Ottawa kicked off its review of China National Offshore Oil Co.'s $15.1-billion deal to buy Calgary-based Nexen Inc. (TSX:NXY) on Wednesday.
In reviewing foreign takeovers, the minister must decide whether the deal would be of net benefit to Canada, but the Tories haven't defined what that means.
On Thursday, a junior cabinet minister mused that protecting the environment would be part of the review process. Last week, the prime minister suggested public opinion could also be a factor.
But the New Democrats say the government needs to put forward a far more detailed definition because the public and industry need to know.
"We don't have clear rules, we don't have a clear process, we don't have a transparent process. The public has lost confidence," said NDP MP Peter Julian.
"And on the other hand, I think investors really question will this takeover blow up ... or is it subject to clear rules and a thorough review process that everybody can trust."
The review will take 45 days initially, but can be extended by 30 days or more.
Conservative Minister of State for Finance Ted Menzies offered some explanation of net benefit Thursday.
"Net benefit makes sure that our resource sector will be well looked after," Menzies said in a teleconference call from Moscow where he's attending meetings ahead of the APEC summit.
"To me, that's net benefit — to make sure that it's treated in the same way as our Canadian companies.
"Indeed, many of the companies that are operating in the oil and gas sector right now are not Canadian companies so we make sure that they treat the environment with respect, make sure that they do due diligence and look after our environment as they're doing it," he said.
A poll released last week by the Sun News Network suggested the majority of Canadians aren't in favour of the deal.
When asked about it during his Northern tour, the prime minister said public opinion could also factor into his government's decision on whether to sign-off.
"Our government will take the time we have to properly scrutinize this transaction and to assess that, if it is to go ahead, that it will only go ahead if it is in the best long-term interest of the Canadian economy,'' Stephen Harper said.
Julian said other factors, like job creation, research and development and environmental protection must be taken into account.
The nationality of the buyer could be a factor as well, Julian said.
"It depends on the impact of that test of net benefit," he said.
"If you have established criteria that allow for a level playing field, I think the decision becomes self-evident — but we don't have that criteria."
Julian wouldn't say whether the NDP had any objections to a Chinese state-owned firm becoming a major player in the oil-and-gas sector.
He said the NDP doesn't have a formal position on the deal itself and is seeking to consult with Canadians.
Industry Minister Christian Paradis, who is leading the review, said the government is consulting as well.
"The review process under the (Investment Canada Act)is rigorous, involving consultations with affected provinces/territories and other government departments," he said in a statement.
"I will take the time required to carefully examine CNOOC’s proposed acquisition of Nexen Inc. and determine whether it is likely to be of net benefit to Canada."
In announcing the friendly deal on July 23, the Chinese state-owned company vowed to make Calgary the headquarters of its North and Central American operations and to keep all of Nexen's employees and management.
The agreement came after more than two months of negotiations between Nexen and CNOOC executives. Nexen twice rejected CNOOC's bid as too low before ultimately embracing the offer.
If successful, the deal would be China's largest-ever overseas acquisition.
The Conservatives have rejected only two foreign takeovers in the last six years, most recently a US$40-billion bid by Anglo-Australian mining firm BHP Billiton for Potash Corp. (TSX:POT) in 2010.
Following the rejection of the bid, the federal government said it would clear up the rules regarding foreign investment.
But this spring, Paradis announced only modest changes that didn't that didn't touch on the issue of net benefit.
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