The Nexen building is seen in downtown Calgary. Liberal leadership candidate Justin Trudeau sees the company’s merger with China’s CNOOC as providing a great deal of benefit to Canadians, with little downside risk.TODD KOROL/Reuters
I have criticized Justin Trudeau's policy proposals in the past, specifically for being light on economic policy and for his incoherence on environment issues. He's trying, however, to make a believer out of me with an editorial on trade policy and Asia. While modest on specifics, Mr. Trudeau correctly identifies Canada's foreign direct investment policies as a significant economic issue that the Conservatives have not addressed.
Of all the points in the editorial, Mr. Trudeau's support of the CNOOC-Nexen deal is probably most surprising. Like many others, he sees the merger as providing a great deal of benefit to Canadians, with little downside risk. The Conservatives have not offered a coherent reason why blocking such a deal is in Canada's interests, and I am delighted to see Mr. Trudeau call them on it.
Mr. Trudeau goes on to add that "the big picture isn't about CNOOC or Petronas, but the many opportunities like them that will follow in their footsteps." The underlying issue is clearly the Investment Canada Act (ICA) and the "net benefit test". Unfortunately, Mr. Trudeau has not said why the CNOOC-Nexen deal and others would pass under his system but fail under the current approach. Would he replace the ICA with a new law, or would he interpret the net benefit test differently than the Harper government? Such a distinction is important, as the net benefit test has problems beyond what Mr. Trudeau says is the current government's "Keystone Kops approach".
The most impressive part of Mr. Trudeau's position is how he has successfully linked trade policy with his campaign's focus on the middle class. In order to increase middle-class wages, Canadian productivity must increase. His statement that "[f]oreign investment raises productivity, and hence the living standards of Canadian families" may not be a great bumper sticker slogan, but it is a vital point.
There has been criticism that Mr. Trudeau cannot both support the CNOOC-Nexen deal and oppose the Northern Gateway pipeline. I disagree. There are alternative options to get the oil to market, some highly realistic (Keystone XL), others less so (a railway to Alaska). CNOOC's position on Northern Gateway should be irrelevant since the company's merger plans are not conditional on having the pipeline built.
I have previously graded Mr. Trudeau's foreign investment policies as an A-. Given these further details, he has earned a full A, if not an A+.