If Potash goes, every company – even Canadian champions – is fair game

"Opposition stems largely from the fear that if Potash Corp. goes, every Canadian company – even those who have styled themselves Canadian champions – is fair game. “There’s a huge risk. If this goes through, I can’t see how we would keep an Encana or a CNRL in Canadian hands,” said Leonard Waverman, dean of the Haskayne School of Business at the University of Calgary. “I think it’s going to kill Alberta.”"

The above quote, now deleted, was the conclusion of the Globe's original story Hometown opposition to Potash takeover puts Harper in bind - still available at time of writing at CTV. The Globe's final version, heavily edited, is now titled Western opposition to Potash sale complicates PM’s decision, and ends differently, with a more ambivalent quote from Gibbons. Since that's the version that will appear in Wednesday's paper, I've decided to quote the original article in full, below, for anyone who likes to play "spot the differences" and for posterity's sake. Enjoy:

Hometown opposition to Potash takeover puts Harper in bind
- Steven Chase, Shawn McCarthy, Brenda Bouw & Nathan VanderKlippe

Weighty political opposition to the Potash Corp. takeover from Stephen Harper's hometown of Calgary is complicating the task of reviewing BHP Billiton's bid, Conservative insiders say.

As one senior Tory tells The Globe, this Alberta-based backlash to the BHP deal has ended up broadening the political calculations for Ottawa beyond Saskatchewan.

Richard Haskayne, a veteran of Canadian boardrooms who's helmed several of this country's biggest companies, is one Calgary businessman who's been pressing Tory MPs and cabinet ministers to reject the takeover.

“My neighbour, two doors down, is Jim Prentice and he knows where I stand,” said Mr. Haskayne, after whom the University of Calgary's business school is named.

The Harper government has set itself a deadline of November 3 to rule on the acquisition. It must decide whether the deal is what foreign-takeover legislation calls a “net benefit” to Canada.

Mr. Haskayne says a green light for the Anglo-Australian BHP to take over Potash would be wrenching for Canada, where three provincial governments have already joined Saskatchewan Premier Brad Wall in opposing the deal.

“It's going to be as divisive as the NEP,” Mr. Haskayne said, referring to the interventionist 1980 National Energy Program that infuriated Albertans.

Over his career, the Calgarian has served as president of Hudson's Bay Oil and Gas, CEO of Interhome Energy, chairman of TransAlta Corp, chairman of MacMillan Bloedel and chairman of NOVA Corp. when it merged witih TransCanada PipeLines.

He's been campaigning against a foreign acquisition of Potash because it controls such a key portion of a strategic resource. The former Saskatchewan Crown corporation has title to about 25 per cent of the world supply of potash, a vital ingredient in fertilizer.

Mr. Haskayne said he cannot see any “net benefit” to Canada to letting BHP buy Potash. “And I've been on 20 public company boards and chairman of half a dozen.”

The Calgary businessman said a foreign takeover of Potash would encourage outsiders to train their sites on the oil sands next. “If this aproved, and they let it go ahead, the next one is liable to be Cenovus or Canadian Oil Sands.”

Mr. Haskayne noted that he was chairman of forestry giant MacMillan Bloedel, a British Columbia corporate star, when it was bought out by U.S.-based Weyerhaeuser in 1999. But he said the circumstances were different.

“The company had financial problems. We tried to find a Canadian solution to it.” Mr. Haskayne added that the firm was able to show significant net benefits to Canada by a Weyehaeuser takeover including “better silviculture, better safety and better markets.”

He said he's of the opinion that Calgary's business community has turned against the deal in the last few days.

Exceptions, Mr. Haskayne noted, are economists such as Jack Mintz, the chair of the University of Calgary's School of Policy Studies. But he argues that business-school support for a takeover is a matter of “ideolology versus practical business stuff.”

Mr. Haskayne said foreign companies know they are welcome to make direct investments in Canadian resources. “If they want to come here and bring their technology and their money, we welcome that.”

But he is more concerned about takeovers of vital publicly-traded companies such as Potash. “We have a right to invest in them,” he said. “I have 20,000 shares of Potash. I am not going to tender them no matter what.”

Mr. Wall also lashed out at the Investment Canada review process on Tuesday, in particular information outlined in stories Tuesday in The Globe and Mail and National Post, which he called a betrayal of the process. Saskatchewan is calling for the Industry Minister to investigate the leaks.

“Money is being made and lost based on those remarks,” Mr. Wall told reporters in Regina. “Most importantly, it indicates that the government is prepared to go against the expressed wishes of the province of Saskatchewan.”

He said the government was “castigated at the official level by federal officials saying the confidentiality here must be strictly adhered to,” and now appears it was leaked by insiders.

Mr. Wall added: “This is a Saskatchewan takeover, let’s make no mistake. It affects our resources, and our industry, it affects jobs in this province and revenue to the government and it affects the strategic position of Saskatchewan and Canada in the world. And that’s why we made the recommendation of no. If they go with anything else but no, we don’t believe it’s representing the interests of the province very well on the part of the federal government.”

Opposition to a Potash deal goes beyond the Prairie populism of Mr. Wall and the Alberta oil patch, where some executive worry about the loss of Canadian head offices in key sectors.

Former Liberal industry minister John Manley, who now heads the Canadian Council of Chief Executives, said there is disagreement on the issue among his members, with some believing Ottawa should not approve the deal. Mr. Manley said the decision should be based on the national interest – and not the interest of one province or premier – and judged strictly according to the net benefit test of the Investment Canada Act.

The Harper government has sent signals to Chinese and other state-owned enterprises that they are welcome to invest in developing oil and gas properties, but that Ottawa would be more reluctant to approve the takeover of an operating company that's producing petroleum.

Calgary is also home to Agrium, a fertilizer giant which is one of the three members of the potash marketing cartel Canpotex.

An Agrium spokesman said the company has not been involved “in any way, shape or form” in the proposed BHP bid for Potash Corp., and that it’s not part of any Calgary business community support of Saskatchewan’s position.

He said the company’s only involvement on the issue came in its support for Canpotex, “an excellent marketing agency” for its potash production in Saskatchewan. Agrium has provided background to government agencies, including the government Saskatchewan, who have asked for information on the potash industry over the past couple of months.

Alberta’s conservative impulses have brought substantial support for the Potash deal. “people in the energy industry are very allergic to government interference in their business,” said David MacLean, vice-president of the Edmonton-based Alberta Enterprise Group.

But there is growing unease among some of the top leaders in the province’s powerful oil patch, many of whom have direct access to Mr. Prentice and Mr. Harper.

“There are certainly several senior executives in town that are against the deal,” said one oil patch source. “If they approve Potash, then I think every single large cap CEO in this town recalibrates who could or could not take them over.”

Opposition stems largely from the fear that if Potash Corp. goes, every Canadian company – even those who have styled themselves Canadian champions – is fair game.

“There’s a huge risk. If this goes through, I can’t see how we would keep an Encana or a CNRL in Canadian hands,” said Leonard Waverman, dean of the Haskayne School of Business at the University of Calgary. “I think it’s going to kill Alberta.”