with the clear suggestion that Canada is now a secure, stable, energy super power. It’s now up to Prime Minister Harper to guide Canada on that stage. Actually that is not the wish for a few nations, including some global corporations – their interest is to claim ownership of Canada’s energy resources rather than simply trading in energy products – these foreign interests have made their position clear; if Canada wants funding for the development of Alberta’s oil sands then these foreign interests want more control over how things are developed and a greater share of the benefits pie. Events are unfolding and I am beginning to think that Prime Minister Harper is sending out mixed, confusing messages to the international investment community, if not sending out contradictory messages. Mr. Harper has tried to control the damage that he and his government created – in the last couple of days Mr. Harper has said that he will shortly make clear the rules of foreign investment in Canada. Canada – China Investment Treaty Mr. Harper’s government has recently and quietly tabled an investment agreement in the House of Commons - the Canada-China Foreign Investment Promotion and Protection Agreement. In itself these types of agreements are no big deal – except in this case it is a big deal. Experts in the investment field have expressed some concerns regarding the government’s rather blaze approach to the implementation process and that the agreement is going through the House of Commons without any serious debate. The law firm McCarthy Tetrault has concluded that the investment agreement with China “is likely to become one of Canada’s most significant investor protection treaties.” Gus Van Harten a professor of international law at Osgoode Hall’s law school in Toronto opines on the arbitration process in the agreement: “This process can override any decision we [Canadian’s] take. It could be a decision of the Alberta legislature, or the Parliament of Canada or the Supreme Court of Canada.” Last week opposition Members of the House of Commons asked for public hearings on the investment agreement with China but their request was turned down by the conservative dominated trade committee. State Owned Enterprises Make a Play on Canada’s Resources In my view, the main issue facing Prime Minister Harper (and his wish for an effective foreign investment development strategy), is going to be how he and his government views and treats State Owned Enterprises. Simply put, State Owned Enterprises are extensions of foreign governments and therefore are the arms of a foreign government and their policies. That in itself adds many levels of complexity to the issue and will generate major problems regarding the monitoring, transparency and accountability of any foreign government’s operations in Canada. There are two examples before Canada’s investment review group and things are not going well for either example. Malaysia’s State Owned Enterprise, Petronas” put forward a $6 billion bid for Progress Energy Resources Corp., a LNG operation in northern British Columbia. Petronas’ bid has been rejected by Investment Canada and Petronas has 30 days to review its proposal and show that their bid is of “net benefit” to Canada. One of China’s State Owned Enterprises, CNOOC has put forward a $15 billion bid for the takeover of Nexen Inc., a diversified energy company with holdings in various parts of the world – including the politically sensitive areas in the Gulf of Mexico and the North Sea. In this case the Government of Canada has asked for another 30 days to review the CNOOC proposal.