Print

Email story

Comment

Letter to the editor

Nationalists wary of foreign takeovers hurting economy

By JIM FOX
Published July 15, 2007

Nationalists are growing more alarmed that foreign takeovers of iconic Canadian companies are eroding the country's economic independence.

Fueling the latest concern is the $38-billion offshore acquisition of aluminum giant Alcan Inc. by Anglo-Australian miner Rio Tinto.

Ken Georgetti, head of the Canadian Labor Congress, said the federal government should review the buyouts over fears Canada could become a branch-plant economy in which absentee owners have less concern for local employees and communities.

Protecting Canadian jobs and the economy "should not be a bad thing," he added.

It's estimated 275,000 manufacturing jobs have been lost in central Canada in recent years by takeovers and shifting production to other countries.

Bank of Canada Governor David Dodge provided a contrary view, saying that over time, foreign-owned firms have made investments in Canada and increased employment levels.

What's most important is that companies are well-managed and take advantage of global opportunities, not who owns them, he said.

Other acquisitions have included Falconbridge, Inco and the venerable Hudson's Bay Co. retail chain, along with paper giant Consolidated Bathurst, which disappeared in name altogether.

Interest rates rise

Canada's central bank increased its key interest rate by 0.25 percent to 4.5 percent to control inflation and warns of a hike in September.

Inflation for the first half of the year was stronger than expected at 2.2 percent in May and could rise to 3 percent this year, the Bank of Canada said.

The bank's comfort target for the consumer price index is 2 percent.

With the booming economy, projections suggest inflation won't drop back to the desirable range for 18 months as the effects of a stronger dollar begin to take hold, forcing down the price of imports.

In brief

- This is a great time to be Canadian, suggests Prime Minister Stephen Harper. Speaking to 700 Conservative supporters at a barbecue in Edmonton, Harper said it's been 40 years since Canada has been as united as it stands today, "despite the occasional squabbling between governments." He credits his government's popularity in Quebec while telling Albertans he wants to give the province five additional seats in the Commons to reflect its growing population.

- The Canadian Embassy in Washington is urging fellow citizens in the southern United States to be prepared as this is hurricane season through Nov. 30. "The key to hurricane or tropical storm protection is preparation," the embassy said. It encourages Canadians to get preparation tips from Public Safety Canada at www.getprepared.ca/risks/hurricanes_e.asp. Canadians should also register with Foreign Affairs in case they need to be contacted while traveling or living aboard at www.voyage.gc.ca.

- Canadians are becoming more alarmed about the rising number of soldiers killed and wounded in Afghanistan. A poll shows 67 percent believe the number of deaths - 66 soldiers and one diplomat - is unacceptably high despite any progress that has been made in rebuilding the war-torn country.

Facts and figures

Canada's dollar turned higher at week's end with news of possible additional interest rate increases. The dollar was valued at 95.54 cents U.S. Friday while the U.S. dollar returned $1.0466 in Canadian funds.

The Bank of Canada's key interest rate is 4.5 percent while the prime lending rate is 6.25 percent.

Canadian markets are higher, with the Toronto Stock Exchange index at 14,379 points and the Canadian Venture Exchange 3,312 points.

Lotto 6-49: Wednesday 4, 14, 21, 29, 36 and 41; bonus 46. (July 7) 10, 19, 25, 31, 37 and 40; bonus 1.

Regional briefs

- "Honest" Ed Mirvish, theater impresario, discount department store owner, philanthropist and former restaurateur, has died in Toronto. He was 92. He opened Honest Ed's discount store in 1948 and later got into the theater business with the Royal Alexandra and Princess of Wales theaters as well as owning the Old Vic in London with his son David.

- Two Alberta men have been arrested on charges of murder in connection with the slayings of four Mounties in 2005. Shawn Hennessey, 28, and Dennis Cheeseman, 23, are accused of assisting James Roszko in ambushing the Mounties on his property near Mayerthorpe. Police haven't commented on their alleged role. Roszko killed himself after shooting Brock Myrol, Peter Schiemann, Anthony Gordon and Leo Johnston.

- Tall ship festival organizer Bill Campbell said the eerie fog that envelops Halifax harbor has created "atmosphere" for the event. The east coast has had much fog and drizzle lately compared with scorching heat in inland Canada. About 25 tall ships and other vessels are touring Nova Scotia.

Jim Fox can be reached at canadareport@hotmail.com.

[Last modified July 14, 2007, 22:07:10]