OTTAWA - A $15-billion bid by China's state-owned offshore oil company for Canada's Nexen Inc. (TSX:NXY), "raises a range of difficult policy questions," Prime Minister Stephen Harper said Thursday.

But Harper says cautionary signals from the United States about the takeover bid will not be a factor in whether the deal ultimately gets the green light.

"I don't think it's a surprise for me to tell you the government of Canada will take its own decision, irrespective of what the government of the United States does," the prime minister said at a joint availability with the visiting president of Tanzania.

"We don't, obviously, follow their judgments in these matters."

Nexen, a Calgary-based oil and gas company, is Canada's 10th biggest revenue generator in the industry and there are widespread concerns about it falling under the control of the Chinese National Offshore Oil Company.

Those concerns have spread as far as the U.S. Congress due to Nexen's considerable American operations.

In July, the ranking Democrat on a congressional natural resources committee requested the takeover be blocked by U.S. Treasury Secretary Tim Geithner.

"Giving valuable American resources away to wealthy multinational corporations is wasteful but giving valuable American resources away to a foreign government is far worse," Congressman Ed Markey wrote to Geithner.

A spokeswoman with Energy Department subsequently stated that "regulators are looking closely at this deal," and last month, CNOOC formally asked the American government to review its Nexen proposal for national security concerns.

The same debate is taking place north of the border, with the Harper government under sharp attack from its political opponents for a Foreign Investment Review Act that critics characterize as opaque and unclear.

The prime minister acknowledged Thursday his government is wrestling with the CNOOC-Nexen review.

"This particular transaction raises a range of difficult policy questions, difficult and forward-looking issues," Harper said.

"Those things will all be taken into account under the act in assessing the net benefit of this investment to this country, before we take a decision. And obviously we continue to gather information and opinion on that."

Harper was responding after the NDP finally declared itself formally against the takeover Thursday, following weeks of calling for a full public airing of the sale.

And while the official Opposition doesn't get a say in the matter — not even a parliamentary vote — New Democrats claim to have public opinion winds at their back as they make the case for rejecting the CNOOC takeover, citing everything from national security and environmental concerns to CNOOC's human rights and employment record.

"We've certainly seen the opinion polls moving over the last month, as well, showing more and more opposition by Canadians to this takeover," said Peter Julian, the NDP natural resources critic.

Alberta Premier Alison Redford said Thursday foreign investment has contributed to her province's economic growth. She added that she has provided some advice to Ottawa on the merits of the deal, which she says contains a number of agreeable principles, though she wouldn't elaborate on specifics.

"Of course in Alberta we want to ensure that the number of jobs stay in the province, we want to ensure that economic development continues to happen in an environmentally sustainable manner, that corporate governance continues to follow the same standards as any other corporation that would operate in Alberta," she said.

Industry Canada's current review period for the proposal ends Oct. 12 but can be extended by up to a month.

At issue is a "net benefit test" for Canada under the Investment Canada Act, a list of parameters that have been widely criticized as being open to political manipulation.

"The task is to make those factors much better defined and more specific and less arbitrary and open-ended," Lawrence Herman of Cassels Brock and Blackwell wrote in a report last autumn for the University of Calgary's School of Public Policy.

It is that process — as much as the specifics of state-owned CNOOC — that the NDP is attacking.

"By studying this transaction behind closed doors and not specifying what criteria they used to determine what represents a net benefit for the country, the Conservatives have given us no choice," said Helene LeBlanc, the party's industry critic.

"When in doubt, it's best to back off."

Industry Minister Christian Paradis responded with a news release calling the NDP "reckless and irresponsible."

"By attempting to politicize the review process they are creating the kind of uncertainty that scares off the investment Canadian companies rely on to create jobs, innovate and compete."

In an effort to counter Conservative claims that New Democrats are anti-business and anti-trade, Julian said the party welcomes foreign investment.

"What we're saying is there needs to be a level playing field for investors, that this is absolutely absurd," said Julian.

"What we have is an industry minister with nebulous criteria basically drawing up a response on a napkin based on what the public response is.

"It's not fair to investors. You need to put the criteria out front."

That the NDP should cite public opinion for rejecting the CNOOC takeover, while simultaneously criticizing the government for pandering to public opinion highlights the current problems with the investment act.

A government-commissioned report on competitiveness in 2008 recommended Ottawa raise the threshold for review under the act to $1 billion from $312 million, a move the Conservatives followed through on last spring.

The system now requires an investor to show a net benefit for Canada in a takeover, but report author Red Wilson recommended the onus be reversed, so that the government has to show net harm for Canada in order to reject a transaction. That hasn't happened.

The Conservative government shocked investors in 2010 when it blocked the hostile takeover of Saskatchewan's Potash Corp., (TSX:POT) by BHP Billiton — a takeover that was unpopular in the province and likely to cost the Conservatives seats in the next election.

At the time, Saskatchewan Premier Brad Wall said the investment act needed clearer rules about what's considered a strategic national asset.

"I think it goes to the amount of reserves and we'll have to talk about what amount of reserves or known quantity of a natural resource constitutes a strategic interest," said Wall.

The potash takeover was the second time the Conservative government blocked a foreign takeover, following its decision in 2008 to bar American defence firm Alliant Techsystems Inc., from buying out MacDonald, Dettwiler and Associates Ltd. (TSX:MDA)

Note to readers: This is a corrected story. An earlier version said the deal was valued at $1.5 billion.

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  • Here are a few details of the major investment deal coming soon between Canada and China, as well as a list of what CBC chief political correspondent Terry Milewski calls a "small blizzard of incremental agreements," signed in Beijing. <em>With files from CBC</em>. (Diego Azubel-PoolGetty Images)

  • The Big One: FIPA

    Prime Minister Stephen Harper called the foreign investment promotion and protection agreement (FIPA) between Canada and China the first "comprehensive economic agreement" between the two countries. In fact, what was signed by Harper and Chinese Premier Wen Jaibao in Beijing is not the final deal, but a declaration of intent: Now it must be legally reviewed and ratified by both governments, which for Canada will mean a debate in the House of Commons. Once both countries complete this process, it will need to be formally signed to take effect. This deal will protect Canadians investing in China, as well as Chinese investors in Canada, from "discriminatory and arbitrary practices." Once in place, investors can have more confidence that rules will be enforced and valuable business deals will be subject to predictable legal practices. Harper told reporters in Beijing he "absolutely" expected that it will make a "practical difference." "The agreement does not override existing Canadian law in regard to foreign investment and foreign investment review," Harper said. "Those laws remain in place." Negotiations for this agreement took 18 years, and key players in manufacturing, mining and the financial sectors were consulted to get to this stage. It's not unusual for Canada to have this kind of an agreement with a trading partner. FIPAs are in force with 24 other countries that trade with Canada, and active negotiations are underway with 10 other countries, according to the government's announcement. (Diego Azubel-PoolGetty Images)

  • The 'Blizzard' (By Sector):

    (AP Photo/Valentina Petrova)

  • Agriculture

    - A new protocol, building on a 2010 agreement to restore Canada's market access to the Chinese market for Canadian beef following the 2003 BSE outbreak and resulting border closures, to allow industrial beef tallow (fat) to be imported for the first time in almost a decade. China used to be Canada's top export market for tallow ($31 million in 2002), and now Canada has a shot at a share of the $400 million in tallow China imports from around the world. - A memorandum of understanding (MOU) on canola research, to address a recent fungal disease in canola and rapeseed that threatens Canada's valuable trading relationship with China in canola. - On Tuesday, Chinese aquaculture feed company Tongwei announced it will increase its purchase of Canadian canola by up to $240 million per year by 2015. (DAVID BUSTON/AFP/Getty Images)

  • Natural Resources:

    - A MOU between Natural Resources Canada and the Chinese Academy of Sciences to collaborate on scientific research on sustainable development of natural resources. The government release touts benefits including new technologies for resource firms, carbon emissions reduction strategies, reduced environmental impacts and natural hazards from resource development, and new opportunities for Canadian suppliers of equipment and services. - A MOU spelling out a "framework" for Parks Canada and China's state forestry administration to collaborate and share scientific expertise in the management of national parks, natural reserves and other protected areas. The agreement includes language around ecological restoration, conservation measures for endangered wildlife, wetlands development, and the preservation of forests and wetlands. (<a href="http://www.flickr.com/photos/47096398@N08/" target="_hplink">Flickr: eleephotography</a>)

  • Energy

    - A continuation of the MOU, first signed in 2001 and renewed in 2006, on energy co-operation to "engage China on energy issues" through a Canada-China joint working group on energy co-operation, chaired by Natural Resources Canada and China's national energy administration, which is responsible for Chinese energy policy. The working group oversees joint research projects, exchange of expertise, and co-operation between energy companies in both countries, including the promotion of energy efficiency and renewables. It aims to both attract capital investment and improve market access for Canadian energy resources and technology. (MARK RALSTON/AFP/Getty Images)

  • Science and Technology

    - Approval of seven projects, valued at $10 million, under the Canada-China framework for co-operation on science and technology and innovation, including: a diagnostic kit for acute kidney injuries, a wind energy seawater desalination system, a waste heat-recovery system to help oil refineries consume less fuel, new solar cells for renewable energy panels, a real-time multi-sensor navigational tracking device for hand-held devices, a blue-green algae bloom warning system and "next generation" large-scale geographic information systems. - Two more calls for proposals, valued at $18 million ($9 million from each country) for joint research under the same framework. These proposals are for the development of "innovations with high commercial potential" in the areas of human vaccines and clean automotive transportation. The Canada-China joint committee on science and technology, made up of individuals from industry, academia and government, sets the priorities and oversees these projects. (To date, 21 projects ranging from nuclear power to AIDS drugs, to clean technologies for pulp and paper have received some $28 million in funding.) (TOSHIFUMI KITAMURA/AFP/Getty Images)

  • Education

    - A renewed MOU extending and modifying the Canada-China scholars' exchange program, which has seen 900 students travel between Canada and China since 1973. New eligibility rules and scholarships will be in place for the next round of competitions in 2012, including eight to 12 Canadian scholarships for Chinese professionals and 20 awards for Canadian university students. (<a href="http://www.flickr.com/photos/plutor/" target="_hplink">Flickr: Plutor</a>)


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  • 10. The United States

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  • 9. The United Kingdom

    A historic leader in global trade and finance, the United Kingdom placed a strong 9th place. (Photo by Tom Shaw/Getty Images)

  • 8. Norway

    Oil boosts the economy of this Scandinavian powerhouse. (Photo by Scott Barbour/Getty Images)

  • 7. Sweden

    Iconic global brands such as Ikea, Ericsson and H & M call Sweden home. (Olivier Morin/AFP/Getty Images)

  • 6. Singapore

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  • 5. Denmark

    The third Scandinavian country on the list, Denmark fell from the top spot on Forbes' ranking. (Getty Images)

  • 4. Ireland

    Despite being hit hard by the recent economic crisis, Ireland placed a respectable fourth on the list. (Peter Macdiarmid/Getty Images)

  • 3. Hong Kong

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  • 2. New Zealand

    Punching above its weight is the southern nation of New Zealand. The country only has fewer than 4.5 million people but its the runner-up on Forbes' list. (Photo by Sandra Mu/Getty Images)

  • 1. Canada

    The CN Tower looms over the Toronto Blue Jays and Detroit Tigers as the Rogers Centre's roof is open for the first time in the 2011 MLB baseball season in Toronto Saturday, May 7, 2011. (AP Photo/The Canadian Press, Darren Calabrese)