NDP MP questions decision, timing of Nexen bid review extension
Published Saturday, November 3, 2012 9:42AM EDT
Last Updated Saturday, November 3, 2012 10:08PM EDT
The New Democrats are questioning why the Conservative government would choose a Friday evening to suddenly announce it would be extending its review of a Chinese company’s bid to take over Canadian oil producer Nexen.
Industry Minister Christian Paradis issued a news release Friday night saying the government was extending the review until Dec. 10 “so the required time will be taken to conduct a thorough and careful review of this proposed investment.”
New Democrat MP Peter Julian finds the timing of the release interesting.
“This seems to be a pattern of this government that they’re making announcements on a Friday evening,” Julian told CTV News Channel Saturday.
“Any time a government makes an announcement at that time of the week, it’s because they know that the public is not going to receive that news positively.”
State-owned China National Offshore Oil Co. (CNOOC) announced in July that it wanted to buy Calgary-based Nexen, which owns oil sands and shale gas.
Under the Investment Canada Act, the federal government has to review the bid to determine whether the takeover would bring a "net benefit" to Canada. The initial 45-day review period had been set to end Nov. 10.
Paradis said in his release that “extensions to the review period are not unusual.” But Julian says it appears the government wants to “rubber-stamp” the controversial $15.1-billion deal, and is trying to buy time because of growing public opposition.
He says the federal review process has already been too secretive.
“There are a whole range of issues surrounding this deal, and what we expect the government to do is hold public consultations and define clearly what the ‘net benefit’ clause means in relation to this takeover,” he said.
“What we’re seeing is a government that’s hiding, that’s being very secretive about this deal.”
Julian also suggested that with the review now slated to run until mid-December, the plan may be to quietly announce approval when Canadians are distracted.
“The fact that they’re putting off the deadline to the Christmas holidays is worrisome. What it may show is that the government is yet again trying to make a decision behind closed doors, and trying to announce it at a time – the Christmas season -- when they think that the people are paying less attention,” he said.
Some analysts warn that the government's handling of the issue could send the wrong message to the world.
“A second delay sends a signal, and I have seen some concern in the investment community overseas -- is Canada really as open for investment as it claims to be?” Gordon Houlden of the University of Alberta China Institutetold CTV News.
After CNOOC announced its takeover plans, concerns were immediately raised about the idea of turning over Canada’s precious natural resources to a Chinese state-owned company.
The NDP has said the proposed deal raises many questions, including whether CNOOC will protect jobs and keep Nexen’s head office in Canada. As well, they say it’s unclear how Canada’s environmental standards will be enforced.
The NDP is also concerned about what the deal might mean for national security. Canada's spy agency CSIS warned in its annual report this year that foreign investment by state-owned firms can pose security concerns, though it didn't mention China specifically.
Prime Minister Stephen Harper, who has made international investment a cornerstone of his economic policy, has acknowledged the Nexen bid "raises a range of difficult policy questions."
CNOOC has already publicly pledged to keep Nexen’s head office in Calgary, seek a listing on the Toronto Stock Exchange and place $8 billion of its assets under the control of Nexen's management in Canada.
It has also promised to carry on Nexen's social responsibility programs in Canada and around the
The deal would be the largest foreign takeover in Canadian history.
With a report from CTV News’ Richard Madan