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Mergers and Sovereignty

A friend writes in to say:

Mergers and Stealth: Although these days there is little military threat to Canadian sovereignty, in a Toronto Star editorial Don Rogers writes that the country is losing its independence by stealth. "Bit by bit, at an average rate of six per day, Canadian companies are taken over by foreign, mostly American, ownership. Venerable, long-established icons of Canadian business have fallen. Names like Seagrams, MacMillan Bloedel, Laura Secord, Club Monaco, Westcoast Energy (parent of Union Gas), Massey-Harris, Trentway-Wagar and the Montreal Canadiens hockey club have lost their Canadian ownership or have disappeared outright. And now Molsons."

Is a country's independence determined by the ownership of its largest companies? Discuss.

So I'll bite. Actually, I wrote about this already, early last year. In short, I argued that we shouldn't worry so much about our big and old companies getting taken over so long as we keep producing and creating new ideas and new companies. Our start-ups of today can be sold off for big profits in the future.

But, editorialist Rogers does make a good point when he says:

Foreign ownership causes an exodus of better paying jobs, research, and management. Those lost jobs are replaced, if at all, by lower-paying, part-time, call centre and fast-food jobs.

In a way he's right. Branch plant operations -- or their equivalents in other industries -- simply don't produce the same sorts of interesting work that independent companies do. That is a problem, but if Rogers wants to recommend preventing foreign ownership across the board, then I don't think the problem is serious enough to justify his proposal, nor do I think his remedy would be as effective as he'd like. Instead, I think we need to be doing a much better job of preparing Canadians to create new work. And, no I don't mean tax cuts. On the contrary, I think we need to be investing much more in public support for education and communities. (Among other things.)



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