The Trudeau government’s point man on foreign investment says he will do what is in Canada’s best interests when he approves or rejects a takeover of one of B.C.’s biggest retirement home chains by a massive Chinese company with a murky ownership structure.
The deal to buy Retirement Concepts of Vancouver is believed to exceed $1-billion and, if approved by Ottawa, would give Beijing-based Anbang Insurance Group an important role in the delivery of health care in British Columbia.
Innovation Minister Navdeep Bains said Tuesday in the House of Commons, that he will scrutinize the takeover to ensure it’s not hurting Canada. “These are done on a case-by-case basis and, over all, our objective is very clear. We are going to do what is the net benefit for Canada. We are going to make sure that we advance our national interest and when we make a decision, we will make that public.”
The Hospital Employees’ Union, which represents nearly 1,900 members at 12 Retirement Concepts locations in B.C., is opposing the sale.
“At this time, it appears these plans would not affect the day-to-day operations of Retirement Concepts or the collective agreements under which HEU members are working,” said HEU secretary-business manager Jennifer Whiteside in a statement Tuesday. “But clearly, this sale raises serious questions about broader accountability in our health-care system.”
Under international trade deals that Canada has signed, the provinces and territories have the right to refuse giving health-care contracts to foreign companies. However, the B.C. government has not indicated any interest in invoking its powers to block the sale of Retirement Concepts.
James Brander, an international-trade-policy expert from the University of B.C.’s Sauder School of Business, said Canada has ensured that the provinces and territories have the ability to protect some sectors from free-trade rules in instances where they have a dominant interest – including health care.
“But from the general perspective in the economics community, there is no reason to exempt this aspect of health care,” Dr. Brander said Tuesday in an interview. “This is not the acute-care sector, this is a for-profit part of the health-care system … It’s just foreign money helping to support the delivery of an important sector of the system.”
The province has elected to leave it to the federal government to conduct a foreign investment review of the proposed sale. In the past decade, the Conservative federal government blocked four such deals in the aerospace, telecom, potash and oil sectors, often citing the need to protect Canada’s national interests. If Ottawa approves the sale, it will then be reviewed by B.C.’s Chief Medical Health Officer, to ensure that the purchasing company is able to meet the needs of patients.
“The priority of the ministry and health authorities is the care of patients – regardless of ownership,” a B.C. Health Ministry official said in a statement.
Retirement Concepts owns and operates about 24 retirement “communities,” mostly in B.C., except for several properties in Calgary and Montreal. It also owns holdings of unused or partly developed land that would allow a major expansion of facilities in the future.
Retirement Concepts is the highest-billing provider of assisted living and residential care services in the province. The B.C. government paid the company $86.5-million in the 2015-16 fiscal year, more than any other of the 130 similar providers.
John Hirdes from the University of Waterloo’s School of Public Health and Health Systems said there is a sensitivity around the public health-care system – being so much a part of Canada’s identity – but noted there is already significant investment from U.S. and Australian companies in Canada’s health-care system.
“There is certainly a precedent,” he said. He added that China has had enormous growth in services to seniors and it is not surprising that there would be interest in expanding into other countries.
However, he said the most important aspect of this sale is that B.C. retains oversight and regulation to ensure vulnerable patients are properly cared for.
Anbang’s ownership remains mysterious. An investigation by The New York Times earlier this year revealed 92 per cent of Anbang is currently held by firms either fully or partly owned by relatives of Anbang’s chairman, Wu Xiaohui, or his wife, the granddaughter of the former Chinese leader Deng Xiaoping, or Chen Xiaolu, the son of a famous People’s Liberation Army leader.
Telephone calls and e-mails to this company’s listed directors were not returned. The Globe and Mail has also unable to reach anyone at Anbang International, Anbang Insurance’s global investment arm, at its Vancouver number.Report Typo/Error
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