Post-BHP, Canada plans ‘guidance’

OTTAWA: Canada will give investors more clarity on foreign ownership restrictions after BHP Billiton withdrew its hostile $40-billion offer for Potash Corporation of Saskatchewan following an initial rejection.

“The government will be in a position not only to give reasons for the decision but to give broader guidance to the investment community on the kind of foreign investment it is and is not seeking,” said Prime Minister Stephen Harper on Sunday, hours before BHP said it abandoned the bid.

Clement told reporters in Toronto last night he rejected the bid in part, due to concerns that BHP wouldn’t bring new expertise or increase production. BHP doesn’t currently produce Potash and probably couldn’t bring improved mining techniques, said Clement.

“It had become completely inevitable that BHP would withdraw rather than face a second rejection,” said Mark Connelly, a New York-based analyst with Credit Agricole SA.

Harper this week attended a summit of Group of 20 leaders in Seoul, where he held bilateral talks with Australian Prime Minister Julia Gillard. Harper, who spoke on Sunday at the Asia-Pacific Economic Co-operation summit in Yokohama said he and Gillard spoke about BHP though he didn’t provide details.

Foreign direct investment in Canada more than doubled in the past 10 years, reaching C$549 billion in 2009. Since Harper first became prime minister in 2006, foreigners have spent $367 billion to acquire 2,391 Canadian companies, while Canadian businesses have spent $310 billion to buy 2,866 foreign firms, Bloomberg data shows.