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Intervention in Nortel sale

There has been a lot of back and forth on whether the proposed sale of Nortel’s wireless business should be blocked by the Feds. The non-interventionists say that blocking the move would cast a pallor on future foreign direct investment in Canada. And they have a point. If I were a foreign investor looking for some assets to pick up, I would be very hesitant to look to Canada if there was a strong possibility of a deal being scuttled at the 11th hour.

On the other hand, much of the R&D carried out by Nortel was in part funded by the Canadian taxpayer through grants, tax credits and the like. Plus, it is important to keep higher paying, skilled  jobs in Canada wherever we can. And, from the sounds of the guy speaking for Ericsson, this is by no means for certain.

10% of the 25,000 jobs retained? Gee, thanks.

Industry Minister, Tony Clement, was his usual eloquent self

“I’m not ruling out intervening, and I’m not ruling out not intervening,” Clement told reporters today in Gatineau, Quebec. “In order to not pre-judge the issue, I have to keep my options open.”

Thanks for clarifying that Tony!

So will the Harperites move on this or not? I leave it to the TorStar writer James Travers to sum it up:

Run a moist finger down the list of Conservative priorities and find Conservative demographics. Twice trimming the GST, positioning punishment at the centre of criminal justice and spending big on the military are as popular with the party base as an aggressive green plan, a balanced foreign policy or best-and-brightest education and industrial strategies are not.

That’s understandable, familiar and fair enough. As Brian Mulroney memorably observed, “Ya gotta dance with those that brung ya.”

So it’s really no surprise the Prime Minister is rushing public billions to the rescue of the multinational auto giants while making it easy for foreigners to buy what’s left of Canadian icon Nortel.

Not just the dominant industry in Ontario, the province that decides federal elections, the auto sector also employs many thousands of those ordinary, hard-working, tax-paying folks Harper talks about so often.

On the other hand, Nortel’s payroll is largely offshore and those who do work here are not stereotypical Conservative voters.

Bye-bye Nortel…


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