Another big bite out of Canada?

Politicians silent as a corporate giant again poised to leave Canadian control

Dear activists,

Please see the Toronto Star business column (Another big bite out of Canada?, May 8, 2007) which reports, "If it succeeds, yesterday's announced $33 billion (U.S.) hostile takeover bid by New York-based Alcoa Inc. for Alcan Inc. of Montreal would mean that Canada's three largest mining companies, employing 91,000 Canadians, will be controlled by foreign interests."

It also states, "If there's to be a tipping point at which politicians and public opinion finally balk at foreign takeovers – after the recent loss of domestic stewardship of Dofasco Inc., Hudson's Bay Co., Abitibi-Consolidated Inc. and other commercial icons – this may be it. Alcan is Canada's eighth-largest company, and fifth-largest Canadian-controlled firm, with 64,700 employees, annual revenues of $24 billion and assets of close to $30 billion."

Curiously the column notes, "Speculation has already begun that Premier Jean Charest, reduced to a minority in the last election, and Prime Minister Stephen Harper, keen to improve on the 10 Quebec seats his Tories now hold in the next federal election, will raise objections to the deal...(As well) an increasing number of prominent Canadian business leaders have begun to decry the threat to economic sovereignty posed by Canada's open-door policy on foreign takeovers, which has no equivalent among fellow G-7 nations with the possible exception of Britain...Among those sounding the alarm are Gordon Nixon, CEO of Royal Bank of Canada; Peter Munk, founder and chair of Barrick Gold Corp...and Dominic D'Alessandro, CEO of Manulife Financial Corp."

Even today's Globe and Mail editorial states, "As leading Canadian companies fall into the hands of foreign acquirers at an alarming rate, the silence from Ottawa has become deafening...Potential bidders (for Alcan) could have been Canadian. A combination of domestic nickel giants Inco and Falconbridge would have had the financial wherewithal to acquire Alcan and build a powerful Canadian player in the global resource arena. Instead, the two Canadian mining companies ended up in foreign hands, and Alcan could go the same way, because the Conservative government of Prime Minister Stephen Harper has offered no coherent plan to safeguard Canada's strategic industries. Indeed, it has yet to signal whether it considers any industries vital to this country's future and hence essential to keep under Canadian control... Does the government have any views at all on the massive shift of ownership offshore and the impact this will have on Canada's economic future? Do the Conservatives think it's a good thing or a bad thing? Are they willing to leave the doors wide open in all but the small number of industries such as banking, transportation and communications where ownership restrictions still apply? We don't know, because the government isn't saying."

On April 21, Council of Canadians trade campaigner Jean Yves Lefort was quoted in the Toronto Star saying, "Basically, this has been going for 20 years...We link it to the policies over the past two decades of liberalization and free trade, and now it's the security and prosperity partnership...There's just been a whole series of policies of saying, `We`re open for business and it's a free market and anything goes...And there is no effective review of any investment in Canada looking at which companies are buying out whom and for what reason and is that good for Canada...That agenda has been going on from one Conservative government to the next Liberal government and back to the Conservatives again. So, somehow we should be surprised that Canadian companies are being bought by foreign – and particularly American – companies?"

According to the Toronto Star report below, "Since the beginning of last year, there have been about 600 foreign takeovers of Canadian firms, worth more than $150 billion (U.S.)..."

Brent Patterson, Director of Organizing, The Council of Canadians