Friday, November 5, 2010

SDA posts a clanger on Potash

It's a rarity but small dead animals posted a clanger congratulating Industry Minister Tony Clements' on his decision to kibosh the BHP bid to take over Potash Corp.

Let's face it, this is all about politics - votes, pure and simple.  Wall is pandering to Sask voter socialist/nationalist sentiment and Harper is afraid of losing 13 Conservative seats.  It's embarassing watching conservatives attempting to rationalize it as something more

Peter Foster observes how Tory Agriculture Minister, Gerry Ritz (like sda and others) twists himself into a ridiculous pretzel trying to defend the decision, concluding:

... This is a bad deal for Saskatchewan and a bad deal for Canada. Potash shares have been robbed of any takeover premium since they have effectively been declared off limits to foreign buyers. Investment Canada rules now appear more opaque — or irrelevant — than ever. As usual, the most significant losses will be the invisible ones: the investments not made, the jobs not created.
And, moreover:

One knowledgeable observer to whom I spoke yesterday said that it was difficult to get worked up over the notion of Canada as a banana republic because other jurisdictions do similar things. But the fact that other countries practice destructive economic policies to court populist electorates and mercantilist executives should hardly be a source of comfort. Mr. Harper understands that. Within 30 days his government is going to have to pretend that it doesn’t.
Danny Williams must be smiling.


Blame Crash said...

I can't agree with you here. I'm just not "on" for the selling off of our country to the highest bidder.

They were attempting to do it for their own self interest and we told them to buzz off for the very same reason. Fairs fair I guess.

So what if hundreds of government owned or controlled companies from China or Saudi Arabia swooped in and bought Canadian companies lock stock and barrel. Would you still be whistling the same tune?

I'm not willing to accept we have to let everyone into Canada just because they want us to. That goes for both corporations and individuals.

Now, if they want to come to Canada to start from scratch and build their own damn potash company, then go right ahead.

But that would be too much work for these schemers. They can go back to where they came from and pound sand for all I care.

JR said...

Well, I guess that puts you in league with all the other protectionists who think, mistakenly, that Canada's being "hollowed out" by foreigners. Our country isn't being "sold off". In the case of potash it has always been sold by Potash Corp one carload at a time to whoever wants to but it - and that was when Potash was a Saskatchewan Crown Corp, after it was privatized and now when it's 52% foreign owned and controlled from Chicago HQ by it's American executives. Anyway the resource belongs to Saskatcewan no matter who digs it out of the ground and markets it. But now, all of a sudden, it's a "strategic" resource. What malarkey!

Do you feel the same about the need to protect other Canadian companies from foreign takeover, or is it just Potash Corp? Should other countries protect their companies from Canadian takeover? Where does that lead? Isolation.

Now on your point about government controlled companies attempting takeovers, I'm with you. Government ownership is a perversion of free market principles. And, unfortunately, the recent denial by governments of the POT buyout by BHP is a step in the direction of government control of a private company.