Prime Minister Stephen Harper huddled with his top cabinet ministers for more than four hours on Parliament Hill Wednesday to talk about a state-owned Chinese company’s proposed takeover of an Alberta oilpatch giant.
China National Offshore Oil Corp.’s $15.1-billion offer for Nexen Inc. of Calgary will require federal government approval.
Normally, bureaucrats at Industry Canada would size up the deal and make a formal recommendation to cabinet before Harper and his advisers discuss the deal.
But even though bureaucrats are weeks or perhaps months away from their assessment of CNOOC’s proposal, the Harper cabinet took the rare step of beginning its own review of some of the implications for both business and politics.
"Canada is open for business. Canada is open for investment — provided the investment is a benefit to the country," Natural Resources Minister Joe Oliver said at the conclusion of the unusually long cabinet meeting.
Oliver, like several other ministers who attended the meeting, refused to comment on any specifics of CNOOC’s proposal.
It is believed, though, that one of the key stumbling blocks, so far as Harper’s cabinet is concerned, is the issue of reciprocity of investment. While Chinese companies could acquire 100% ownership of Canadian companies, Canadian companies cannot make similar investments in China. Canadian companies can buy Chinese companies only if they accept the Chinese government as an investment partner.
Meanwhile, there are many rock-ribbed Conservatives in Harper’s political base who object to the deal because they don’t like the idea that Communist China should have such influence in one of Canada’s most important industries.
But if the Harper government rejects CNOOC’s advances, there could be some unwelcome international repercussions. In all his foreign travel over the past two or three years, Harper has been at pains to insist that the world and Canada will be better off economically with lowered barriers to investment and trade. If, after preaching the virtues of free trade to foreign investors, his government blocks a deal, some of the investment Canada needs to grow could disappear.