After Chinese takeover, Aecon could still bid on infrastructure projects

OTTAWA — The Aecon construction firm will likely be allowed to bid on government-funded infrastructure projects even if Ottawa approves a Chinese state-owned company’s controversial proposal to take it over, an internal federal document says.

Last October, CCCC International Holding Ltd. of China made a $1.5-billion bid to acquire Aecon Group Inc., which has a long history of participation in Canadian construction and engineering projects such as the CN Tower, Vancouver’s SkyTrain, St. Lawrence Seaway and Halifax shipyard.

The Trudeau government has been warned by experts to proceed cautiously when weighing any investment bids by Chinese state firms and to be as transparent as possible in reviewing the proposed deal. The government has also come under domestic pressure to reject the takeover bid.

The federal government announced a full national security review of the Aecon deal in February. At the time, a spokesman for Economic Development Minister Navdeep Bains said that, based on advice from security agencies, the government believed there is “a potential of injury to national security.”

If the deal moves forward, however, the government is unlikely to restrict Aecon’s eligibility to bid on projects funded under Ottawa’s infrastructure plan, according to an internal government document obtained by the Canadian Press.

The federal government has budgeted $180 billion in total infrastructure spending over 10 years.

“It is not anticipated that the change of ownership of Aecon will affect its ability to bid on Canadian infrastructure projects,” reads the document, which was prepared last fall by Infrastructure Canada.

“At this time, there is not enough information available on the transaction or the current and potential role of Aecon in federally funded infrastructure projects under the plan to accurately assess the impact of this transaction on the delivery of the Investing in Canada Infrastructure plan.”

The memo was obtained under the Access to Information Act.

Lu Shaye, China’s ambassador to Canada, said Tuesday there should be no concerns about the proposed acquisition of Aecon because the Chinese side is only focused on business and market interests.

“My first impression, to tell you the truth, [is] that I think the Canadian media or the Canadian public is too sensitive about the Aecon case because Aecon is just a construction company,” Lu said in response to a question about the takeover bid during a news conference at the Chinese embassy in Ottawa.

“From your side, you have your rules and regulations on the foreign companies overtaking Canadian companies. I think for the national security issue it is your internal affairs. The Chinese side does not want to interfere [with] it.”

Lu, who spoke through an interpreter, added that China just wants to ensure Canada has the same standards for Chinese companies as it does for foreign companies from other countries proposing to take over Canadian firms.

The Infrastructure Canada briefing document said all foreign investment transactions undergo a process to determine their net economic benefit for Canada. They are also subject to a national security review.