Killing the Potash Deal: Principles, or Politics?

The government’s decision to block the takeover of Potash Corp. by Australian firm BHP Billiton has many observers puzzled, especially as the Conservatives had previously vowed to open up Canadian markets.

Opponents of the purchase had argued that potash is too important a strategic resource for Canada to let fall into foreign hands. But the today the Globe and Mail argues, “For all the strengths of Potash Corp., it is not a strategic asset in the sense of being the centre of an industry cluster that generates all sorts of spinoffs in its surroundings. Nor is it a multinational global champion that could plausibly act as the base for Canadian acquisitions abroad.” The Globe wants Industry Minister Tony Clement to explain why he made the decision, but they’ll have to wait. He says he’s legally obligated not to talk about it for 30 days. Maybe he thinks we'll all have forgotten about it by then?

The National Post’s Don Martin fumes “Clement sided with party fortunes in Saskatchewan over the country’s freedom of enterprise reputation.” Had he let the purchase go ahead, the Conservatives would have certainly suffered big electoral loses in Saskatchewan, which until now has been a Conservative stronghold. Martin says halting the deal is the “clearest example of Mr. Harper acting out of raw political pragmatism with no roots in the right-wing ideology his party allegedly represents.”

Martin’s Post colleague John Ivison says it now appears Harper’s “economic policy is being made by Jack Layton — or even Groucho Marx: ‘Here are my principles. If you don’t like them, I have others.’” To avoid further comparisons to those two famously mustachioed men, Harper may want to think twice about accepting this challenge.

Not surprisingly, the Saskatoon Starphoenix is thrilled with Clement’s decision, despite blasting the government's handling of the issue only yesterday. “Editorialists and columnists from Central Canada were preaching the gospel of free enterprise,” the editors write, “ignoring the fact that Canada has been dropped from the Pacific Rim Free-Trade Pact negotiations” because its protectionism of egg and dairy markets, and the fact that Canada recently blocked UAE airlines from gaining more runway space at our airports. The Starphoenix doesn’t acknowledge that a lot of people don’t think those were particularly wise moves either, but at least they set a precedent, albeit a pretty bad one.