Hodgson won’t rule out Chinese state-owned companies from buying majority stakes in Canadian oil patch

Energy and Natural Resources Minister Tim Hodgson wouldn’t rule out allowing Chinese state-owned companies from buying majority stakes in Canada’s oil patch, when asked directly whether that would be a red line for the federal government.

“We will look at every investment from every country against the Investment Canada Act, and we will accept investments that are a net benefit to Canada,” Hodgson said in an interview on CTV Power Play with Vassy Kapelos airing Wednesday, when pressed on the shift from Prime Minister Mark Carney’s assertion last spring that China was the biggest security threat facing Canada.

In late 2012, the then-Conservative government approved the takeover of Nexxen Inc. by the Chinese state-owned company CNOOC, stipulating that thereafter there would be a ban on state-owned companies taking over companies in the oilsands, unless there were exceptional circumstances.

Canada’s Investment Canada Act, passed in 1985 and amended in 2022, expanded on that position, giving the federal government the power to conduct a national security review of all foreign investments in Canada. The amendments in 2022 dictated foreign ownership would be approved only in exceptional circumstances.

After years of acrimony between the two countries, Carney recently became the first Canadian prime minister to travel to China in eight years, framing the trip as necessary to diversify trade amid rising uncertainty with the United States.

During Carney’s trip, he signed a memorandum of understanding (MOU) with Chinese President Xi Jinping that would see Canada ramp up the amount of oil, natural gas and clean energy it exports to China, and reduce barriers to Chinese investment in those sectors.