Amy Minsky, Global News/The West Block : Sunday, November 18, 2012 11:00 AM
HALIFAX — U.S. Senator John McCain is calling for Parliament to hold open discussions on a Chinese companys $15-billion bid to take over Nexen, an Alberta oil firm.
So far, all discussions have taken place away of the public eye, and the Conservative government has already twice delayed its decision as it continues weighing whether the transaction will have a net benefit for Canada.
McCain made the comment during an interview on the Global News program The West Block with Tom Clark, when asked for his view on the possibility of state-owned Chinese National Offshore Oil Company having a stake in Albertas oil sands.
I think thats a judgment that the Canadian government has to make, he said from the Halifax International Security Forum. I think its also a role for the legislative body to hold hearings, to get witnesses and say, OK what is this all about?
Two benefits that come with public hearings are media coverage and public education — but when cabinet makes the decision behind closed doors, that exposure is lost, he said.
Im very hesitant, given the gridlock that prevails in the United States, to give any advice, McCain said. But one thing that I think might be helpful to me, even, would be some hearings in Parliament as to exactly what this means and exactly the impact it would have.
Swirling around the bid proposal are many questions regarding potential risks Canada might open itself to if the deal is approved.
Those concerns are based on several factors including the fact that the state controls Chinas economy and the currency is set artificially, as well as a CSIS report from earlier this year that found that state-owned enterprises buying large portions of the Canadian economy can pose a threat to national security.
If the CNOOC Ltd. takeover is approved, however, it would bring billions of dollars into Canada.
But there has been some push-back from the United States.
At issue are Calgary-based Nexens five royalty-free holdings in the Gulf of Mexico. The stakes were acquired between 1995 and 2000 — when oil prices were low — in exchange for deep-water drilling.
Earlier this year, Democratic House of Representatives member Edward Markey issued a letter to the treasury secretary urging him to block the transfer of Nexens five leases to CNOOC.
A handful of Republican senators have also come out against the takeover, citing security concerns, as has former U.S. governor Howard Dean.
Last month, former U.S. ambassador to Canada Gordon Giffin said he thought it unlikely the U.S. government would approve the transfer of royalty-free leases to another government.
McCains advice for open hearings, however, comes as a bit of a surprise to Alberta premier Alison Redford.
I find that a very interesting comment, to have a legislator from one jurisdiction telling another jurisdiction how do their work when, quite frankly, thats not the approach they take in their own jurisdiction, she said while appearing on The West Block.
But what I would say is that Canadians have always had an awful lot of confidence with respect to the process that we have in place, she said.
Redford said she is hopeful and optimistic that the deal will go through, because I think it is the right thing for Canada.
If it is approved, details on the transaction will become publicly available, she said.
So I have no doubt that … everyones going to be able to be satisfied, she said.
McCain, of course, accepts that the decision lies with the Canadian government, but is nonetheless urging Prime Minister Stephen Harper and Industry Minister Christian Paradis to consider the substantial impact CNOOC could have on Canadas economy.
The Canadian economy is good. It is much better than the United States, and yet it is a much smaller economy, he said. So I think the government has to take into consideration how big an impact and how big a role this company would play in the Canadian economy. I think thats a judgment that only elected leaders can make.
In September, shareholders at Nexen voted in favour of the takeover, but the ultimate decision on whether to approve or deny the deal sits with the federal government.
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