You can’t be sovereign if you don’t own anything

The day before the Canadian federal budget was introduced, a Canadian gold mining company called New Gold announced that it would be acquired by American-owned Coeur Mining. This comes only a couple months after the proposed acquisition of one of Canada’s largest miners, Teck Resources, by British-owned Anglo American.

But the federal budget goes to great pains to explain that that those days are over, as the “systems that long underpinned our prosperity… are being redrawn and constantly challenged” and calls, many times, for “generational investments.”

You know what’s easier than making a generational investment? Not selling the things you already have.

As governments turn protectionist around the world, if Canada stays “open for business,” there’s a significant risk of a repeat of 2006-2007, when foreign investors scooped up major Canadian companies like Inco, Falconbridge, Noranda, Stelco and ATI. The impact of the loss of head offices, research jobs and control over Canadian resources is still being felt today. Recently, the current American owner of Stelco, one of Hamilton, Ontario’s major employers, came out in favour of the American tariffs on steel that are harming his own Canadian employees, raising the ire of Ontario Premier Doug Ford.

While last Tuesday’s budget used the word “sovereign” 81 times, it did not define a clear strategy to build and maintain Canadian ownership of our assets. When combined with its focus on attracting private capital, there’s a real danger that the government will enable a sell-off of Canadian companies to foreign investors. It’s even possible that this sell-off would be considered a “win” for the strategy, as it could be characterized as an investment in Canada.

This would be a mistake.

There is a significant difference between investing in building and investing in buying. Building leads to new assets, like the Kitimat LNG terminal in B.C., funded in large part by foreign capital. Buying often leads to a loss of head office jobs, innovation capacity and sovereignty. With the government signaling a willingness to sell Canada’s airports and ports in this budget, bringing back memories of Ontario’s disastrous sale of Highway 407 to a Spanish company, it’s dangerous to proceed without clearly defining what kind of foreign investment we’d accept.

The mistake could easily be corrected. The budget sets out to “build, protect and empower Canada.” A Canadian ownership strategy fits cleanly in the “protect” column. It could define Canadian ownership more narrowly and ensure that programs like the Scientific Research and Experimental Development tax incentive do not benefit foreign-owned companies. It could reject the proposed acquisitions of Canadian mining companies, making it clear Canadian ownership is a priority. It could prioritize ownership structures that enhance sovereignty, like employee and community ownership. And it could tie all these together with other pro-Canadian measures in the budget, like the Critical Minerals Sovereign Fund, into a strong and important narrative that Canadians would support.

When a Canadian company is sold, it can be decades before the impact is fully understood. At the time of its sale to AMD in 2006, Mississauga-based ATI shared the global market for graphics chips equally with U.S.-based Nvidia. Today, Nvidia is the leading global supplier of chips that power AI, employs 36,000 people and is worth $5 trillion USD. AMD bought ATI for $5.4 billion USD and employs fewer Canadians today than in 2006, despite promising to keep a major research centre in Canada.

If we really want to build a Canada that is “confident, secure and resilient,” we can’t afford to repeat the mistakes of the past.

Sovereignty requires ownership. It’s clear that China and Trump’s America understand that. It’s time for the Canadian government to prove that Canada understands it too.