Oilpatch needs foreign investment: Mulroney

CALGARY – Former prime minister Brian Mulroney expressed confidence in Ottawa’s handling of foreign takeovers in the energy sector Tuesday in Calgary, but warned that foreign investment is crucial to country’s wellbeing.

The Conservative government announced Friday it was blocking Petronas’s proposed $6-billion takeover of Calgary-based natural gas producer Progress Energy Resources because the acquisition by the Malaysian national energy company didn’t meet the “net benefit” test under the Investment Canada Act.

That has raised further uncertainty over the fate of the $15.1-billion bid by state-owned China National Offshore Oil Corporation for Calgary energy producer Nexen, which is also under review by Ottawa.

Mulroney — who was in Calgary as the speaker at the St. Francis Xavier University’s national dinner — told reporters it was his 1980s-era Progressive Conservative government that scrapped the Foreign Investment Review Agency.

Between 1985 and 2008, no foreign takeovers were rejected by Ottawa, he said.

“Canada and Western Canada cannot function without foreign investment,” Mulroney told reporters at the Telus Convention Centre.

“The oil and gas industry requires massive foreign investment to develop the oilsands and other major projects. So obviously, I’m very much in favour of foreign investment because it also gives the opportunity to Canadians to invest elsewhere.”

But Mulroney said the Conservative government is acting properly in following existing rules and “appears to be looking for a little running room” for new legislation.

Prime Minister Stephen Harper suggested this week the Petronas deal may not be dead and said the federal government will soon release a new policy framework on foreign investment.

Frank McKenna, the former New Brunswick premier and Canadian ambassador to the U.S., said it’s time for clearer rules around the “net benefit” test.

Both McKenna, who is chair of the board of St. Francis Xavier Univeristy in Nova Scotia, and Mulroney expressed confidence the Keystone XL pipeline will be approved in the U.S. no matter who wins the presidential election.

And they both backed Premier Alison Redford’s call for a Canadian energy strategy.