The Sell-Off of Corporate Canada
The announcement this week that Prime Minister Stephen Harper is not going to intervene in the sale of Potash Corp. of Saskatchewan to the Australian conglomerate, BHP Billiton Ltd., speaks volumes about how Bay Street Â and its servants in Ottawa are so willing and eager to sell off Canadaâ€™s corporate assets to foreign corporations.
Itâ€™s a phenomenon that has been growing for years now. And yet, depressingly, no one seems to care that much about it. One by one, jewels of the Canadian corporate community have been bartered away, and it goes pretty much unremarked. Neither the Liberals or NDP have seen fit to make an issue of the matter â€“ which is in marked contrast to the 1970s when who controlled the Canadian economy triggered a national outcry and led to the creation of the Foreign Investment Review Agency (FIRA).
The selloff list is long and startling: last year, Nortel’s bankrupt assets were sold away to primarily Scandinavian corporate interests, despite the fact Research In Motion (RIM) tried to buy them. Again, the Harper regime refused to intervene in the purchase of Nortelâ€™s high-tech legacy to foreign corporations.
As I mentioned here two weeks ago, the entire steel industry â€“ Stelco, Dofasco, Algoma, IPSCO â€“ was sold off between 2005 and 2007 to foreign conglomerates. Other notable sell offs include Alcan, Inco, a huge chunk of BCE, Four Seasons Hotels, Falconbridge, Vincor International, Hudson’s Bay Co., ATI Technologies, Intrawest, Western Oil Sands, Labatt, MacMillan Bloedel, JDS Fitel, Seagram’s, Eaton’s, Corel, CP Ships Ltd., Molson’s, Canadian Pacific hotels, and Noranda. Even Tim Hortons and hockey equipment maker Bauer are no longer Canadian-owned.
All told, 54% of 250 of Canada’s largest corporations are foreign-owned. Foreign-controlled corporations operating revenues in Canada averaged $96-million, compared with less than $2-million for their Canadian-controlled counterparts. In 2007, foreign corporations accounted for 21.1% of assets held in Canada and 30.5% of operating revenues.
Not everyone in the Canadian business establishment has watched this trend without trepidation. In 2007 and 2009, Thomas Caldwell, chairman of Caldwell Securities Ltd., a Bay Street investment house, took out full-page ads in both the Globe and Mail and National Post decrying the selling off of so many Canadian corporations to foreign interests. In one ad, entitled â€œThe Sellout of Corporate Canadaâ€, Caldwell remarked: â€œThe loss of head offices and industrial leadership by Canada is one of the great corporate tragedies of our time. Future generations of Canadians, wishing to climb the corporate ladder, will increasingly be compelled to go elsewhere. The current trend guarantees Canadaâ€™s losing some of its best and brightest people.â€ Caldwell placed much of the blame on managers and board of directors eager to sell because they earn huge bonuses and stock options if they do so. â€œYears of mediocre corporate management can result in great paydays for managers as other companies, often foreign, benefit from the bargains handed to them,â€ he wrote.
The consequences of foreign ownership are also being clearly witnessed. US Steel has done everything it could to shutter its Stelco mills since it bought the steel company in 2007. A year later, production that was being done in Hamilton was shifted to US Steelâ€™s American factories. In 2006, a Brazilian transnational, Vale SA, bought the Sudbury-based nickel mining company Inco. In 2009, after demanding heavy concessions, Inco workers went on what would turn out to be a bitter year-long strike.Â Vale fired nine striking workers and used a union-busting firm, AFI, to intimidate and harass the workers. When they finally returned to work this summer, the union had pretty much caved in and accepted the concessions.
One would hope that the Left and NDP would take up the issue of the Canadian corporate sell off in the coming months, especially as we head towards another federal election. But I wouldnâ€™t count on it.