Overview

There have been many developments in the topic of foreign investment over the past several months including:

·   A decrease in Canadian dependence on U.S. investments

·   An increase in the diversity of trade between Canada and other countries especially China.

·   Starting or completing trade ties with countries like Russia, India, Sri Lanka, Colombia, Honduras, Jordan, Panama, Japan, South East Asia, the European Union, and Peru within the past 6 years

·   Increasing foreign acquisitions of Canadian energy companies

·   Changes in foreign policy, making it less passive and more difficult to take advantage of

·   An influx of foreign retailers moving to Canada, with no signs of slowing down

·   Problems with the telecommunications industry that has discouraged foreign investment

·   Increased purchase of natural resources by emerging countries like China and India

·   Encouragement of foreign acquisitions with two major energy companies (Daylight Energy and Opti Canada) sold to foreigners

·   Possibility of joining the Trans-Pacific Partnership

·   Canadians lose beef exporting markets, like South Korea, to the United States

·    U.S. treasury markets continue to be safe haven for uneasy investors who switch from Canadian treasures to American ones

·    Possibility of easing uranium mine ownership rules so that a foreign investor can own 100% of a uranium mine

·    Keystone XL pipeline deal pushed off until 2013, with little hope of being allowed by U.S. government

·    Ruling by WTO against the U.S. country of origin labels which discouraged the purchase of Canadian cattle and hogs

·    Attempts to increase foreign takeovers and investments through the slackening of laws against complete foreign ownership

Trade between Canada and the U.S. experience such unpredictable highs and lows that it makes sense for Canadians to look into other trading partnerships. U.S. investment in Canada has fallen from 64.6 per cent in 2001 to 54.5 per cent in 2010. However, trade with Asia-Pacific has grown from 4.5 per cent in 2001 to 11.2 per cent in 2011. Trade with other countries is also on the rise with countries like Sri Lanka approaching Canada for free trade agreements for the first time since 2009. A mark of reduced Canadian dependence on the U.S. is the Keystone XL pipeline, which is set to go through no matter what. If the U.S. does not allow the pipeline, it will be built across Canada to send oil to Asian markets. Either way, the pipeline will be built.

         Since the rejection of BHP’s attempt to takeover Potash Corp, Canada has become much more open to foreign acquisitions of Canadian firms. This year alone has seen two takeovers of major energy companies. China in particular has expressed interest in Canadian energy companies. India’s energy needs will quintuple by 2015. This growing need can be filled by Canadian energy companies if the government does not slacken foreign ownership regulations too much. So far, the Canadian government has only shown interest in short-term benefits instead of thinking about the longevity of their decisions.

         The lucrative Trans-Pacific Partnership (TTP), which represents 28 per cent of the world’s GDP, is just out of Canada’s reach. Their unwillingness to compromise on the Supply Management policy led them to lose the ability to be a part of this group. Many members also are not in favour of Canada rejoining the TPP due to the Supply Management policy. Without this partnership, Canada would have to bolster trade with the Asian Pacific countries on its own. This would be much more difficult and less profitable.

  
          The natural resources industry is showing no signs of slowing down. Foreign investors in emerging markets like China and India will be investing even more in this sector as their populations grow. Unfortunately, the telecommunications sector is on the decline. Wind Mobile’s owner regrets his decision to come to Canada and encourages others not to make the same mistake. Investors will think twice before investing in the Canadian telecommunications sector and will probably choose a less volatile market like Australia or the United States.
   
          In the future, it seems that Canada will continue its search for more trading partnerships in countries other than the United States. I think that the next time there is economic problems in the U.S.; Canada will not feel the brunt of it as it is less reliant on the U.S. for investment. I also think that the deals with the European Union, India and China will go through successfully. However, I am skeptical about the Trans-Pacific Partnership. With the high opposition of many members and Canada’s unwillingness to change its Supply Management policy, it seems unlikely. I think it will boil down to Canada having to choose between the Supply Management policy and entrance into the Trans-Pacific Partnership. The endless business opportunities this market will offer Canada leaves little doubt that Ottawa will choose the Supply Management policy over the TPP. Furthermore, there are few Canadian businesses that make an impact on the global stage, so for now Canada relies on the investments of foreign businesses. They are especially interested in the commodities sector. If Ottawa slackens regulations like speculated, Canada will see a lot of its commodities end up in foreign hands. This does not leave much for the future which will definitely pose problems as Canada is heavily reliant on the commodity sector. Canada needs to create more competition to spur innovation and continue to move away from the unstable U.S. markets if it wants to see more growth and prosperity.

February Keystone deadline tied to payroll tax rider

Posted: Jan 2, 2012 11:23 AM ETThe Associated Press

President Barack Obama and Congress are starting the election year locked in a tussle over a proposed 1,700-mile oil pipeline from Canada to Texas that will force the White House to make a politically risky choice between two key Democratic constituencies.

Some unions say the Keystone XL pipeline would create thousands of jobs. Environmentalists fear it could lead to an oil spill disaster.

A law Obama signed just before Christmas that temporarily extended the payroll tax cut included a Republican-written provision compelling him to make a speedy decision on whether to build the pipeline. The administration is warning it would rather say no than rush a decision in an election year.

It's a dicey proposition for Obama, who enjoyed strong support from both organized labour and environmentalists in his winning 2008 campaign for the White House.

Environmental advocates, already disappointed with his failure to achieve climate change legislation and the administration's decision delay new smog standards, have made it clear that approval of the pipeline would dampen their enthusiasm for Obama in this November's election.

Some liberal donors even threatened to cut off funds to Obama's re-election campaign to protest the project, which opponents say would transport "dirty oil" that requires huge amounts of energy to extract.

If he rejects the pipeline, Obama risks losing support from organized labour, a key part of the Democratic base, for thwarting thousands of jobs.

Obama appeared to have skirted what some dubbed the "Keystone conundrum" last month when the U.S. State Department announced it was postponing a decision on the pipeline until after the 2012 election. Officials said they needed extra time to study routes that avoid an environmentally sensitive area of Nebraska that supplies water to eight states.

The affected area stretches just 65 miles through the Sandhills region of northern Nebraska, but the concerns were serious enough that the state's governor and senators opposed the project until the pipeline was moved.

Republican Gov. Dave Heineman, who opposed the initial route, says he supports efforts to accelerate the project, noting that provisions in the payroll tax bill allow the project developer to find a new route avoiding the Sandhills.

The new route would have to be approved by Nebraska environmental officials and the State Department, which has authority because the pipeline would cross an international border.

The pipeline would carry oil from tar sands in western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. The project's developer, Calgary-based TransCanada, says the pipeline could create as many as 20,000 jobs, a figure opponents say is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction.

The payroll tax cut law gives the Obama administration 60 days to decide whether to allow construction of the pipeline.

An "arbitrary deadline" for the permit decision would compromise the process, short-circuiting time needed to conduct required environmental reviews and preventing the issuance of a permit, the State Department warned in a written statement on Dec. 12. Obama administration officials confirmed that view after the payroll tax bill was approved.

Republicans call the threat little more than an excuse that allows Obama to placate environmental groups while not rejecting the pipeline outright.

"The only thing arbitrary about this decision is the decision by the president to say, `Well, let's wait until after the next election,' " the Speaker of the Republican-led House John Boehner said.

Boehner and other Republicans say the pipeline would help Obama achieve his top priority — creating jobs — without costing a dime of taxpayer money. They hope to portray Obama's reluctance to approve the pipeline as a sign he favors environmentalists over jobs.

Russ Girling, TransCanada's president and chief executive, said his company would do whatever is necessary to make sure the project is approved.

"We've had more than enough surprises on this," said TransCanada spokesman Shawn Howard.

In Nebraska, where the pipeline faces strong resistance, state officials are awaiting an environmental study that will determine a new route. Officials have said the review will take six to nine months.

Some landowners in the Sandhills celebrated the decision to reroute the project, but the pipeline's strongest opponents say they still have concerns about the prospect of the government using its power of eminent domain to seize land, as well as liability issues in case of a spill.

"Republicans have bullied their way to get a reckless rider attached to a bill that was supposed to be about helping middle-class families," said Jane Kleeb, executive director of the group Bold Nebraska, which opposes the pipeline.

With the bill signed into law, Obama "must do the right thing for our land, water and families' health by denying the pipeline permit," Kleeb said.

Project supporters say U.S. rejection of the pipeline would not stop it from being built. Canadian Prime Minister Stephen Harper has said TransCanada could pursue an alternative route through Canada to the West Coast, where oil could be shipped to China and other Asian markets.

"Canada is going to develop this no matter what, and that oil is either going to come to the United States or it's going to go to a place like China. We want it here," said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee.

Opponents call the West Coast option farfetched, noting that Canadian regulators have announced a one-year delay for a similar project that would carry tar sands oil to British Columbia, on Canada's western coast.

Native groups strongly oppose both the Keystone XL and the Northern Gateway pipeline proposed by TransCanada rival Enbridge. Canada's First Nations have constitutionally protected treaty rights and unsettled land claims that could allow them to block or significantly delay both pipelines.

Unions are watching closely. Unemployment in construction is far higher than other industries, with more than 1.1 million construction workers jobless, said Brent Bookers, director of construction at the Laborers' International Union of North America.

"For many members of the Laborers, this project is not just a pipeline, it is a lifeline," Bookers said, adding, "Too many hard-working Americans are out of work, and the Keystone XL pipeline will change that dire situation for thousands of them."

Roger Toussaint, international vice president of the Transport Workers Union, opposes the pipeline.

"The dangers of the pipeline are compelling, and no one should believe the claims of either the Republican leadership or the energy companies, with respect to the project being shovel ready or with respect to the number of jobs it's going to produce," he said.

http://www.cbc.ca/news/business/story/2012/01/02/keystone-pipelines-congress.html

John Baird crafts Canadian foreign policy with a hard edge

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OTTAWA— From Wednesday's Globe and Mail
Last updated Sunday, Jan. 01, 2012 6:44PM EST
By: Campbell Clark

The man rewriting Stephen Harper’s foreign policy for majority-government times makes no apologies for stepping on a few toes. From climate change to Israel, Foreign Affairs Minister John Baird is willing to shrug off the gripes.

After five years of minority government, when a focus on short-term politics meant leaving relations with some parts of the world untended, Mr. Baird now has the task of broadening Conservative foreign policy and planning for the longer term.

But it’s not a mandate to please all. The image of Canada seeking to play honest broker and likable conciliator on the world stage is being changed by a deliberate edge to Conservative foreign policy. There’s a willingness to send the military, a high priority on economics and less qualms about raising hackles.

“Stephen Harper said it and I’ve said it: ‘We don’t just go along to get along,’ ” Mr. Baird said in a year-end interview. “There’s 194 countries in the world. I don’t agree with their foreign policy on everything,” he said. “You know the Russian Foreign Minister? His job is to stand up for Russia. My job is to stand up for Canadian values and Canadian interests.”

In a year when the world shook from financial crises and Arab uprisings, Canada’s place in it was shifting, too.

Even before Canada pulled out of a ground war in Afghanistan in July, it joined an air war in Libya. When it was over, Mr. Harper touted victory, and promised a military ready for more. He blocked part of a G8 leaders’ statement urging peace talks on Israel, and bucked the UN majority in vocally opposing a Palestinian bid for statehood. The Harper government closed a deal to harmonize security with the U.S. in return for projects to speed border traffic. And Canada made itself a symbol by withdrawing from the Kyoto climate-change accord.

Mr. Baird’s public image as a partisan pit-bull might make it seem that he was chosen to make foreign policy combative. But that’s a stage persona for a politician who is affable in person. As Foreign Minister, he worked to build all-party support for the Canadian mission in Libya. Foreign diplomats give him high marks for being more accessible and engaged than his predecessors.

But he is a thick-skinned politician who doesn’t wince over disagreements or worry about a little blowback. Canada was once alone on climate change for demanding all major emitters join a new treaty, but it’s a common view now, he said, and Canada’s pro-Israel stand at the United Nations has hardly affected its relations with others.

“I don’t have many foreign ministers or many foreign governments who raise climate change with me. In eight months, maybe two or three times,” he said. “I went to the Middle East for five days. No one raised our voting record at the UN.”

In the big events of 2011, Mr. Harper’s government kept a cold, calculating eye. It reacted with caution to Arab Spring protests in Egypt, but sent fighter jets to Libya.

Mr. Baird’s first trip as Foreign Minister, to meet rebel leaders in Benghazi, marked him the most – meeting professionals and public servants risking their futures in a struggle to oust Moammar Gadhafi. Ottawa went in big with a substantial military contribution, but Mr. Baird admitted that before the stunning collapse of Gadhafi forces, he feared a long war, and a death toll of 100,000 or 250,000.

The Tories’ cooler response to uprisings in Egypt and Tunisia remains marked by the view that a “big chunk” of the revolts were protests against unemployment and cronyism, not purely a call for Western-style democracy. Amid the election of Islamists in Egypt, Mr. Baird said the goal should be to move the region to more civil society, for intellectual freedom, and less corruption – and caution is still warranted.

The harder edge isn’t universal. On a trip to Beijing, Mr. Baird looked like a man trying to get along, calling China a “friend,” as the Harper government seals a new era after a chilly start in ties – but that, too, is a function of hard-edged economic interests with a major trading partner.

Now, Mr. Baird’s task is to broaden Canada’s foreign policy beyond the few priorities of minority years, like the United States, Afghanistan, China and Israel. A foreign-policy review is quietly under way, and Mr. Baird has signalled efforts to renew ties with untended regions such as Southeast Asia.

The short-term survival politics of successive Liberal and Conservative minorities have prevented ministers from travelling and making connections abroad, and limited planning, he said. “Governments are sometimes criticized for looking at things in four-year windows,” he said. “We’ve been looking at things in four-day, four-week and four-month windows for the last seven [years]. And that’s not healthy.’

The priority, as the United States and Europe face challenges and Canada needs to diversify trade, is economics. “That is the lens,” Mr. Baird said. With the U.S., Canada had success in reaching a border accord, but experienced a setback when the Keystone pipeline extension was delayed, he said. With China, Canada wants a foreign-investment agreement; with the EU, a trade deal.

But Canada needs to expand its foreign-policy planning beyond the biggest players, he said. “The countries that are going to be really important for Canada in the future also include Turkey, Vietnam, Indonesia, Nigeria. Those are pretty important.”

http://www.theglobeandmail.com/news/politics/john-baird-crafts-canadian-foreign-policy-with-a-hard-edge/article2284834/

Apple retail mulling Brazil store as Canadian expansion continues

By Mikey Campbell

Published: 02:18 PM EST (11:18 AM PST)
Apple is said to be weighing its options in opening a flagship store in Brazil, while the company continues to expand across Canada with a new mall location in Ontario.

In an interview on Thursday, an official Brazilian Apple reseller said the Cupertino, Calif. company is thinking about debuting an official Apple Store in the world's fifth most populated country, according to website G1.

Germano Grings, vice president of Brazil's largest Apple reseller Herval, said that he is sure that Apple is interested in opening their own shop in Brazil, which would add to the 31 existing official "premium" resellers spread across the country.

"They will not open where we are," Grings said of possibility of a future Apple Store in Brazil. He goes on to say that Apple usually opens only one or two flagship stores in important capitals, however Grings fails to estimate what effect an official location would have on his company's business.

The initial investment in opening a licensed Apple retail store is high, and Grings estimates that Herval spent between $1 million and $5 million for each of its 19 stores. Apple holds the premium retail outlets to a high standard, and owners have little control over terms of operation.

"Today, there are Apple employees who make over our stores," Grings said. "[It] works like a religion, a bible. The [Apple premium resellers outlet] is a copy of a U.S. Apple store, you can't do anything about of it."

Grings warns that entering the Brazilian market is a difficult undertaking, however he believes that iDevices will one day become as popular in South America as they are in countries like the U.S.

"I poke a lot [of fun] and even joked that if they need a partner, I'm here and open up for them," Grings said. "Imagine a store like 5th Avenue in New York, on Avenida Paulista [São Paulo]? How wonderful would it be?"

In addition to a possible Brazil debut, news broke that Canada's newest Apple Store will be located in Ontario, according to Apple retail blog ifoAppleStore.com.
The store is planned to open in London, Ontario's Masonville Place mall, and is fifty miles away from the Conestoga Mall Apple Store in Waterloo.

Real estate sources say the company is ready take over the nearly square 6.176 square-foot space with a 71-foot facade that the bankrupt Eddie Bauer will vacate this week.

As further confirmation, city officials are said to be reviewing an unnamed $3 million construction project within the mall that sports the iconic Apple logo.

http://www.appleinsider.com/articles/11/12/30/apple_retail_mulling_brazil_store_as_canadian_expansion_continues.html

Chinese firms seek overseas expansion in crisis

By: Xinhua
December 29th, 2012
BEIJING - While many transnational companies tighten investment in developed economies in face of a lingering economic crisis to ease profit declines, Chinese firms see possibilities of making their investments mutually beneficial there.

China Three Gorges Corp (TGC), the operator of the world's biggest dam, last week won a bid to buy a 21 percent stake in the Portuguese utility Energias de Portugal for 2.69 billion euros, marking the first time for a large Chinese firm to join the privatization of eurozone nations amid the continent's debt crisis.

The deal is Portugal's first and biggest project of a privatization program under a 78-billion-euro bailout package agreed by the EU and the International Monetary Fund (IMF) in May. It is also expected to boost the Chinese power generator's overseas expansion.

The move highlights the willingness of Chinese firms to invest and help invigorate struggling economies against the backdrop of the worsening eurozone debt crisis and rising global uncertainties.

Portugal's Treasury Secretary Maria Luis Albuquerque hailed the TGC proposal as "a vote of confidence in the Portuguese economy."

The desire of Chinese investment, which can bring local jobs and help consumers, is again on a rise in the EU and the United States based on confidence in China's growth, said Lin Shunjie, deputy secretary general of the China Chamber of International Commerce.

"The debt woes indeed provide Chinese companies with good business opportunities," Lin said, noting that more deals have been concluded this year as weakened economies seek buyers for their distressed assets to help resolve financial problems.

Chinese firms have been on a buying spree this year. Following Chinese oil giant CNOOC's acquisition of Canadian oil sands developer OPTI in July, Sinopec recently completed a 2.2-billion-Canadian-dollar transaction to takeover Canada's Daylight Energy Ltd.

China's Yanzhou Coal Mining also said last week it has proposed buying 77 percent of Australia's Gloucester Coal. The deal could create Australia's largest listed coal firm if approved.

Since China's entry into the World Trade Organization in 2001, the country's outbound direct investment (ODI) has been on the rise, especially after the outbreak of the global economic crisis.

The country's ODI hit $68.81 billion in 2010, taking up 5.2 percent of global capital flows and exceeded the ODI of both Japan the United Kingdom for the first time to become the fifth largest in the world.

China's overseas investment has boosted its own growth and contributed positively to recipient countries, said Deputy Commerce Minister Chen Jian at an investment forum last month.

Chinese overseas affiliates, which totaled 16,000 units as of 2010, employ nearly 800,000 people and pay $10 billion in taxes each year, according to an IMF study.

China's overseas investment is likely to grow 20 to 30 percent annually in the next two to three years, an Ernst & Young report said.

Over the past decade, Chinese investment has proved nonthreatening to many countries, but instead, it can help them pull through crises; yet Chinese investors still face unfair treatment, Lin said.

Many proposed Chinese deals in the overseas market have been blocked by national security or technology issues, Lin said. The Chinese telecom giant Huawei has repeatedly been rebuffed from making deals in the United States over security concerns during the past few years.

In the latest outcry, China's Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade Co. were rejected in a deal to purchase Swedish automaker Saab, as Saab's former parent company GM refused the technology license transfers. The refusal finally led to Saab's bankruptcy.

To create a fair environment for Chinese investment, Lin called for developed economies to "remove political factors in reviewing Chinese deal proposals in order."

Besides external factors, Chinese investors should also recognize their own weaknesses to cope with these setbacks, said Wang Zhile, director of Beijing New-Century Academy on Transnational Corporations.

Wang said Chinese firms are increasingly challenged by compliance management, which requires familiarity with local laws and rules and corporate regulations in obtained businesses. Communications with non-governmental organizations and focusing on local public appeals are also important.

"We cannot count on the outbreak of financial crisis to lift China's 'going global' drive, but Chinese firms can take the chance to improve their competitiveness," Lin said.

http://www.chinadaily.com.cn/usa/business/2011-12/29/content_14349928.htm

Sears faces uncertain future in Canada: analyst

Updated: Wed Dec. 28 2011 8:22:32 PM

CTVNews.ca StaffSears

Canada won't close any stores here even as retail competition heats up and consumers look for deeper discounts on merchandise.

Sears Holdings Corp. in the U.S. announced plans Tuesday to close between 100 and 120 Sears and Kmart stores and cut inventory after slow sales during the holidays. The company has more than 4,000 stores in the U.S. and Canada.

The Canadian retailer has made changes recently to its management team because of falling sales, but some analysts think it should probably close stores that aren't performing well.

Sears Canada laid off 70 employees from its head office in Toronto last month and lost nearly $47 million in the previous quarter.

Its stock fell more than five per cent in Wednesday morning trading on the Toronto Stock Exchange.

One analyst told Canada AM on Wednesday the company needs to find its niche or it will lose to more aggressive competitors.

"Whenever you see a retailer doing the types of rationalizations that Sears is doing, clearly this does not bode well," said Robert Soroka in an interview from Montreal.

"There's obviously some concern as to whether they could sustain themselves," he said.

Retailers like Sears must also consider the addition of aggressive U.S. companies like Target to the marketplace, which plans to open about 135 stores in Canada beginning in March 2013, and the relative success of The Bay, which has been offering consumers deep discounts, Soroka said.

"Sears has maintained is antiquated position for a very a long time. It is a mid-range market retailer for a market that is really diluted," he said.

While The Bay also considers itself a mid-range market retailer, its promotions and discounts appeal to cost-conscious consumers, he said.

"They are very strong with respect to promotion and as a result they are getting that discount consumer," Soroka said.

It's hard to say whether these factors will force Sears to close stores or cut inventory in Canada, he said.

A spokesperson for Sears Canada said the company has no plans to shutter stores.

"There are no Sears stores being closed in Canada and people shouldn't speculate about something that isn't happening," Vincent Power, director of corporate communications for Sears Canada, told CTVNews.ca by phone.

"It's a U.S.-based story and to talk about Sears stores closing in Canada is erroneous."

Soroka said the biggest change in the market is brand loyalty, which doesn't exist in the Canadian retail landscape anymore.

"We're very sharp consumers. We're looking for the best deal, the best merchandise. We're not necessarily committed to a particular brand name," Soroka said.

If Sears is counting on consumer loyalty to carry its brand in Canada, it's "putting its money on the wrong horse," he said.

http://ottawa.ctv.ca/servlet/an/local/CTVNews/20111228/sears_canada_cuts_soroka_111228/20111228/?hub=OttawaHome

Canadian Auto Rebound Lags Behind US as Loonie Continues to Rise

28/12/2011 | By: Jason Siu

Reports are coming in that investment in Canada’s auto plants may fall to just $1.2 billion this year, the lowest since the mid-1980s. It’s also 62-percent lower than the past decade’s average according to Bank of Nova Scotia, which means Canada will continue to lag behind. To compare, Ford is planning to invest $13.3 billion in US plants over the next four years, leaving very little funding left for Canada’s plants. In fact, Ford this year closed their St. Thomas Assembly Plant in Ontario that had made their Crown Victoria and Lincoln Town Car.

This is a vast change of events compared to 2003, when Ontario, Canada was the largest North American producer of vehicles – taking the spot from the state of Michigan. But now their surging currency and companies in the US cutting labor costs has shifted investment back to the States.

Another factor impacting the spending is the fact that the US has a new labor agreement with the United Auto Workers (UAW), helping level the labor costs compared to foreign rivals. The Canadian Auto Workers (CAW) however are working with the automakers for a new contract for 2012. Unfortunately though, the CAW has fought many of the cost cuts the UAW has accepted.

http://www.autoguide.com/auto-news/2011/12/canadian-auto-rebound-lags-behind-us-as-loonie-continues-to-rise.html

2012 Looks Promising for Energy Investors

By Abantika Chatterjee

Rising oil prices and increased demand for oil and natural gas have set the ball rolling for exploration and production for the new year. With oil prices hovering around the $100-per-barrel mark, companies across the world have increased their focus on production. A recent survey by Barclay's Capital showed that major E&P companies have hiked their planned expenditures for 2012, hitting a cumulative figure of $600 billion. This indicates a feverish pitch in E&P activities in 2012 that should rake in moola for the companies and their investors. Read along and I will tell you where well-known energy companies are focusing their budgets in 2012.

The numbers

Company	2011 Capital and Exploratory Expenditures (in billions)	2012 Estimated Budget (in billions)	Change
ExxonMobil(NYSE: XOM)	$33-$37	$33-$37	--
Chevron(NYSE: CVX)	$28.0	$32.7	17%
PetroChina	$26.8	$30.0	12%
Royal Dutch Shell	$25-$27	$25-$27	--
Total(NYSE: TOT)	$20	$23	15%
BP(NYSE: BP)	$19	$20	7%
ConocoPhillips(NYSE: COP)	$12	$14	17%
Chesapeake(NYSE: CHK)	$5.0-$5.4	$5.4-$5.8	7%

Company filings, Web sources.
We can see that four of the companies are exhibiting double-digit growth in their budget allocation. A huge portion of the budget is going to go into finding and developing natural gas reserves since the world's energy demand has been witnessing a shift toward it. The emergence of natural gas as the best alternative to the continually depleting oil reserves has pushed oil majors and minors to grab land in newly found unconventional reserves. This has also created enough opportunities for large-cap oil-field-services companies such as Schlumberger, Baker Hughes, Halliburton, and Weatherford, as the unconventional plays require lot of high-tech equipment and severe-site maintenance.
Focus areasNow let's shed some light on the places the money will go. Projects witnessing increased capital spending are Chevron's Wheatstone and Gordon Australian liquefied natural gas (LNG) projects; the Australia Pacific LNG project, which is a joint venture of ConocoPhillips, Origin Energy, and Sinopec; and Exxon and Interoil's Papua New �Guinea projects. Apart from being rich in reserves, Australia and Papua New Guinea are well-located to serve Asia, with China and India acting as perfect markets. After the Fukushima Daiichi nuclear disaster in March, Japan has also become a target market for project operators in the region as natural gas is seen as safer than nuclear energy.
Other places drawing oil and services companies are the U.S. shale plays of Bakken, Barnett, Eagle Ford, Woodford and Marcellus. Among them, Bakken has experienced the highest growth in the past five years. According to the U.S. Geological Survey, there are 3.65 billion barrels of recoverable crude oil present in the Bakken. ExxonMobil has 410,000 net acres of leasehold and seven operating rigs in the Bakken. The company has also invested in the Woodford shale.
The oil sands of Canada are also attracting investments from both domestic and international players. The oil sands provide these players a good source of supplying crude oil to the U.S. If TransCanada gets approval for its Keystone XL pipeline, oil sands prospects will brighten up further. A majority of these projects are scheduled to operate from 2014, with a few adding to production post-2017, and some as early as 2012.
Key driversHigh oil prices are one of the main drivers behind the increased capital spending of oil majors. With oil futures settling between $101 and $110 for WTI and Brent, respectively, oil and gas companies have increased efforts to produce more and cash in on the price rise.
The increased demand for natural gas is another driver persuading companies to add more natural gas assets to their project portfolios. Demand from emerging markets and shale discoveries in Latin America, apart from the proven reserves of the U.S., Qatar, Iraq, and Canada have given enough reasons for energy companies to invest.
Foolish bottom line Rising oil prices and burgeoning natural gas demand stand to play a vital role in shaping the energy sector in 2012, and the increased budget of oil players seems worth spending. If you're looking for top energy plays to profit of the oil boom, check out The Motley Fool's "3 Stocks for $100 Oil." You can download this special report for free by clicking here.

http://www.msnbc.msn.com/id/45796716/ns/business-motley_fool/t/looks-promising-energy-investors/

Retail invasion of Canada shows no sign of slowing

Mon Dec. 26 2011 6:48:12 AM | The Canadian PressTORONTO —

The influx of U.S. and foreign chains to Canada shows no sign of slowing as we head into a new year.

Marshalls, Express and Topshop were some of the retailers that opened up shop in Canada in 2011.

Another U.S. company appears poised to launch.

Catherine Fisher of Ann Incorporated, the parent company of Ann Taylor and Loft, says a formal announcement hasn't been made.

But she says they're "actively pursuing entry into the Canadian market" expected for late in 2012.

And U.S. discount giant Target is set to enter the Canadian market in 2013.

Daniel Baer of Ernst and Young says Canadian retailers will need to exploit their knowledge of the consumer and use the fact that they're homegrown to their competitive advantage.

He also notes companies won't just be battling for dollars.

Baer foresees more competition for retail talent like personnel to fill management and head office positions.

Kathy Perotta of The NPD Group says Canadian retailers need to work towards keeping -- and growing -- their existing share of the pie.

She says the total apparel and basics market is worth roughly 23.3 billion dollars, so new entrants to Canada are going to take their share from somebody.

http://www.cp24.com/servlet/an/local/CTVNews/20111226/121226_retail_US_Canada/20111226/?hub=CP24Home

Harper sees trade deals as key to his political success

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JOHN IBBITSON |Columnist profile
OTTAWA— From Monday's Globe and Mail
Published Sunday, Dec. 25, 2011 7:25PM EST
Last updated Sunday, Dec. 25, 2011 11:21PM EST

Others may judge the Harper government by what it achieves, or fails to achieve, on the environmental front, with first nations or in making government more accountable. But Stephen Harper judges himself on how well his government manages the economy. In that context, nothing is more important to the Conservatives than trade.

By this time next year, either the Prime Minister will have one major agreement in his pocket and several more in the works, or this administration, by its own accounting, will have failed one of its most crucial tests.

The good news for the Tories is that they may soon clear the first and biggest hurdle. Government sources predict that a signed Canada-European Union Trade Agreement will be in place by February or March.

Some of the terms of that agreement will be contentious. EU businesses will have greater access to Canadian government-procurement contracts, for example. And dairy quotas for European imports will probably be raised, in exchange for increased quotas for Canadian pork exports.

But the deal is likely to be worth the concessions. Despite its problems – and they are legion – the EU remains the world’s largest common market, with 500- million people and a collective GDP of $16-trillion.

Improving access to that market is vital to this country’s long-term prosperity, which is why provincial governments are reportedly onside. (Negotiators also insist that the deal will clear all 27 European parliaments without difficulty. We’ll see.)

The EU agreement is vital to the Harper government’s second-most important goal: getting the member nations of the Trans Pacific Partnership to accept Canada’s application to join.

The TPP is emerging as a potentially powerful new trade bloc, as the Obama administration seeks to fashion a Pacific economic consortium that could rival China in size and influence.

Canada wants to be part of the partnership but has been shut out because the Conservative government continues to protect dairy and poultry farmers from foreign competition.

The word is that the Conservatives will use the agriculture provisions of the EU treaty to show the Pacific nations that Canada is willing to be flexible on agricultural subsidies. Maybe it will work; maybe it won’t.

If it doesn’t, then Mr. Harper will have to make an enormously difficult choice: give up on joining the Trans Pacific Partnership, which would be a severe blow to this country’s Pacific aspirations, or scrap supply management, which will enrage the all-powerful dairy lobby.

At the same time, the Harper government is exploring with the Chinese whether there is enough common ground to launch talks on a free-trade agreement, or whether to pursue sectoral negotiations instead.

The Conservatives have already negotiated a Foreign Investment Protection Agreement, or FIPA, as part of their trade negotiations with India. Both countries are waiting until Mr. Harper visits there next year to formally announce it.

As well, International Trade Minister Ed Fast will decide in 2012 whether to restart the stalled trade negotiations with South Korea, or abandon them entirely. Pork producers are anxious to see a deal, since the U.S. and Korea now have one, but concerns over Korean protectionism in the auto sector are holding that agreement back.

Hopes for progress in trade talks with Mercosur, the South American trade bloc, are fading. Argentina, in particular, is more interested in throwing up new barriers to trade than in tearing down existing ones.

But if the Harper government can sign agreements with the EU, China and India, and worm its way into the Pacific Partnership talks, it will be able to claim a robust record in expanding and diversifying trade.

If it can’t, then the Conservatives’ talk of protecting jobs and expanding overseas business opportunities will have proven to be just that: talk.

By the end of next year, we should know which it is.

SOURCE: http://www.theglobeandmail.com/news/politics/harper-sees-trade-deals-as-key-to-his-political-success/article2283361/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Politics&utm_content=2283361

China Petrochemical Corp. Completes Purchase of Daylight Energy

By Benjamin Haas

Dec. 24 (Bloomberg) -- China Petrochemical Corp., the nation’s biggest oil refiner, completed the purchase of Canada’s Daylight Energy Ltd. for about C$2.2 billion ($2.16 billion), the company said in an e-mailed statement yesterday.

Sinopec, as the Chinese company is known, said it paid C$10.08 a share in cash for Calgary-based Daylight.

Cong Peixin, a spokesman for the China Petrochemical unit that carried out the transaction, declined to elaborate on the statement. Daylight confirmed the completed sale in a statement released yesterday.

The purchase gives the Beijing-based company access to more than 300,000 acres of land in areas rich with oil and natural gas, after falling crude prices made valuations attractive.

Sinopec Group, China National Petroleum Corp. and Cnooc Ltd. are seeking to gain technology through partnerships in order to develop China’s shale-gas reserves, estimated to be larger than those in the U.S.

China, the world’s biggest energy consumer, has partnered with Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. to explore possible shale wells.

Chinese companies have announced $18.3 billion worth of bids this year for overseas oil and gas exploration and production companies, according to data compiled by Bloomberg. Cnooc bought Canada’s Opti Canada Inc. in November for $34 million in cash, agreeing to take on $2.4 billion in debt.

Daylight’s proven and probable reserves rose 46 percent to the equivalent of 174 million barrels of oil at the end of 2010, the company said March 1. The company’s production was 35 million barrels in the third quarter, according to data compiled by Bloomberg.
http://www.businessweek.com/news/2011-12-27/china-petrochemical-corp-completes-purchase-of-daylight-energy.html

Asian demand for resources good news for British Columbia

By Darah Hansen, Vancouver Sun; With Files From Postmedia News December 22, 2011

British Columbia stands to be a big winner next year as Canada succeeds in diversifying its export markets for its wood products, according to the Conference Board of Canada.

B.C. wood has gained a significant share of China's wood imports over the past five years, increasing from less than one per cent in 2006 to 14 per cent in the first nine months of 2011, the board said in its report on the wood products industry.

At nearly $1 billion so far this year, the value of wood exports to China was more than twice last year's level for the same period, and is expected to continue to rise over the next five years.

"The China story is definitely a huge deal for B.C. wood producers," said Graham Sheppard, an industry analyst with ERA Forest Products Research.

Approximately 30 per cent of B.C. softwood lumber exports has gone to China in 2011, accounting for more than 95 per cent of Canada's total exports to the country.

Diversification into China, and, to a lesser degree, Japan, comes as Canada seeks to reduce its dependence on its next-door neighbour.

In 2006, 86 per cent of Canadian wood exports were sent to the United States, with B.C. wood accounting for about half the total. So far this year, the national share was 63 per cent. Michael Burt, director, Industrial Economic Trends, cited the fragility of the U.S. economy and endless rounds of litigation over softwood lumber as key reasons for the diversification push.

As a result, profits before taxes will rise to $565 million in 2012 from $283 million in 2011. Extending the forecast out to 2016, profits should almost double again from 2012 forecast levels to $1.04 billion.

http://www.vancouversun.com/business/Asian+demand+resources+good+news+British+Columbia/5897463/story.html

[Exclusive] Canada resumes WTO threat over beef

By Kim Tae-gyu

Canada is threatening to resume its complaint with the World Trade Organization (WTO) should Korea fail to begin importing Canadian beef next year as previously agreed.

A source familiar with the issue said Wednesday that Canada is ready to return to a WTO dispute settlement panel because Korea’s National Assembly may not approve imports of Canadian beef due to a partisan standoff.

Korea promised to lift its eight-year ban on Canadian beef imports in June, which started due to mad-cow disease outbreaks there in 2003. In return, Canada dropped its complaint with the WTO.

``Korea pledged to import Canadian beef products from cattle aged less than 30 months, which are regarded as safe, from next year. But the country might not comply with the promise due to parliamentary wrangling,’’ the source said.

``In this climate, Canada has reiterated its willingness via various diplomatic channels to resume WTO procedures unless the Assembly keeps the Dec. 31 deadline.’’

The source expressed concern that Asia’s fourth-largest economy might suffer a host of problems.

``We might have to import beef from cattle older than 30 months or materials we agreed not to import regardless of age. And we have to remember that the European Union is keeping an eye on the Canadian case as a benchmark,’’ he said. Under the Korea-Canada contract, brains, eyes, spinal cord and other specified risk materials (SRM) are not supposed to be traded between the two nations irrespective of the age of cattle because they are believed to be more susceptible to carrying the disease.

``The hitch is that lawmakers worry too much about public sentiment since the mad cow row in 2008 involving U.S. beef imports. In addition, the ongoing partisan bickering is aggravating the issue.’’

The Lee Myung-bak administration agreed with the United States back in 2008 to restart imports of U.S. beef, which generated a nationwide uproar including months of candlelit protests because of worries about mad cow disease.

This prompted many lawmakers not to proactively deal with the Canadian beef issue.

On a far more negative note, the governing Grand National Party unilaterally passed the controversial free trade agreement with the U.S. last month, prompting opposition parties to boycott any other parliamentary discussions.

When contacted, the Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) admitted that it is concerned about the possibility that the Assembly may fail to keep the deadline.

Yet, the ministry refused to confirm whether the Canadian government officially threatened to return to WTO action.                       

http://www.koreatimes.co.kr/www/news/biz/2011/12/123_101326.html

The Changing Relationship of Canadian Business and Foreign Investors

Corporate Counsel | December 20, 2011

When the Australian mining and natural resources giant BHP Billiton Limited bid $40 billion to buy Canada's Potash Corporation of Saskatchewan Inc. in 2010, the Canadian government was quick to slam the door in its face, proclaiming that the merger would not be of "net benefit to Canada."

The decision floored legal experts. In trashing Billiton's hostile takeover on "net benefit" grounds, the government relied on the language of the 1985 Investment Canada Act (ICA). The act had been used only once before to block a deal, in 2008—and that one had potential national security implications.

Coupled with the earlier veto, the Billiton rejection seemed to transform a law once regarded as little more than a formality into a potential booby trap. It also stirred controversy about whether Canada was creeping into a protectionist cocoon—which the government vigorously denies.

Then something remarkable happened. Lazarus-like, Billiton came back two months later, announcing that a plan to develop the world's largest potash mine in the very same area had reached an advanced stage in the company's approval process. The difference was that no acquisition of a company was involved. Billiton was using land it had already acquired. And this time the same provincial leader who led the charge against the buyout scheme was trumpeting the benefits of the project.

The ripple effects of these contradictory official responses to the two projects are still being mulled by legal experts. They highlight an unexpected wrinkle for foreigners who want to invest in Canada. From now on, apparently, they will have to pay as much attention to politics and community relations as to the law, if they want to keep their deals on track. Especially when the federal and state governments they must deal with are in the throes of election campaigns.

"Ultimately, it is a political decision, and it doesn't hurt to have good political relationships," observes Peter Glossop, a partner in Osler, Hoskin & Harcourt's Toronto office, who, like the other lawyers quoted in this article, is knowledgeable about Canadian M&A but wasn't involved in the Billiton matter. (Billiton wouldn't comment.)

George Addy, a partner with Davies Ward Phillips & Vineberg in Toronto, believes in doing your homework. "You have to plan, and plan early," he says. "And you have to have feet on the ground—people in Canada who know the complexities of the various stakeholder interests."

As companies from all over the world—including China—rush to discover and exploit Canada's vast mineral, oil, and natural gas reserves, the question of "net benefit"—and whether it will kill a deal—is keeping many lawyers busy.

U.S. investors are in the front line of those who could be affected. In 2010 U.S. direct investment in Canada totaled more than $306 billion, or 55 percent of Canada's foreign direct investment, according to Canadian government figures. (U.S. statistics show that Canadians directly invested $206 billion in the United States in the same year.)

At the heart of the uncertainty is the fact that "net benefit" ultimately comes down to what many lawyers say is a subjective—and often political—decision by a single individual, the minister of industry, or, in some cases, the minister of Canadian heritage.

This is true even though the law lists the factors the ministers must take into account in reaching a decision on an acquisition. These include considerations ranging from the deal's impact on Canada's economic activity and competitiveness on world markets to the number of Canadians in senior management. By law, the review must be completed within 45 days, though the minister may take an additional 30 days.

http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1324214245310

Foreign investors cut back on Canadian securities

Financial PostDecember | 17, 2011
Foreign investors eased up on purchases of Canadian securities in October, adding just $2.03 billion to their holdings after buying $7.35 billion the previous month, Statistics Canada said.
Economists had expected foreign purchases of between $7.25 billion and $8 billion in October. The October acquisitions - which showed weaker demand for treasury bills and equities - were also much lower than an average of $9.2 billion over the previous three months.
Non-residents added $1.22 billion worth of Canadian bonds to their portfolios in October, led by the first investment in federal bonds in five months.
"This investment was partially offset by retirements of Canadian private corporate bonds and provincial bonds, mostly foreigncurrency denominated instruments," the agency said.

http://www.timescolonist.com/business/Foreign+investors+back+Canadian+securities/5876723/story.html

GM to invest $68M at Oshawa plant for new Impala

CBC News
General Motors confirmed on Friday that it will build some of the next generation of its Chevy Impala line of cars at its assembly plant in Oshawa, Ont.

The plant will get $68 million in investment and will secure 350 jobs, Canadian Finance Minister Jim Flaherty said at the announcement, though overall GM is slashing positions in Oshawa as it shuts down an assembly line.

"These are important developments for the future of this community. They are important developments for this country," Flaherty said. "This important announcement marks an important step in GM's recovery and its continued contribution to Canada economic growth and jobs."

The news from GM caps off half a year of machinations with its union, the Canadian Auto Workers.

The union says its collective agreement with GM obliges the auto maker to produce Impalas in Oshawa, where it has assembled different versions of the model since 1959.

But the auto maker announced in May that it was adding 2,500 jobs and investing $69 million US to upgrade its Detroit-Hamtramck plant to build the latest Impala, without any mention of the Ontario factory. That prompted a flood of media reports that production of the sedan was moving out of Oshawa.

The CAW said the tactic was meant to instill fear in workers ahead of next year's negotiations toward a new collective agreement.

Instead, GM will "double-tool" the car at both plants.
Massive job losses

Overall, GM's Oshawa operation is still set to lose more than 2,000 jobs as the company eliminates its so-called consolidated production line by 2013. That's on top of the 2,600 jobs lost in 2009 when GM shuttered its truck plant in Oshawa, and the closure last year of its lone remaining production plant in Windsor, Ont., where the company once employed 7,000.

GM had a Canadian workforce of 20,000 people as recently as 2005, but that number is dwindling to fewer than 5,000 as it tries to streamline operations in the wake of its bankruptcy filing two years ago.

The company received $61.5 billion in bailout money from the U.S., Canadian and Ontario governments in 2009 as it went through bankruptcy protection, with politicians saying it was important to protect manufacturing jobs.

"I'm pleased that the when GM's future was on the line and the jobs here were on the line, that the people of Canada stepped up to the plate," Flaherty said Friday.

Most of that amount was converted to equity before General Motors relisted on the New York and Toronto stock exchanges last year. But at the shares' current price, Ottawa and Queen's Park are out $4.2 billion on their investment and would need the stock to rise to about 2½ times its current value to break even.
http://www.cbc.ca/news/canada/story/2011/12/16/biz-gm-oshawa.html

Russia's WTO membership important to Canada: minister

Source: XINHUA | 2011-12-16 | ONLINE EDITION  

OTTAWA, Dec. 16 (Xinhua) -- Closer ties with Russia will bring more jobs and economic benefits to Canada, said Canadian International Trade Minister Ed Fast on Friday.

Fast made the remarks when he congratulated Russia on its successful accession of the World Trade Organization (WTO) after Moscow's membership was granted in Geneva on the same day.

"As a fast-growing economy, Russia offers great potentials. Its membership in the WTO will mean lower tariffs and improved access to Russia's goods market," said Fast in a statement.

He noted that Canadian companies are excited about their opportunities in Russia, especially as Moscow continues carrying out measures to better its trade and investment environment.

Taking the 2014 Sochi Winter Games as an example of the two countries' bilateral ties, the minister said architects and engineers from both nations are working side by side on the Olympic-related projects.

Currently, bilateral trade reached 2.8 billion Canadian dollars, or 2.7 billion U.S. dollars, in 2010, 12.3 percent up from a year earlier.

Russia is a major market for Canadian machinery, seafood products and aerospace products, and an exporter of fertilizers and chemical and steel products to Canada.

http://www.shanghaidaily.com/article/article_xinhua.asp?id=39628

Uranium mine ownership rules may ease

CBC News
Posted: Dec 14, 2011 10:02 PM CST
Last Updated: Dec 14, 2011 9:59 PM CST

A Saskatchewan MP, Brad Trost, has introduced federal legislation that would allow for more foreign investment in Canadian uranium mines.

Trost's bill would allow foreign investors to purchase and own the entirety of Canadian uranium mines and properties. Current rules limit foreign interest to a maximum of 49 per cent.

"This is a policy that has been supported by not just the current government of Saskatchewan but previous NDP and Conservative governments in Saskatchewan," Trost said Wednesday. "It would increase jobs and investment in our province and throughout the country."

Saskatchewan's north is home to most uranium mining activity in the country.

Trost said a change in ownership rules would not lead to any security risks because uranium is a highly regulated commodity requiring licenses to mine and export.

Saskatchewan recently said it would welcome eased ownership rules.

Last week the province's energy and resources minister, Bill Boyd, noted the federal rules date to the 1950s.

"We think it has had an impact on investment," Boyd said. "If there were a change, we think we would see further investment in Saskatchewan, we believe that that would be a good thing."

http://www.cbc.ca/news/canada/saskatchewan/story/2011/12/14/sk-uranium-mine-ownership.html

Ottawa makes deal with United States Steel

Jeff Gray — LAW REPORTER From Tuesday's Globe and Mail
Published Monday, Dec. 12, 2011 3:18PM EST
Last updated Monday, Dec. 12, 2011 7:22PM EST

The federal government has dropped its legal case against United States Steel Corp. for breaking promises to maintain jobs after its 2007 takeover of Hamilton’s Stelco. In exchange, the company pledged to keep producing steel in Canada until 2015 and invest an additional $50-million.

The deal snuffs out a high-stakes court fight between the federal government and the Pittsburgh-based company. But lawyers who advise foreign investors say it sends a signal that Ottawa is serious about enforcing promises made to secure government approval of foreign takeovers.

However, the union representing workers at the two former Stelco mills called the deal a betrayal by the Conservative government.

Industry Minister Christian Paradis announced the agreement in the House of Commons on Monday, saying it was made after the company had approached him and after “extensive negotiations.”

Under the deal, he said, U.S. Steel pledged to keep producing steel in Canada, operate its Lake Erie and Hamilton plants until 2015 and invest at least $50-million in its Canadian facilities by December, 2015, in addition to its original pledge of $200-million by October of next year. The company also pledged to give $3-million to “community and educational programs” in Hamilton and Nanticoke, Ont.

“U.S. Steel’s new commitments, many of which run to 2015, will provide benefits that in all likelihood would not have been obtained through the court process,” Mr. Paradis said.

The deal comes after U.S. Steel lost its legal argument in May that the potential $10,000-a-day fines it was facing under the Investment Canada Act were unconstitutional. On Nov. 24, the Supreme Court of Canada announced that it would not hear the company’s appeal of that decision.

U.S. Steel spokeswoman Erin DiPetro said the company was pleased to resolve the “unfortunate dispute” and said the deal “reflects our ongoing and long-term interest in doing business” in Canada. “We intend to be valued corporate citizens in Canada,” Ms. DiPetro said in an e-mailed statement.

U.S. Steel took over struggling Stelco in 2007, making promises to Ottawa to maintain jobs and steel production at certain levels. But in the face of a worldwide economic crisis two years later, it announced that it was closing both plants, laying off more than 1,500 workers. (The plants later reopened, although they were plagued by labour disputes that ended with lockouts and deep pension concessions.)

In July, 2009, Tony Clement, then industry minister, said Ottawa would take U.S. Steel to court for violating its pledges. But the company argued that it should not have to live up to promises it made before the financial meltdown.

Union leaders had harsh words for the deal announced on Monday. “It’s outrageous that they can be left off the hook like that after causing all the damage they have to the Hamilton economy,” said Rolf Gerstenberger, president of Local 1005 of the United Steelworkers, which represents about 750 workers left in Hamilton and 9,000 retirees.

Lawyers on Bay Street who specialize in the Investment Canada Act disagreed, arguing that the deal actually underlines Ottawa’s resolve to force foreign investors to live up to their commitments.

“This appears to be more than a slap on the wrist,” said Chris Hersh of Cassels Brock & Blackwell LLP in Toronto.

Mark Katz of Davies Ward Phillips & Vineberg LLP said the deal was by no means a surrender from Ottawa: “This is definitely not a backing down by the government. … The message they are sending is that [foreign investors] had better take this seriously.”

With a report from Greg Keenan.
http://www.theglobeandmail.com/report-on-business/ottawa-makes-deal-with-united-states-steel/article2268301/

Obama Agrees to Perimeter Security With Canada to Bolster Trade

By Theophilos Argitis and Andrew Mayeda

Dec. 12 (Bloomberg) -- President Barack Obama and Canadian Prime Minister Stephen Harper agreed to take steps to speed the flow of goods and people across the border while enhancing security and harmonizing regulation, in a bid to counter weakening trade ties between the two countries.

The pact, announced by Obama and Harper following a meeting in Washington, moves the two countries toward a “perimeter” security system that lays out plans to inspect more cargo and travelers before they arrive in North America. Canada and the U.S. will also seek to streamline and align regulations on some goods.

“Moving security to the perimeter of our continent will transform our border and create jobs and growth in Canada by improving the flow of goods and people between our two countries,” Harper said in a statement. “These agreements represent the most significant step forward in Canada-U.S. cooperation since the North American Free Trade Agreement.”

The Canada-U.S. trade relationship has struggled under the impact of tighter border security following the Sept. 11 terrorist attacks, as well as the emergence of China as a competitor and slowing global growth. The share of Canada’s shipments to the U.S. has been declining since 2000, a trend that accelerated as the global recession curbed demand for Canadian exports.

The two countries agreed on 29 initiatives to harmonize regulation as a “first step” toward new regulatory cooperation, focused on agriculture and food, transportation, health products and the environment.

Autos and Rails

Auto producers and rail companies will benefit from efforts to harmonize vehicle safety standards, the Canadian government said in a background document released in Ottawa. Other steps will include developing a common naming system for meat cuts, aligning regulations for pesticides and harmonizing rules in the pharmaceuticals industry.

“This announcement is not about a common border, it is about an integrated economy and our shared vision for good jobs, increased investment and a higher standard of living,” Jayson Myers, chief executive of the Canadian Manufacturers and Exporters, said in a statement.

Border regulations cost Canadian businesses about C$16 billion ($15.8 billion) annually, the Canadian government said.

The accord comes after Obama announced last month he would delay until 2013 a decision on the $7 billion, 1,661-mile (2,673-kilometer) Keystone XL pipeline, proposed by TransCanada Corp. Approval of the pipeline, which would carry Canadian oil- sands crude through the Great Plains to the Gulf of Mexico, is a “no-brainer,” Harper said in a Sept. 21 interview with Bloomberg.

Canada Irked

The Keystone delay is the latest of several U.S. moves that have irked Canada. Canada objected to “Buy American” provisions in the Obama administration’s $447 billion jobs bill that was blocked by Republicans in Congress, as well as the restoration of a $5.50 fee on Canadian travelers arriving in the U.S. by plane or ship.

The two countries have agreed to coordinate their systems for screening cargo so goods entering either nation only have to be cleared once. They plan to integrate passenger baggage screening systems, meaning Canada will have to adopt the U.S. system for detecting explosives. In exchange, U.S. authorities will lift the requirement that baggage be re-screened when travelers switch to connecting flights in the U.S.

Expanding NEXUS

They also agreed to expand a program called NEXUS that allows frequent travelers to pass more quickly through customs. Canada will expand NEXUS lanes and booths at several border crossings, including Windsor, Ontario-Detroit. There will be “significant” investments in physical infrastructure at various border points, the documents say.

Canada and the U.S. will develop coordinated entry-and-exit systems, so the record of land entry by individuals into one country can be used to track the exit from another. Canada will adopt the U.S. exit system, under which airlines must share their passenger manifests on outbound international flights.

Canada will also beef up practices to identify potential terrorist threats before they reach North America, in part by increasing screening of travelers to Canada, and sharing information on high risk inbound travelers.

http://www.businessweek.com/news/2011-12-12/obama-agrees-to-perimeter-security-with-canada-to-bolster-trade.html