Friday, 18 September 2009

Tories are selling out Canada

by Tom Ford
Winnipeg Free Press

SUDBURY, Ont. -- The federal Conservatives like to say they're "standing up for Canada." A visit to this troubled city indicates just how specious that slogan is.

The Conservatives were supine in October 2006 when Brazil-based Companhia Vale do Rio Doce (CVRD) bought Inco Ltd., an iconic Canadian mining company, for $19 billion.

The mine's workers, members of the United Steelworkers, went on strike in mid-July and are now in a bare-knuckle fight with CVRD. The Brazilians say they will use their non-unionized staff to restart some of their operations. If they do, says Wayne Fraser, Ontario director for the Steelworkers, they will start a war.

The Inco takeover angered even some Bay St. veterans. Donald Coxe, an expert in commodities, is one. Coxe doesn't have a nationalistic bone in his body, but the takeover made him angry because Sudbury cannot be replaced. God is not making any more nickel mines.

Michael Atkins, resident of the Laurentian Media Group, says Prime Minister Stephen Harper's government at the time felt "there was going to be no buyer, there were going to be no jobs, there weren't going to be any capital investments, there was going to be no employer." Industry Minister Tony Clement says "that was the Valley of Death that Sudbury faced."

Atkins says Clement now feels his statement was "bone-headed." Too late. Inco is now in the hands of Brazilians who don't understand our corporate values. Its threat to bring in replacement workers is a move few Canadian companies would take.

Sadly, the strike has little to do with Sudbury's mining operations. The Steelworkers' Fraser says the Ontario operations (including a refinery at Port Colborne, also on strike) earned $2 million in 2009's first quarter and $4.2 billion over the past two-and-one-half years. Roger Agrelli, CVRD's chief executive officer, says Sudbury is "not sustainable" and wants to abolish a bonus plan based on the price of nickel, and defined benefit pensions for new employees.

For the most part, though, the strike is really a power struggle between two giants with international agendas.

In March, CVRD said it would cut 423 Canadian jobs; then it announced it would halt mining and processing nickel at Sudbury during June and July to reduce the impact of the global recession. Clement initially demanded to know why CVRD was violating its Investment Canada Act commitments, but later withdrew his complaints.

In addition to the Ontario operations, CVRD's Canadian holdings include a nickel-cobalt-copper mine in Voisey's Bay, N.L., and three nickel mines, a mill, a smelter and a refinery in Thompson, Man.

Sudbury is not Clement's only problem with foreign ownership. He recently took the unprecedented step of hauling U.S. Steel into the Federal Court of Canada for not living up to the job and production commitments it made when it bought Hamilton's Stelco Inc. in 2007.

Bill Ferguson, president of the Steelworkers' Lake Erie Works local, says U.S. Steel seems to be giving priority to its American operations as the demand for steel increases. "That's the reality, I guess, of being a branch plant to a large American corporation," he told The Globe and Mail.

Sault St. Marie, Ont.'s Algoma Steel was bought by India's Essar Group in April 2007 for about $1.85 billion. Ian Kersley, of the Steelworkers' Union which represents some of Algoma's employees, said three union representatives on Essar Algoma's board of directors, recently resigned because they "were getting no information at the board level. Decisions were getting made offshore."

Many countries are not nearly as open as Canada to foreign takeovers. Brazil owns a share of CVRD that prevents any foreign takeover. It also feels free to boss the company around. Last month, it ordered CVRD to start an expensive exploration program in Brazil because it didn't like importing potash from -- you guessed it -- Canada.

Canada should welcome foreign investment, but there's a line between that and allowing foreign investors to walk all over us. New rules, proposed by Industry Canada in July, were supposed to clarify whether a corporate sale threatened national security.

Unfortunately, says an article in Canadian Business magazine, the proposal made foreign acquisition rules muddier.

Liberal Leader Michael Ignatieff saw some of the issues first-hand last week when he met with his caucus in Sudbury.

"We welcome inward investment," he told a news conference. "But we don't want inward investment at the price of Canadian workers, jobs and at the price of Canadian technologies."

In other words, we need a government that stands up for Canada.

Tom Ford is managing editor of The Issues Network.

Republished from the Winnipeg Free Press print edition September 8, 2009 A14

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