The Potash Corporation of Saskatchewan's Cory Potash mine is seen in Saskatoon, in this July 19, 2007 file photo. PCS says increased demand for its products in the first quarter signals a longer-term rebound for the company, as farmers catch up on fertili
REGINA — The Saskatchewan government is ramping up its effort to convince Ottawa to block BHP Billiton's US$38.6-billion bid to acquire PotashCorp (TSX:POT).
Premier Brad Wall said Monday that the federal government should pay close attention to the words of former BHP Billiton chairman Don Argus, who warned of too much foreign control of resources in his home country of Australia.
Wall pointed to a 2008 article by the Hellenic Shipping News, in which Argus was quoted as saying: “If we fail to remain competitive, Australia will incur a substantial opportunity cost and, in the worst-case scenario, our resources will fall into overseas hands and we will become a branch office - just like Canada.”
In a May 2009 edition of the Melbourne Herald Sun, Argus was quoted as saying that “Canada had forfeited its resources sector, much to detriment of the country.”
Wall said in a news release that he takes strong exception to BHP Billiton viewing Canada as a “branch office.”
“It's up to our federal government to ensure we retain Canadian control of our natural resources and that we don't become a 'branch office,' like BHP apparently sees us,” said Wall.
“Mr. Argus's words ... should give the federal government plenty of pause as it considers its response to the largest foreign takeover in Canadian history.”
The Saskatchewan government came out firmly against BHP's bid last Thursday, saying it does not provide a net benefit to the province or the country.
The premier said he believes Saskatchewan could lose between $3 billion and $6 billion in revenue from taxes and royalties if BHP's bid is successful. And he said Canada's strategic interests would be put at risk if it sold most of its potash industry - which accounts for about a third of the world's supply of the mineral used in fertilizer - to an international company.
Wall said it's a takeover attempt like no one has ever seen in Canada and would continue a trend that has already seen much of the country's steel and mining sectors swallowed up by powerful multinationals.
BHP has said it remains confident it can win over the province and get the deal approved by Ottawa.
BHP has made several promises to Saskatchewan, saying it would locate the headquarters of its global potash operations in the province, it would maintain employment levels and it would make sure the province's coffers aren't hurt by the takeover.
Wall has held up Saskatoon-based PotashCorp as a Saskatchewan stalwart. It was created by the provincial government in 1975 and privatized in 1989. However, last week Prime Minister Stephen Harper pointed out that only 49 per cent is owned by Canadian shareholders.
Saskatchewan does not have the power to kill the BHP deal. It can only put forward its position to Ottawa.
“We will be speaking with the federal government about our position in the days ahead and we expect them to follow our recommendation,” said Wall.