On my only visit to Canada's premier ski resort, Whistler Blackcomb, currently the target of a

$1.4-billion takeover by a U.S. company, you needed a change of clothing from the chilly top to
the balmy bottom.
As we saw during the 2010 Olympics, frosty weather and natural snow are no longer guaranteed
at the side-by-side B.C. mountains. In fact, climate change may make the purchase of Whistler
by Colorado-based Vail Resorts a shrinking asset despite a $345-million dollar plan to
weatherproof the resort.

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Nonetheless, foreign direct investors can't seem to resist buying a piece of Canada, in this case
perhaps because the resort is within easy striking distance of booming Vancouver and is a
wilderness attraction for overseas visitors.

Stashing cash
In the Vancouver area, when people think foreign ownership, they think houses, as offshore
buyers with deep pockets look for somewhere safe to stash their cash.

The late CEO of Vale (pronounced Vah-lay), Roger Agnelli, left, exchanged national sports team
jerseys with Inco CEO Scott Hand in 2006 as the Brazilian company announced its takeover of
the Canadian nickel giant. (Reuters)

But the same thing applies in the corporate world, only more so, according to economist
Armine Yalnizyan of the Canadian Centre for Policy Alternatives. Because traditional economic
growth is weak, she says, companies are growing by buying.
"What comes to top of mind is this process of corporate consolidation in the wake of the 2008
crisis where there is no demand growth, so the way you grow your profits is by eating other
smaller, profitable companies," Yalnizyan says.
Of course, she says, its a two-way market, with Canadian banks and pension funds scooping up
foreign assets as well.

Fire sale
"With the Canadian dollar at 76 cents against the U.S. dollar, give or take, we're on a fire sale, so
why wouldn't foreign companies buy up hot properties that are very profitable?" Yalnizyan notes.
Over Canada's longer history, a shortage of domestic investment capital has meant that the
country has traditionally seen a net inflow of money from more established economies such as
Britain and the United States. That continues to show up in Statistics Canada data where
foreigners own more of Canada than Canada owns abroad.

7 foreign takeovers that shook up Canadian business

But that disguises a more recent trend where in many years, Canada has invested more
abroad than has flowed into the country. Of course, the trend is periodically shattered, as when
Brazilian mining giant Vale (pronounced Vah-lay) bought the Canadian mining company Inco in
2006. A similar surge came in 2007 when Rio Tinto won a bidding war for Alcan and again in
2013 when China's CNOOC gobbled up oil and gas producer Nexen.

In 2009, workers in Sudbury, Ont., at Vale Inco's Copper Cliff smelter participated in what
became the longest strike in the company's history. Similarly, Canadian companies operating
abroad can't boast of a great reputation on labour issues. (Reuters)

All of those resource deals, condemned at the time, turned out to be fabulous for many Canadian
shareholders who sold high, unloading their stake shortly before the commodity crash, says

CIBC chief economist Avery Shenfeld. Selling mature companies is not the problem, he says,
rather it's selling undeveloped companies too soon.
"The issue for governments is really to make sure that Canadian companies don't face
impediments to building themselves and going international," Shenfeld says.

Small is dangerous
Shenfeld's comments echo those of his boss, CIBC CEO Victor Dodig. According to Dodig, the
takeovers most dangerous to the Canadian economy hardly show up in the statistics because they
are so small.
"Far too many Canadian high tech startups get bought out before they have a chance to grow,"
Dodig said in a November speech.
"When small and mid-sized startups are sold early, our country is weaker for it," the CIBC boss
said. "We are much better off with entrepreneurs who see the merit of investing for scale and for
reinvesting their wealth."

Mel Hurtig, who died last week, founded the Council of Canadians to help protect Canadian
sovereignty from U.S. corporate takeovers, but the group's views have changed. (CBC)

Last word on foreign takeovers goes to the Council of Canadians, the organization founded by
recently deceased Mel Hurtig that was famously vocal for decrying the loss of Canadian
sovereignty due to U.S. corporate takeovers.
The council's current chair, Maude Barlow, says that in a globalized world where international
capital flows every which way, the group has moved past that view. It doesn't really matter who
owns your ski resort.

Canadian predators
Canadian companies with huge investments abroad, especially in resource extraction, are not
very good corporate citizens and can have bad records on the environment and human
rights, Barlow says.
"Some of our companies are predators out there," she says.
Also, she says, the changing nature of business ethics means there is little to choose from
between Canadian companies and foreign investors.
The exception is that under trade rules, Canadian companies have to follow Canadian laws. But
under many foreign investment agreements, offshore companies can sue the government if new
or newly changed laws cut into their profits.
"I'm not suggesting that foreign control isn't important. It is," Barlow says. "But I think that the
world has changed."