Should Canada allow foreign state owned companies to buy Canadian resource companies?

[Rerun]

Should Canada allow foreign state owned companies to buy Canadian resource companies? I say no.

http://www.cbc.ca/news/business/stor...ergy-deal.html

Energy company upset feds blocked Malaysian takeover
Rejection puts B.C. liquefied natural gas plant in limbo

Calgary-based Progress Energy Resources says it's disappointed the federal government blocked a multi-billion-dollar bid by Malaysia's state-owned oil company Petronas to take it over.

[polak]

Don't worry, if demand ever gets to a critical point, other countries won't be messing around with "business" take overs and start to try and use force. That'll be fun.

[Table 5]

I think it's very short sighted to let non-Canadian companies take control of the one resource that we have that gives us power on the world stage.

[Azure]

I honestly don't know. Part of my problem is that the government doesn't seem to want to be overly transparent about it. What are the actual concerns? I think they should have to educate the public as to why they are blocking these deals.

Someone mentioned in a different thread that there is nothing stopping China or any other country from starting their own company here instead of buying one like Nexen. Seems to me that we are giving away years of expertise to the Chinese when it is that expertise giving us an advantage on the world stage.

[Sylvanfan]

It seems that we are against having our own state owned companies competing in the business, so why would we allow other state owned companies? When it comes to finite resources....I say don't sell it for a quick buck today. Eventually private enterprise will find a way to make it worth their while. In a globalizing economy, I think we'd be losing a lot if we allowed foreign states to gain control of a large chunk of our resources.

[Azure]

Originally Posted by Sylvanfan

It seems that we are against having our own state owned companies competing in the business, so why would we allow other state owned companies? When it comes to finite resources....I say don't sell it for a quick buck today. Eventually private enterprise will find a way to make it worth their while. In a globalizing economy, I think we'd be losing a lot if we allowed foreign states to gain control of a large chunk of our resources.

We still get the same amount of royalties from Chinese owned companies that we would get from Canadian owned companies. Where they take the profit is a different question though.

I think the bigger concern is freely giving them the expertise for a price. The know how that Nexen has is a lot more worth than a measly $14-$15 billion. China doesn't want to buy these companies to make money. They want to buy them to poach our technology and apply it at home. And as a Canadian I think we should hold on to the advantage we have in terms of being very far ahead in resource development.

[Sylvanfan]

Well the Royalties are the same...can you or I invest in a Chinese, or any other foreign state owned company to try and benefit from any profits? Plus, the point of them gaining access to expertise through a state owned company doesn't sit well with me. At least with the U.S or British private investment, I still have a chance to buy shares in that company if I chose.

[Azure]

Yeah, when you look at it that way I agree.

I think if you draw the line at state owned companies you would be much better off. I don't really care about the profits, but I think selling off our expertise is a serious problem.

[bizaro86]

Originally Posted by Azure

We still get the same amount of royalties from Chinese owned companies that we would get from Canadian owned companies. Where they take the profit is a different question though.

I think the bigger concern is freely giving them the expertise for a price. The know how that Nexen has is a lot more worth than a measly $14-$15 billion. China doesn't want to buy these companies to make money. They want to buy them to poach our technology and apply it at home. And as a Canadian I think we should hold on to the advantage we have in terms of being very far ahead in resource development.

Can you provide an example of Nexen using special know-how to be more successful than any other oil company? If the Chinese just wanted knowledge they could poach 100 percent of nexens employees for a hell of a lot less money.

If we don't allow takeovers of our oil companies, the price in the market of our other oil companies will decrease, maybe to the point where they can't raise capital. If we cant raise capital, there will be no more development no matter how smart Canada's professionals are.

[Rerun]

Originally Posted by bizaro86

Can you provide an example of Nexen using special know-how to be more successful than any other oil company? If the Chinese just wanted knowledge they could poach 100 percent of nexens employees for a hell of a lot less money.

If we don't allow takeovers of our oil companies, the price in the market of our other oil companies will decrease, maybe to the point where they can't raise capital. If we cant raise capital, there will be no more development no matter how smart Canada's professionals are.

My problem is with takeovers by foreign state owned companies. In effect we are allowing foreign countries to buy up and control Canadian businesses which is particularly scary when it comes to Canadian natural resources.

[Azure]

You don't agree that the technology Alberta oil companies use to extract oil/gas is much further advanced than anything Chinese owned companies operating in China have?

Also not sure how you think they could poach Nexen employees either without actually buying the company. That is why they put in a premium bid.

[Rerun]

Originally Posted by Azure

You don't agree that the technology Alberta oil companies use to extract oil/gas is much further advanced than anything Chinese owned companies operating in China have?

Also not sure how you think they could poach Nexen employees either without actually buying the company. That is why they put in a premium bid.

Ya... how many Nexen employees that employed in critical technology fields would want to move to China?

[vektor]

As someone who directly studies resources (geophysics) my opinion is hell no. Our resources are everything, the gain we get now cripples us for generations. I think most people in this country take our resource advantage for granted, the less other countries have control over our resources the better off we'll be in 100 years. I'll be disappointed if the Chinese and the U.S. keep gaining control, there are some greedy people making impulsive decisions that will screw our grandchildren over terribly.

[vanisleflamesfan]

Well, Harper just signed the “Canada-China Foreign Investment Promotion and Protection Agreement”. It is set for automatic approval on October 31 with no discussion in Parliament, no debate, and no vote (although Rerun will like that).

The Agreement gives Chinese state owned companies the right to sue the Canadian government over any decisions that limit or reduce their "expectations of profits", and will be able to claim damages against Canada for decisions made at any level of Canadian government. The agreement allows Chinese companies to challenge Canadian laws if they might reduce the profits of Chinese companies. Additionally, these challenges won’t be settled in Canadian courts, but rather in secret arbitration hearings, so future governments may be forced to change our laws without us ever knowing why.

So basically, “Hi China, take anything you want”.

The Harper government seems to be bending over backwards to make some quick profits from the sale of our resource companies to China.

[ThePrince]

Originally Posted by Azure

You don't agree that the technology Alberta oil companies use to extract oil/gas is much further advanced than anything Chinese owned companies operating in China have?

Also not sure how you think they could poach Nexen employees either without actually buying the company. That is why they put in a premium bid.

I think a lot of the technology that's used here for production wouldn't necessarily be applicable in China, so I don't think that's the problem. I think China is simply trying to get their foot in the door of a massive resource (oil sands). They see that it's a big part of the future of energy, so they want to get a piece of the pie.

[aaronzaski]

Originally Posted by Azure

You don't agree that the technology Alberta oil companies use to extract oil/gas is much further advanced than anything Chinese owned companies operating in China have?

Also not sure how you think they could poach Nexen employees either without actually buying the company. That is why they put in a premium bid.

or pull a PetroChina - enter into negotiations with Encana, learn the technology and their processes and then run off giggling into the sunset.

[Rerun]

Originally Posted by vanisleflamesfan

Well, Harper just signed the “Canada-China Foreign Investment Promotion and Protection Agreement”.

The Agreement gives Chinese state owned companies the right to sue the Canadian government over any decisions that limit or reduce their "expectations of profits", and will be able to claim damages against Canada for decisions made at any level of Canadian government. The agreement allows Chinese companies to challenge Canadian laws if they might reduce the profits of Chinese companies. Additionally, these challenges won’t be settled in Canadian courts, but rather in secret arbitration hearings, so future governments may be forced to change our laws without us ever knowing why.

Yes, this does make me nervous. I think Harper has received poor advice on this. We need a trade agreement with China but not one like this.

Here's a very good article on the agreement.

http://www2.macleans.ca/2012/09/27/c...he-fine-print/

[VO #23]

The amendments made by the Conservative Government to our federal Competition Act making it much tougher for these type of takeovers to happen is one of the few policies they've brought forth that I've supported.

[vektor]

Originally Posted by vanisleflamesfan

Well, Harper just signed the “Canada-China Foreign Investment Promotion and Protection Agreement”. It is set for automatic approval on October 31 with no discussion in Parliament, no debate, and no vote (although Rerun will like that).

The Agreement gives Chinese state owned companies the right to sue the Canadian government over any decisions that limit or reduce their "expectations of profits", and will be able to claim damages against Canada for decisions made at any level of Canadian government. The agreement allows Chinese companies to challenge Canadian laws if they might reduce the profits of Chinese companies. Additionally, these challenges won’t be settled in Canadian courts, but rather in secret arbitration hearings, so future governments may be forced to change our laws without us ever knowing why.

So basically, “Hi China, take anything you want”.

The Harper government seems to be bending over backwards to make some quick profits from the sale of our resource companies to China.

f'ing god damnit, I used to think Harper knew what he was doing with economics.

[JohnnyB]

Certainly not. China buying companies with access to Canadian resources will do no good for most Canadians. China is an extremely resource hungry country and does not believe in playing by the same rules as everyone else. Technology and expertise will be stolen, and if controlling interests are allowed then corrupt practices are all the more likely to appear, undermining stability of more than just the resources.

Chinese companies cannot be trusted essentially because the rules of business are so different here and because there are no controls over businesses here, especially state-run businesses, which can be relied upon to prevent corruption.