Canadian Takeovers of U.S. Corporations Bring Reprisals

In retaliation against Canada's National Energy Program (NEP), U.S. corporations and their supporters in the U.S. Congress are pushing legislation that would make Canadian takeovers of American companies more difficult.

The House Mines and Mining subcommittee July 16 unanimously approved a bill that would impose a nine month moratorium on the purchase of more than 5% of the voting stock in American energy resources corporations by Canadian interests.

A related bill was also passed at the subcommittee level on the same date that would require foreign investors in the U.S. to comply with Federal Reserve Board credit rules for U.S. companies, which prohibit an investor from borrowing more than 50% of the cost of the investment.

The actions are in response to the NEP, which was instituted by the Canadian government last October to "Canadianize" the nation's oil and gas sector through investment measures that give advantages to companies at least 50% Canadian-owned. Currently, Canada's oil industry is 70% foreign-owned, largely by U.S. firms.

Canadian ~ companies have begun to buy up U.S. oil and gas properties. The Canadian firm Dome Petroleum recently acquired Hudson's Bay Oil and Gas; the Canadian government-owned Petro-Canada bought up the U.S. oil firm Petrofina; and Canada's Seagram Co. Ltd. has attempted to buy Conoco, the ninth largest oil firm in the U.S.