My take is the Canadian government provided the grants and tax incentives to encourage and support of Nortel’s business, which, in turn, would create benefits such as employment and more jobs in Canada. There was never any consideration about getting an “equity stake” in Nortel in exchange so it’s off the mark to suggest the Canadian government has any claim to Nortel’s assets.

Mark

Does Nortel (and its owners) own the companies assets or does the government seize possession by virtue of having ever provided an incentive? Do you own your home or does the government now get a piece because of a home renovation tax incentive?

The xenophobic views on foreign ownership (nationalizing assets if acquired by a foreign company) are outdated. Modern societies encourage foreign investment. Canada’s own industrial policy and numerous treaties ensures that we don’t discriminate in the manner you propose; we provide tax credits for R&D performed in Canada by Canadian firms and those that are foreign owned. Why wouldn’t we?

Ontario recently gave more than a quarter of a billion dollars to recruit a foreign gaming software company. Ericsson didn’t ask for cash handouts and it is maintaining skilled jobs in Canada. The Canadian taxpayer will benefit from payroll taxes being remitted to both levels of government, property taxes, and all sorts of economic benefits from having stability for these employees.

There was no “pilfering” of any public or private assets – the sale conformed to the law with judicial oversight. Political interference would have sent a message to the investment community around the world that we are no better than banana republics that change the rules and nationalize assets on a whim. Just imagine the impact that would have on jobs, investment, the dollar, stock prices.

The government got it right by looking at the big picture and resisting the temptation to score short term, cheap political points.