"I want to see continued foreign investment in the oil patch. I want to see it always assessed by whether or not it's in the best interests of Canada," Ms. Redford said in an interview with The Hill Times following the federal government's decision to green light the takeovers of Nexen and Progress Energy by foreign state-owned enterprises [SOEs].
"The federal government, I think, took that test very seriously and made what we believe was the right decision in those circumstances," she said.
The Alberta government is counting on nearly $225-billion in investment over the next 25 years to expand the province's oil and gas sector. However, foreign SOEs like Malaysia's Petronas Energy, which was cleared to acquire Progress Energy for $5.2-billion, and the China National Offshore Oil Corporation (CNOOC), which acquired Nexen for $15.1-billion, will face greater scrutiny in the future.
Hailing his government's decision to approve the takeovers as "the end of a trend," Prime Minister Stephen Harper (Calgary Southwest, Alta.) introduced tighter standards for foreign SOEs seeking controlling interest of firms operating in Alberta's oil sands on Dec. 7.
In a statement coinciding with Mr. Harper's announcement, Industry Canada noted that due to "the inherent risks posed by foreign SOE acquisitions in the oil sands," future controlling acquisitions by foreign SOEs would be granted "on an exceptional basis only."
The government plans to raise the Investment Canada Act review threshold for private foreign investment to $1-billion, but hold the review threshold for acquisitions by foreign SOEs at $330-million. This means that foreign SOE investments equaling or exceeding the threshold in Canada will be subject to the act's "net benefit test," while much larger private foreign investments will avoid Industry Canada review.
The Industry minister will also have the ability to extend national security reviews conducted as part of the Investment Canada Act's net benefit test.
Ms. Redford called Ottawa's tighter rules for SOE investment in the oil sands "entirely appropriate."
"It was probably time to do it and we actually welcome the fact that they took the time to not only make these decisions, but to give some thought to the future," she said. "Our perspective is that they haven't shut the door, but they want to be very clear with Canadians as to what they're balancing."
The Prime Minister's announcement found support not only from the Alberta Premier, but also from members of his own Alberta-caucus-some of whom were particularly concerned by CNOOC's acquisition of Nexen.
Relations between the federal Alberta Tories and Ms. Redford's Progressive Conservatives have been icy since a bitter provincial election last April in which many Alberta MPs threw their support behind the right-wing Wildrose Party, whose surging support collapsed in the final days of the race.
In November, Alberta Progressive Conservatives voted to strip their province's federal Conservative riding associations' of automatic delegates who were eligible to vote in the party's conventions.
Despite the apparent rift, the province's conservative movement appears to be on the same page when it comes to the federal government's decision.
Conservative MP Brain Jean (Fort McMurray-Athabasca, Alta.), whose riding is home to Nexen's Long Lake in situ oil sands project, said that he was "very pleased" with the government's decision to approve the deals while also limiting foreign SOE ownership in the oil sands.
"It's good for jobs, it's good for the economy of Canada, overall, [and] great for our future investments from state-owned enterprises, as well," Mr. Jean said.
Since first being announced on July 23, CNOOC's aggressive play for Nexen faced popular opposition from the left and right of Canada's political spectrum. National security concerns have been raised because of CNOOC's status as an extension of the Chinese government.
A recent study by the University of Alberta's China Institute found that 64 per cent of Albertans disagree with Chinese investment in the form of full ownership in the province. However, only 36 per cent disagreed with Chinese firms having partial ownership in the oil patch.
Polling conducted by Abacus Data throughout the fall found that nearly 70 per cent of Canadians opposed the Nexen takeover nationwide.
Conservative MP Leon Benoit (Vegreville-Wainwright, Alta.), chair of the House Natural Resources Committee, said that the government's approval of the takeovers took these concerns into account without closing the door to further investment by foreign SOEs.
He described it as "probably about the best decision a government can make."
"We've found this middle ground that I think is quite appropriate - certainly I think it does put more certainty into the decision making process when it comes to foreign investors, particularly state-owned foreign investors," Mr. Benoit told The Hill Times. "I expect when it comes to state-owned organizations wanting to invest in the oil sands they will recognize that they're going to have to do it with smaller investments where they don't have controlling interest."
He acknowledged that he had heard some opposition to the deal from his constituents, but described the overall reaction as positive.
"I've had a couple who don't like it, but I happen to know those people are NDP supporters. They call me regularly and it's always with the NDP talking points, so not surprised-they don't want any foreign investment," he said.
Critics have also opposed the takeover because of China's human rights record at home and abroad. A number of Conservative MPs are involved in Friends of Falun Gong and Friends of Tibet-groups critical of the Chinese government's persecution of Falun Gong practitioners and its imposed rule over Tibet.
Conservative MP Brent Rathgeber (Edmonton-Prince Alberta, Alta.), chair of the Parliamentary Friends of Falun Gong, conceded that he did have a "few reservations" about the takeover, but came around to the need for foreign investment in the oil sands industry.
"I have an interest generally in the topic of Chinese human rights. That said, I didn't have any significant concerns about either one of these transactions," said Mr. Rathgeber. "These types of investments are desperately needed in Alberta because we just don't have the type of venture capital to try to build these projects on our own."
Mr. Rathgeber said that his offices had received more than 100 calls and e-mails expressing supported over the Nexen transaction. Although he approved of the government's decision on Nexen and Progress, he also endorsed a motion passed last week by the NDP, which called on the government to bring greater clarity to the Investment Canada Act's net benefit test.
"The investment climate has to have some stability so that the rules are known and they're known in advance," Mr. Rathgeber explained. "I don't think you can change the rules mid-game. While these two acquisitions were under consideration, I don't think that would be the time to amend the legislation."
The Hill Times