Canada has not "become Venezuela" over BHP: Clement

By David Ljunggren

OTTAWA (BestGrowthStock) – The decision to prevent Anglo-Australian mining giant BHP Billiton from taking over Potash Corp does not turn Canada into Venezuela, Industry Minister Tony Clement said on Thursday.

Clement’s shock move on Wednesday stunned markets and prompted accusations that he had acted to defuse widespread unhappiness over the deal in Western Canada, where the ruling Conservatives derive much of their support.

The minister bristled when asked if his actions meant Canada was now somehow closed for business and if the decision would deter foreign investment.

“I think that’s ridiculous. You can’t say we’ve become Venezuela because of one decision … what investors want is certainty. They want to know what the rules of the game are,” he told Reuters in an interview.

Clement vetoed BHP’s hostile C$39 billion bid under the terms of the Investment Canada Act, saying it would not be of net benefit to Canada. BHP can submit a renewed proposal if it wishes, but Clement made clear he had no regrets.

“There is a procedure where the company can make representations if they so choose. All I can tell you is that I’m satisfied that my decision is the right decision,” he said.

The veto hit Potash shares and prompted critics to complain Clement’s motives had been political and he had been acting under pressure from Prime Minister Stephen Harper, who is famous for the tight control he exerts over Ottawa.

Clement revealed for the first time that he had consulted with Harper but insisted the decision was his and his alone.

“It does ruffle my feathers when people say…the principled thing would be to say yes and the political thing would be to say no,” he said. “I (found) reasons within the act to say ‘No’ to the bid that are part of the analysis of net benefit to Canada.”

The government now seems set to review the Investment Canada Act, which lays down conditions to allow.

Opposition parties say the act is too vague and secretive. They also complain foreign firms seeking to buy Canadian companies often agree to maintain jobs and production levels and then break their word once the takeover is complete.

“I think that as a matter of course in most instances those kinds of undertakings should be public and that’s one example of something that could be improved in the legislation in the future,” said Clement.

Clement also dismissed the suggestion that the BHP veto could harm Canadian firms doing business in Australia.

“Australia has a national interest test … it’s a rule of law of country just like Canada,” he said.

(Reporting by David Ljunggren; editing by Janet Guttsman)

Canada has not "become Venezuela" over BHP: Clement