Foreign Takeovers of Canadian-Owned Businesses Continue to Happen

question 3

Essay

Foreign takeovers of Canadian-owned businesses continue to happen. One of the biggest foreign takeovers in Canadian history a number of years ago, triggered a great concern among many Canadian observers that there is a "hollowing out" of corporate Canada. That takeover was by Rio Tinto, a mining company from Britain, that completed a $38-billion (U.S.) deal to buy the 105-year-old Canadian aluminum maker Alcan Inc. (headquartered in Montreal). The deal made Alcan a subsidiary of Rio Tinto - a global company headquartered in Britain (and Australia). Some critics have suggested that the loss of control of Alcan was very bad for Canada. Those opposed to these foreign takeovers argue that Canadian business is losing control and independence to foreign countries. Consequently, there has been concern that the Canadian government should try to curtail this foreign takeover trend before Canadian is transformed completely into a "branch plant economy".
What six major arguments can you make for the Canadian government to play the role of guardian of Canadian businesses (like Alcan) by preventing such foreign takeovers and also by offering subsidies to Canadian companies (like Alcan) in order to help them compete against foreign companies (like Rio Tinto)?

---

Definitions:

Détente

A period of improved relations between two countries that were previously in conflict or tension.

Soviet Union

A federal socialist state in Eastern Europe and Asia, existing from 1922 to 1991, and was a major player in global affairs.

Foreign Policy

A government's strategy in dealing with other nations, including diplomacy, military action, and other interactions.

1972 Summit

A significant series of meetings during the Cold War, particularly referring to the historic Summit Series ice hockey competition between Canada and the Soviet Union.