Foreign acquirers take note – you have a big sales job to do in Canada.
A survey for PostMedia News and Global TV found that 68 per cent of Canadians say the government should stop the sale of companies in this country to buyers from outside Canada. The number opposed jumps to 74 per cent if the would-be buyer is a state-owned enterprise.
The federal government has sent a pretty clear signal by its recent actions that foreign acquisitions that can't pass the public opinion test have a good chance of being blocked. Small acquisitions will still tend to slide by unnoticed. Big ones, however, are going to face a public perception test as much as they are a net benefit test. And the numbers in that survey show just what kind of hill an acquirer looking at a marquee Canadian company is going to have to climb.
BHP Billiton failed miserably to convince Canadians that buying Potash Corp. of Saskatchewan was in this country's interest, and that transaction was shot down by Ottawa. CNOOC Ltd., by contrast, never faced a really big, loud, widespread opposition to its purchase of Nexen Inc., and it got done. CNOOC was smart to pick an unloved target, with no real dominance of a key Canadian asset, and laid out a raft of concessions publicly early in the process.
The survey results put into sharp perspective just what a pickle the Conservative government faces when a bid comes in for a name-brand corporation.
This is a government that has focused on trade, and expanding Canada's ties abroad, and is generally free-market in its ideology. At the same time, the Stephen Harper brain trust comes from populist roots, giving weight to what the people want, and is firmly focused on the New Democratic Party as its main opposition threat.
And the NDP has no problem casting foreign buyers in the role of villains. This is the party whose leader, Thomas Mulcair, said the government "sold out" Canadians by allowing the sale of Nexen Inc. to a Chinese state-owned enterprise to go through.