Mining Stocks
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Why do we need to do this? It confounds me to think that the average Canadian believes that this would benefit them and that the government has their best interest in mind in approving this move.

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To access my current posts, click the following link:
Notes From a Cyber Trader

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- Federal Election -

Tories vow easier takeovers

TheStar.com

New rules would lift limits on foreign ownership of airlines, uranium mines, PM says

September 13, 2008
Bruce Campion-Smith
Ottawa Bureau Chief

HALIFAX–A re-elected Conservative government will relax the rules on foreign investment, including measures to encourage more foreign ownership of Canada's airlines and uranium mining, Prime Minister Stephen Harper says.

Harper announced the proposed moves yesterday, saying that global competition is vital for the country's future prospects. But he's proposing a new national security review to ensure foreign takeovers don't compromise Canada's interests.

"We are a party of free enterprise, free markets and free trade," Harper said in a breakfast speech to the Halifax Chamber of Commerce.

"But we also believe a government needs to be able to draw the line when (a) foreign takeover would jeopardize our national security," he said.

Under the Conservatives' proposal, only foreign deals worth more than $1 billion would be subject to federal review, up from the current threshold of $295 million.

The Conservatives are also proposing to make it easier for foreign companies to invest in Canada's airlines.

Currently, foreign companies are only allowed to own 25 per cent of domestic carriers, but that would move to 49 per cent, subject to "bilateral negotiations" with other nations.

As well, Harper wants to relax restrictions around ownership of Canadian uranium mining, provided that they meet a "national security test."

The Prime Minister said the current threshold that requires many foreign takeovers to undergo a federal review has sent a signal to the world that investment in Canada is "difficult," even though Ottawa approves virtually all of the deals.

Yesterday's measures follow the recommendations of a blue-ribbon federal panel this summer, led by former business executive Lynton (Red) Wilson, urging an overhaul of Canada's approach to foreign investment.

NDP Leader Jack Layton condemned the Harper government for allowing Canadian industries to be sold off to foreign interests.

"The law says that foreign takeovers should only be approved if they are in the interest of Canada. And what we have seen the Harper government do is authorize sell-off after sell-off," Layton said during a stop in St. John's, Nfld.

Liberal Leader Stéphane Dion said Canada needs strong rules that will protect the national interest in foreign buyouts of Canadian companies.

"I think it's very important to have a national interest standard," he said in a news conference in Burnaby, B.C.

While Harper suggested the moves would throw open the doors to new investment, in reality, the proposals to relax the rules for airlines and uranium miners are contingent on Canada winning reciprocal deals with other countries. The country's two major airlines – Air Canada and WestJet – both said they would welcome a relaxing of foreign ownership limits.

"Increased foreign ownership will provide Canada's airlines with enhanced access to capital," said Peter Fitzpatrick, an Air Canada spokesperson.

Similarly, WestJet spokesperson Robert Palmer said: "Any initiatives that enable or attract further investment in Canada are worthwhile."


With files from Les Whittington, Richard Brennan and Chris Sorenson