The government’s review of a Chinese state-owned oil company’s $15 billion takeover of Calgary-based Nexen Inc. could be extended, Industry Minister Christian Paradis said Wednesday.
The proposed deal has sparked controversy over the role Chinese oil companies could play in Canada. Concerns range from undue influence over the Canadian government to the long-term impact of Chinese state investment in Canada’s natural resources.
Supporters of the takeover say massive foreign investment is needed to develop Canada’s oil sands and China is ready and willing to put billions into play.
The Tories have faced criticism over the opaque nature of the foreign takeover review process. Revisions to the net benefit guidelines in the Investment Canada Act are expected in tandem with the government’s decision on the deal.
Under the act, the government has to weigh whether a foreign takeover of a Canadian firm over $330 million constitutes a net benefit to Canada. Critics challenge that the net benefit criteria are too vague to be objectively assessed.
The original November deadline for the review of China National Offshore Oil Corp.’s (CNOOC) takeover of Nexen has already been extended to Dec. 10.
“It could be extended. All I can say is that it’s under review,” Paradis told reporters Wednesday.
Paradis said he would not say more given how sensitive the market is to the deal.
A decision on the review is pending as the government pauses before ratifying an investment deal with the Chinese regime that would stand for a minimum of 31 years.
Like the CNOOC takeover, the Canada-China Foreign Investment Protection Agreement (FIPA) has raised wide-ranging concerns. Critics say the deal is one-sided in China’s favour while supporters say Canadian investors require some legal recourse for their activities in China.
The government says the FIPA would increase economic cooperation between the two countries.
But without debate in the House of Commons or a public review of the deal, NDP trade critic Don Davies says it is impossible to guarantee the FIPA is good for Canada.
CNOOC’s bid to take over Nexen has raised concerns about the company’s history, including a litany of human rights abuses in Burma and China, where CNOOC used security personnel to detain Falun Gong adherents and send them to detention and brainwashing centres, say Falun Gong adherents in Canada.
Tibetan groups also oppose the takeover due to CNOOC’s active role in displacing Tibetan nomads in central Tibet.
A government source told Bloomberg in October that Canada was asking the Chinese regime to approve several investments in China, possibly by financial firms, in return for approving the CNOOC deal.
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