Debate: Would the Canadian Government block the sale of Research in Motion?

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An interesting debate has sparked up out of the Canadian government’s blocking BHP Biliton’s bid to buy Potash Corporation this past week.

Reuters asks the question “Would Canada block the sale of Research in Motion, if that ever came about?”

“I don’t think we can … try to defend RIM from foreign avarice. It wouldn’t be doing a favor to RIM nor to the country,” said Iain Grant from telecom consultancy SeaBoard Group.

While some now see the Canadian government as a major hurdle to such a scenario, others see the Nortel sell off as more precedent setting. “The Potash rejection was widely seen as a political decision rather than a turn toward protectionism” said Reuters writer Alastair Sharp, in the article. Research in Motion employs more than half of its 14,000 staff in Canada and paid $809 million in Canadian taxes in fiscal 2010.

Denzil Doyle: "We really need RIM’s head office to stay in Canada"

Denzil Doyle: "We really need RIM’s head office to stay in Canada"

Others have more concern that the BHP decision could be precedent setting. John Ivison, writing in the National Post says the block of the sale doesn’t mesh with the Conservative party’s stated agenda of improving productivity and innovation:

“But the government’s decision will cost Canada dearly.” He said. “The price will be paid not only in foregone investment, as potential investors, already bamboozled by our muddy “net benefit” test, give this country a body swerve. It will also be paid by Canadian companies trying to buy foreign competitors.”

In a July interview with Cantech Letter, Ottawa tech legend Denzil Doyle said a RIM takeover would be bad for Canada.

“Oh god, I hope doesn’t happen!” said Doyle, when asked about a rumoured Microsoft bif for the BlackBerry maker. “That would be the worst thing for the area. We really need RIM’s head office to stay in Canada – and all the others, so we can play the head office role that I discussed earlier. And yet you hear academics from time to time saying that a foreign takeover of RIM would be in the best interests of Canada.”