Business deals, Harper-style

Business deals, Harper-style
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One of the more cynical side-effects of playing democratic politics in era as philosophically malleable as ours is that a politician can very easily spend the twilight of his career getting blasted for backing policies he initially made his name opposing.

In Stephen Harper’s early years as prime minister, for example, the conventional wisdom held that he was something of a Sinophobe. In the winter of 2006 in particular, the fresh-faced PM absorbed a lot of opposition arrows for supposedly “harming” Chinese-Canadian relations in various ways, mostly by acknowledging the human rights abuses of the People’s Republic in louder language than any of his predecessors.

Clearly this Harper guy is some sort of small minded, red-baiting bigot, said the NDP. The man has no appreciation whatsoever for the fact that Canada’s economic destiny is inseparably tied to this rising superpower, said the Liberals.

Flash forward six years later. The Prime Minister has formally approved the sale of the Albertan oil firm Nexen to China’s state-run Chinese National Overseas Oil Corporation (CNOOC). Opposition response? Harper’s getting far too “cozy” with the commie dictatorship.

“The majority of Canadians clearly indicated that they were opposed to the deal,” scolded a press release from the NDP leader, “due to CNOOC’s poor human and environmental rights record.”

The entire transaction suffered from a “complete lack of transparency,” added Liberal boss Bob Rae. A transaction this ominous deserves some serious ‘splainin, Mr. PM, he thundered in Parliament.

The proposed Nexen sale has been a huge hot-button in Canada ever since the Chinese government first expressed interest in buying the Calgary firm this past summer. In a country as small and perennially insecure as this one, after all, any high-profile deal involving proposed “foreign ownership” of industry — especially when said industry involves natural resources in some way — rarely triggers anything less than a full-on explosion of national paranoia and anxiety that a new age of colonialism is just around the corner.

What’s uniquely interesting about the Nexen drama, however, is that the critical role of Canada-devouring imperialist boogeyman, a spot long held by the United States, has now evidently passed to China. The liberal political parties, unions, and leftist think-tanks are all using the same tired boilerplate about the dangers posed by “foreign control of vital industries” they’ve been throwing around since the FTA — only now their sweeping demonizations of “the Americans” have been swapped effortlessly for a demonization of “the Chinese.”

And to be fair, this re-routed ire may actually represent progress. Overblown rhetoric or not, there’s still a lot about China that’s frankly worth demonizing. They shoot students, jail peace prize laureates, harvest dissident organs, arm African warlords… basically they’ve consistently been on the wrong side of every major human rights issue — both domestic and foreign — for most of the last century. What exactly Canada has to gain from expanding the wealth and power of their state, is, as Bob Rae said, extremely unclear, while what we have to lose is considerably less so.

The Canadian intelligence agency, for instance, has long warned that Canada is one of the western nations most infiltrated by Chinese spies, even specifically noting that state-owned enterprises “with close ties to their home governments” — as CNOOC clearly is — pose a unique threat.

Is profit and investment “diversification,” the supposed justifications of selling Nexen to China, really causes worth the risk? Only a PM blinded by the sort of anti-American Sinophilia that’s fashionable in some progressive circles these days would think so, and until very recently, Harper wasn’t supposed to be that kinda guy.

Not that we ever really know what kind of guy he is, of course. Which leads to the other layer of obtuse irony on this whole episode: the fact that Canada’s supposedly conservative prime minister continues to jealously guard the arbitrary and decidedly anti-free market powers that put him in charge of approving the Nexen sale in the first place.

See, under the vague terms of the Canadian Investment Act, the federal government is given the broad authority to have final word over any significant business deal that involves a corporation switching from Canadian to foreign hands. Formally, the yea or nay is supposed to come after the feds carefully consider whether the sale garners a Canadian “net benefit,” but as many, many critics have noted, Ottawa’s interpretation of “net benefit” never conforms to any consistent human logic (beyond crass protectionism) with Harper particularly unpredictable and erratic in his definitions.

As I noted in a comic a couple years ago, Harper twice vetoed investment deals from allies vastly less problematic than China (Australia and Dubai) angering much of his free-market base in the process. Clearly aware of this troubling track record, in approving the Nexen deal the PM thus had to cobble together some incoherent rigmarole about how this latest decision proved he was, finally, firmly on the side of the unbiased free market when it came to international commerce — yet also uniquely concerned about state-run corporations, which are different and problematic, yet not in the case of the CNOOC specifically, but anyway I’ll know trouble when I see it and I’m keeping my veto powers.

For anyone who broadly subscribes to a philosophy of free trade and free markets, international commerce can present a deeply complicated moral dilemma. To what extent should rational business transactions between sovereign corporate actors be subordinate to national (which is to say, state) security and strategic concerns, and to what extent should the state itself be empowered to ensure private enterprise does not use trade to harm its country’s larger (which is to say, non-financial) interests?

It’s a very difficult question to answer without compromising certain values in the pursuit of others.

If you’re the leader of a government founded on compromised values and intellectual incoherence, however, I imagine it’s lot easier.


  1. OldsVistaCruiser

    Isn't it coincidental that CNOOC looks very much like the term, "Canuck"?

  2. ThePsudo

    That middle panel is amazing. I love when you draw comedic exaggerations of drama.

  3. Earl Von Tapia

    Looks a little like Phoenix Wright to me.

  4. AddThrteeAndFive


  5. airplaneing

    in the first panel Harper takes of his reading glasses to reveal…another pair of glasses!

  6. J.J. McCullough

    I like the idea of characters who have eyes that exist in some ambiguous state between glass and eyeball.

  7. Nick Wood

    I love the Pheonix Wright reference.

  8. Guest

    When philosphy and pragmatism collide it is usually philosophy that bends.

  9. Jake_Ackers

    The problem is Harper compromised in the wrong way. In a truly free market transaction the following would of happened:

    A) Foreign private Company buys Nexen: Canadian Gov't stays out of it (or as much as possible a gov't can anyway)

    B) Foreign Gov't back company/foreign Gov't buys Nexen: Canadian Gov't should say no way

    Both outcomes satisfy the left and the right and it is still free market. Why? Because it is the job of gov't to ensure that civil rights and liberties. Having a foreign gov't take over is not a free market solution, it's just gov't regulation by proxy. No gov't should be sticking it's finger in the free market to this extent would be the message. After it's free market not anarchism.

    Didn't the US have a similar problem with the Dubai Ports World controversy? The problem was a gov't taking it over, not so much foreigners. After all, 80% of use ports are foreign owned.

    Moreover, the left saying Harper is being anti-Chinese is a load and a half. When referring to China, you most likely are referring to it's govt. Not like there is much of a difference considering how the Chinese gov't operates. It's not like he was speaking out against individual Chinese people.

    What is hypocritical though is that the Left in Canada will criticizes Harper for being so strong on human rights but when the shoe is on the other foot, they criticize him. All parties in opposition always sound like they take a position just to be contrarians. That's what the Left is sounding like in respect to Harper and China.

  10. ThePsudo

    Under your A&B scheme, how is it determined whether a government has the jurisdiction to object to the nationalization of a company? If a foreign company buys a native company and moves most of it's employees and brick-and-mortar infrastructure into another country, what grounds does the domestic government have to object to the nationalization of what is plausibly described as a foreign company?

  11. Jake_Ackers

    A foreign company taking over, under a free market system, there can't be an objection by Canada. As in situation A. If a private South Korean or a private Japanese company was buying Nexen, it wouldn't be a problem.

    However, that isn't the situation because every company in China is backed by the Chinese gov't or controlled by it in some way. The problem is foreign GOV'TS, not foreign private companies themselves. Note, gov'ts is the problem, not foreigners.

    The Nexen situation isn't an outsourcing situation, that would be more so with manufacturing, this is about natural resources. A foreign PRIVATE company taking over a natural resources company is not a threat as you can just nationalize. Although, a foreign gov't taking over is a problem for multiple reasons, but that is another discussion.

    The situation you describe, I think, resembles more the Hummer/China and Chrysler/Fiat cases. For example, lets say China had bought Hummer and shipped everything to China. I know that is a military based vehicle but its being phased out anyhow. So it's not really a problem in respect to that one issue.

    In the case of Hummer there could be two views (again assuming a Chinese Gov't backed company bought it):

    A) Objection! Because it's a foreign gov't controlling a private company. Or w/e is akin to Harper's position.
    B) Okay! That would mean that simply put, the US isn't creating a market worth of China keeping the company here.

    Position A would only be valid if its a natural resources company not if its just manufacturing. Furthermore, if the market does create good conditions for business then the company wouldn't have to be outsourced.

    Fiat on the other hand is a private company which happens to be in Italian, so not much of problem there. However, again two situations could of happened.

    A) Chrysler gets take over only to outsource it to Italy. The unions could object.
    B) Chrysler gets taken over but keeps manufacturing in the US. Nationalist would object.

    Either objection is a wrong because under a free market system this is just saying that the gov't isn't creating conditions for growth. Whether its manufacturing in the US or not having a strong enough domestic company to buy it.

    All in all there are very narrow situations in which a gov't can object in a free market system. Primarily because of monopolies but also with national security. The Dubai situation was a national security threat, to have a foreign GOV'T own it. After all like I stated before, most ports are already foreign PRIVATELY owned and that isn't a problem.

  12. Hentgen

    I wouldn't count Dubai among "less problematic" allies of Canada, as they trick people to go there as labourers and then enslave them and help fund terrorist organizations.

  13. fashion news

    A foreign company taking over, under a free market system, there can't be an objection by Canada. As in situation A. If a private South Korean or a private Japanese company was buying Nexen, it wouldn't be a problem