By Rod Nickel
WINNIPEG, Manitoba, Sept 29 (Reuters) - Canada's Liberal and
New Democratic parties, vying to replace the governing
Conservatives in a tight three-way election race, both say they
would clarify rules around foreign corporate takeovers if they
win.
Liberal leader Justin Trudeau, campaigning in Winnipeg on
Tuesday, said foreign investors need clearer rules around
takeovers.
"(Conservative Prime Minister Stephen) Harper continues to
make these decisions on a political basis rather (than) on a
level of clarity and that's why quite frankly we're seeing
global investment hesitant to engage," he said.
Canada requires foreign bids for Canadian firms worth C$600
million ($447.76 million) or more in enterprise value to undergo
a review of whether they provide to Canada a "net benefit," a
term never fully explained.
On that basis, Harper's Conservatives blocked in 2010 a
takeover bid by BHP Billiton Plc BLT.L BHP.AX for Potash
Corp of Saskatchewan Inc POT.TO .
In 2012, Harper approved a $15.1 billion bid by China's
state-controlled CNOOC Ltd 0883.HK for energy company Nexen,
but banned state-owned companies from further oilsands takeovers
except in "exceptional circumstances."
There is uncertainty whether the Canadian government would
allow a foreign company to buy a major tech company like
Blackberry Ltd BB.TO , which is perennially rumored to be a
takeover target.
Conservative Party officials could not immediately be
reached for comment on plans for takeover rules if they are
returned to power in the Oct. 19 election.
The lack of clarity would end under the New Democratic Party
(NDP), said its industry critic, Peggy Nash. In government, it
plans a sweeping review of the Investment Canada Act legislation
and would clarify what type of benefit Canada expects.
"You can't just make up the rules as you go along," Nash
said in an interview.
Takeover rules under an NDP government would also reflect
reciprocity - that Canadians must be allowed to invest freely in
the country of any foreign company that wants to buy a Canadian
firm - Nash said.
Canada has sometimes allowed foreign takeovers after
receiving assurances about jobs. Such promises typically stay
between Ottawa and the company.
This was the case when U.S. Steel Corp X.N bought Canada's
Stelco in 2007. But it failed to meet those commitments after
the financial crisis hit, and later put the troubled unit into
bankruptcy protection.
The NDP would make commitments more transparent, possibly
involving local governments, Nash said.
($1 = 1.3400 Canadian dollars)
(Editing by Jeffrey Hodgson and Matthew Lewis)