A long way from the policy issues to be tackled by the new Woolwich council, issues with far more consequences are playing out in Ottawa. Specifically, free trade talks with the European Union and a decision about the foreign takeover of Saskatchewan’s Potash Corp.
If his record is any indication, Stephen Harper will opt to sell out Canadian interests.
Harsh words? Maybe. But facts are facts.
The Harper government, reacting to public discomfort over the sale of high-profile Canadian companies to foreign interests, appointed a panel in 2007 to review Canadian policy on foreign takeovers. The country has just lost Alcan, one of the largest aluminum producers in the world. It joined a long list of resource-based companies – including Inco and Falconbridge – that now have foreign head offices.
Other iconic companies such as Molson, Labatt and Hudson’s Bay Co. are no longer Canadian. Since 2006, 700 more have joined their ranks.
Under Conservative government policy, only one takeover – the aerospace division of Vancouver-based MacDonald Dettwiler and Associates by a U.S. firm – has been turned down.
For Maude Barlow, chairperson of the Council of Canadians, the trend is clear.
“The debate over foreign control last peaked in 2007, amid a boom in mergers that saw some of Canada’s biggest companies acquired by outsiders. Rio Tinto took over aluminum producer Alcan, Xstrata absorbed nickel miner Falconbridge and Brazil’s CVRD — now Vale — scooped up Inco,” she recites. “In May, the Chinese state investment fund formed a partnership with Calgary-based Penn West Energy Trust to develop the firm’s oilsands assets in northern Alberta. State-owned PetroChina has also acquired a stake in two other oilsands projects and Sinopec, a nine per cent interest in oilsands miner Syncrude. In 2009, China’s investment fund also bought a share in Vancouver base-metals miner Teck Resources and Wuhan Iron and Steel invested in Consolidated Thompson Iron Mines and its Bloom Lake development in northern Quebec.”
In that light, it seems unlikely Ottawa will stop the $40-billion takeover of Potash Corp. by Australian mining giant BHP Billiton, the largest mining company in the world.
The foreign takeover of resource companies is a key issue in the debate over free trade.
Foreign companies have been snapping up control of resources on which we’re likely to be increasingly dependent given economic policies that seem intent on reducing us to hewers of wood and drawers of water.
In a report released this week by the Canadian Centre for Policy Alternatives, economist Jim Stanford predicts the loss of tens of thousands of jobs in this country if a free trade deal is struck with the EU.
Canada currently incurs large bilateral trade deficits with the EU – $15 billion in goods, and close to $4 billion in services – and Stanford expects those numbers to be much worse under free trade. Existing free trade agreements with the U.S., Mexico, Israel, Chile, and Costa Rica have resulted in an average annual growth in exports of 4.77 per cent, but an average annual growth in imports of 8.67 per cent. If those numbers are applied to trade with Europe, we’d be in an even larger deficit situation.
Worse still, much of what we export are raw materials, while much of what we import is profitable, value-added products. That too will worsen under a free trade arrangement, he maintains.
The effect on employment, primarily our already suffering manufacturing sector, would be negative. In the best-case scenario, there would be 28,000 jobs lost. In the worst, some 150,000 jobs would disappear.
“A free trade agreement with the EU will exacerbate Canada’s existing large bilateral deficit, at the expense of output and employment in many important sectors of the economy,” writes Stanford.
In short, an EU deal would continue a trend that has seen the loss of good jobs in favour of far less desirable service-based jobs, often part-time and tenuous. The payoff for a small minority would be big. The rest of us might “benefit” from slightly lower prices on a few products. Maybe.
If this current economic climate has taught us anything, it’s that unregulated and unchecked globalization has not been the panacea politicians and business groups sold us on. As with those pitfalls, Canadians are finally starting to take note that we’re losing control over resources, though the public outcry is muted. Still, we are aware these companies are changing hands, and the concern goes beyond pride of place – with the sales, profits head off to foreign offices, research and other high-paying administrative jobs go elsewhere, and decisions are made outside of the Canadian context.
Where in the 1970s and early-1980s, the government made some attempt to protect Canadian interests, those measures were thrown out the window by the Mulroney government, which eventually signed the free trade agreement with the U.S., paving the way for NAFTA. What happened next should have us demanding Harper put the brakes on any European adventures.