written by
Curtis Matwychuk-Goodman
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Contents
Section I – Proposed FDI in Potash Corporation by BHP Billiton
Section II – Canadian Rejection of FDI & the Declaration of a Strategically Significant Industry
Section III – International Relations Theoretical Foundation for Canada’s Position
Theoretical Discussion.
Summary.
Bibliography.
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oreign direct investment has been a key component of the development of the modern Canadian economy. Since before confederation in 1867 an economic heritage developed based upon foreign investments from European and American sources. The foreign capital provided basis for much of the infrastructure required to exploit the wealth and diversity of natural resources throughout the farthest reaches of Canada. This paper will explore a most recent example of Canadian rejection of foreign direct investment – the 2010 case where a hostile bid for Potash Corporation of Saskatchewan was rejected on the grounds of preserving national interest. This case is unique because it is the second such case in the past three years that has come to define the investment climate of the Canadian economy under Stephen Harper’s conservative government. This paper will seek to answer the question of whether international relations theory is relevant in the formulation of foreign and domestic policy.
In doing so, this paper will first provide an overview of the case and provide context for why the rejection of foreign direct investment (FDI) in Canada matters. It will explore the nature of the proposed acquisition of Potash Corporation of Saskatchewan (Potash Corp), the largest global supplier of potash, by BHP Billiton Limited (BHP) an Australian company that is currently the world leader in the iron-ore and coal industries, to name a couple. Background information on each company will provide clarity to the importance of the proposed deal. Ultimately this paper will delineate the exact impact such a deal would have on Canadian interests by examining the nature of the global mining industry and the nature of the potash resource for Canada in comparison to the rest of the world. View full article »
