Prentice outlines plan to protect Canadian industryUpdated Fri. Apr. 11 2008 11:13 PM ET
Industry Minister Jim Prentice said Friday that decisions about foreign takeovers will now be viewed with the goal of ensuring that Canada retains sovereign control of its technological toolbox.
Speaking in St. Hubert, Que. at the Canadian Space Agency, Prentice offered his clearest statement so far on how business will be done.
"We need to own our technology and the intellectual property that comes with it,'' the prepared text of his speech reads.
"If we do not do this, we will not reap the benefits of our work and our investments; we will not build for the future in a way that keeps us at the forefront of innovation in a knowledge economy."
The speech came one day after Prentice rejected a deal that would have seen Canada's largest space technology firm sold to an American arms maker, saying the proposed deal wouldn't provide net benefits to Canada.
Prentice has sent a formal rejection letter to Alliant Techsystems Inc. (ATK), a U.S. company that has been trying to purchase a division of MacDonald, Dettwiler and Associates, the Canadian firm responsible for the Radarsat 2 satellite, Canadarm, and the space robot Dextre.
Prentice told ATK the sale will not be allowed unless the company can offer new and compelling information.
Officially, ATK has 30 days to come up with the evidence. But Prentice's speech on Friday made it sound like the decision was final.
Prentice undertook efforts this week to tighten the regulations around foreign takeovers. And he said he would apply a "national security test" that would ensure companies with foreign ownership would be required to operate under the same standards as those that are domestically owned.
A foreign competition panel has also been established under Lynton Wilson, former head of BCE Inc. The panel has a tight timeline, commissioned to report on the issue of foreign takeovers by June 30.
The government seems determined to put a stop to the trend that has seen once-proud Canadian companies bought out by U.S. investors, such as Inco, Falconbridge and Hudson's Bay Co.
But some who are directly affected by Prentice's decision to block the sale felt his speech Friday was short on good news for workers whose jobs may have depended on the deal.
Robert Quintal, CAW local president for MDA, told CTV's Mike Duffy Live he wanted to hear the government commit to ensuring MDA remains competitive.
"We were hoping to hear there would be a reasonable amount of money spent from the Canadian government into providing business for MDA and work -- new developments, new projects. And some sort of guarantee that the amount of money the Canadian government spends on space in general is adequate to keep the employees employed, basically," Quintal said.
Janine Symanzuik, of the employees' association at MDA's Brampton, Ont. facility, agreed Canada's space industry requires an investment to remain competitive and sustainable.
"The U.S. is 81 per cent of the world's space budget and we believe that to have access to those opportunities we need this sale to go through," she told Mike Duffy Live.
On Friday, Prentice extolled the strength of Canada's space industry, especially the value of Radarsat-2 -- the satellite owned by MDA. Prentice said it will help protect Canada's claim over the Arctic.
If the U.S. deal were to go through, critics have warned, Canada could lose control and access to that technology, which Prentice said produces clearer, faster images and can "survey an area more precisely, which makes it a superior tool for tracking ships navigating our waterways."
Even opposition critics have applauded the unprecedented decision.
"When the Canadian taxpayer puts $445 million into a satellite that launches on Dec. 14 and the company seals the agreement to sell it to the Americans on the next business day, that's an extraordinary case,'' Liberal industry critic Scott Brison told The Canadian Press.
"As well, the satellite was developed to protect Canadian sovereignty (in the North) that the Americans don't recognize, so to sell it to the Americans would be perverse."
But not everyone agrees. Jim Ramstad, a Minnesota congressman representing the area where ATK is based, told The Globe and Mail he was troubled by the move.
"I find the blocking of the MDA takeover by the Canadian government outrageous. It's a slap in the face from one of our closest allies," Ramstad told The Globe.
Paul Cellucci, former U.S. ambassador to Canada, told Mike Duffy Live he feels it's premature to cancel the deal. Cellucci said he's confident a compromise could be reached that would benefit all the parties involved.
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