Liberal government reviewing ban on Chinese oilsands ownership
As the federal Liberal government moves to open Asian markets for Canadian energy through pipeline approvals, it is also reviewing restrictions targeting Chinese investment in the oilsands, Natural Resources Minister Jim Carr said this week.
The former Conservative government brought in new rules restricting investment by state-owned enterprises into oilsands operations — measures aimed primarily at Chinese companies — after allowing the takeover of Calgary-based Nexen by China National Offshore Oil Co. (CNOOC) in 2012.
In a meeting with the Calgary Herald editorial board this week, Carr said those rules are “up for debate” as part of a government-wide review of direct foreign investment in Canada.
“We’re looking at a far more aggressive trade and investment strategy across the government,” said Carr.
Prior to last year’s federal election that brought the Trudeau government to power, the Liberals had suggested the restrictions on state-owned enterprises would be eased, with Scott Brison — now Treasury Board minister — calling the rules “cultural condescension.”
Gordon Houlden, director of the University of Canada’s China Institute, said he expects there is significant debate within the government over the idea.
But with state-owned enterprises maintaining their pre-eminent position within the Chinese economy, eliminating the rules is “very important for the Chinese” and could lead to significant new investment in the oilpatch, he said.
“They’ve got deep pockets and their big oil companies are very big indeed,” said Houlden.
Wenran Jiang, director of the Canada-China Energy and Environment Forum, said he didn’t think lifting the restrictions would result in a rush of new dollars from China because previous investments by companies such as CNOOC have not paid off as originally envisioned.
It would be a gesture of “goodwill,” however, said Jiang.
Carr was in Calgary this week following Prime Minister Justin Trudeau’s announcement that Ottawa had approved the expansion of Kinder Morgan’s Trans Mountain pipeline to British Columbia, as well as Enbridge’s Line 3 into the United States, while rejecting Enbridge’s proposed Northern Gateway to the Pacific Coast.
A key aim of a West Coast oil pipeline is opening up China and other Asian markets to Canada’s oilsands crude, a priority for both the Canada and Canadian governments.
“Expanding our export markets is fundamentally important,” said Carr.
Jiang noted that a Canadian pipeline to the B.C. coast has long been on the wish-list for China, which imports eight million barrels of oil a day and faces ongoing concerns over energy security.
“This is quite a big deal for the Chinese,” he said of the Trans Mountain expansion.
Jiang believes the pipeline could help the two countries move toward a free-trade agreement, but he dismissed the idea that Beijing had made it a prerequisite for such a deal to happen.
Carr said he couldn’t say whether the pipeline has any connection to a potential free trade agreement with China.
“The honest answer is, I don’t know,” he said. “I know that the Chinese are very interested in Canada’s natural resources, but the linkage between the two, and anything that might be considered a guidepost, I can’t give you.”
Trudeau and Chinese Premier Li Keqiang agreed in September to begin exploratory talks around a free-trade deal.
Houlden said China would likely push for the restrictions on state-owned enterprises to be removed as part of those talks, which the Canadian government should use as a bargaining chip in negotiations.
Canada’s NDP government, meanwhile, was noncommital over whether it favours a trade deal or wants the rules on Chinese investment eased.
“Canada has historically received the majority of Chinese investment in Canada, so any changes must be carefully considered to ensure they are in Canada’s interests,” said a statement from Jean-Marc Prevost, press secretary to Economic Development Minister Deron Bilous.
“That’s why we will continue to engage with the federal government to ensure Canada remains open to international investment and the jobs those investments create.”
alberta conservatives, Alberta news, alberta socialists, Canadian news, conservatives, global warming fraud, Liberal government reviewing ban on Chinese oilsands ownership, natural gas, oil, pipelines, right for alberta, taxes, western Canada
Categorised in: Uncategorized