Saskatchewan Premier Brad Wall of the Saskatchewan Party reported Friday that Manitoba's premier also opposes the hostile takeover of Potash Corporation of Saskatchewan by Australian mining giant BHP Billiton. Ed Stelmach premier of Alberta also supported Wall. The Conservative prime ministera conservative will now be under pressure to also reject the deal. Both Alberta and Saskatchewan are run by conservative governments while Manitoba has a moderately left New Democratic government in power.
Wall said of Manitoba premier Greg Sellinger: He, too, wants us to balance a welcoming investment climate - to be open to foreign direct investment, but to be concerned about the strategic nature of the resources that we have," Wall noted that natural resources belong to the provinces and he wanted to make sure provincial interested are represented in the federal government. No doubt the two other premiers feel the same way. Harper was expected to approve the deal since he is very much for free markets and Canada being open to foreign investment. Actually Potash Corp. of Saskatchewan is already a foreign company with head office in Chicago although the majority of shareholders may still be Canadian.
All the premiers agree with Wall that BHP ownership of PotashCorp wouldn't be of net benefit to Canadians. Wall emphasized that his opposition to this takeover doesn't mean he's against foreign investment. Wall said the strategic importance of Saskatchewan's potash - about half of the world's reserves of the mineral used in fertilizer - makes this deal of special significance. The deal could also cost the provincial treasury billions of dollars in lost royalties and taxes over a decade he claims.
The federal government is considering whether the proposed deal, valued at $38.6 billion US, or $130 a share, meets the requirements of the Investment Canada Act by providing net benefits to Canada. Even if the takeover were approved it is unlikely that shareholders would agree to it since the bid is still far below the value shares are trading at now.
Other companies including a First Nations group is also rumored to be contemplating a bid for the company. The Potash Corp. said:"The PotashCorp board believes that there is a real and substantial probability that alternatives to the BHP offer will emerge that will increase shareholder choice and enhance shareholder value,"
Federal New Democrat leadercalled for changes to the foreign investment review act that would make it more open. He said:"If the government decides to give BHP the green light here, nobody is going to know why. They don't have to tell us, and that's wrong."