Ruling re: govn''t. freeze
Juliet O’Neill, CanWest News Service
Published: Monday, May 28, 2007 Article tools
Printer friendly
E-mail
Font: * * * * OTTAWA - The government rejected a Liberal proposal Monday to freeze foreign takeover approvals for three months while independent experts review the law governing such acquisitions of Canadian firms.
Prime Minister Stephen Harper told the House of Commons that, as promised in the last federal budget, the government is already in the process of setting up a panel to review the Investment Canada Act and other laws affecting Canadian competitiveness. In the meantime, he said, foreign investment will continue in Canada, as will Canadian investments abroad.
At a news conference earlier Monday, Dion called for establishment of a blue-ribbon panel of experts to study the investment act and to impose a moratorium on approvals of foreign takeovers of Canadian businesses in the meantime.
“Recent developments suggest that in some areas the act may be tilted against both Canadian companies and the national interest to create global champions,” Dion said.
Dion singled out the U.S. company Alcoa’s recent hostile takeover bid for Alcan in suggesting one issue the panel could address: whether there should be reciprocity in takeover hurdles.
“Alcoa’s home state of Pennsylvania has rules that would make it extremely difficult for Alcan to take over Alcoa,” he said. “Since Alcoa comes from a jurisdiction that protects it from takeover, it must be determined whether Alcoa should face tougher rules in Canada when it seeks to take over Alcan.”
But Industry Minister Maxime Bernier told reporters that the existing foreign takeover review act will remain in force while the government’s yet-unnamed panel reviews the law and prepares a report in time for the next federal budget. The panel would be set up in a month or two.
“We won’t change the act in the near future,” Bernier told reporters, when asked whether foreign bids for Alcan Inc., Canada’s largest aluminum company, would be affected by the review. “We’re going to await the recommendations.”
The New Democratic Party, which seeks public hearings in all takeover proposals, urged skepticism about the aims of both the governing Conservatives and the opposition Liberals, given that none of 11,501 foreign acquisitions of Canadian companies was rejected by either party in power between 1985 and 2005.
NDP Leader Jack Layton told reporters that the Liberals’ proposed moratorium could backfire by stifling debate and negotiation. On the contrary, he said, public hearings should be held on the impact of a potential purchase of Alcan, a pillar of the stock market and the job market.
“To simply put on the brakes and not have any discussions could turn out to have negative consequences,” Layton said. “What we believe is you should look on a case-by-case basis and negotiate hard and put firm and strong conditions in place. The Liberals didn’t do that. In 13 years they couldn’t find even one takeover to turn down. Not one out of thousands.”
Concerns about foreign control of the Canadian economy have been reawakened by the current bids for Alcan, along with a string of sales to foreign buyers of big-name Canadian companies such as Inco Ltd., Dofasco Inc., the Hudson’s Bay Co.
Ottawa Citizen
© CanWest News Service 2007