The Golden Share

It feels like five years.

But it is only the start of “Week Five” since the Government of Alberta and Ontario issued their States of Emergency. So much has happened. So much hurt has occurred. And so much money has been printed.

Government support programs started with individuals, then households, then medium-sized business, then small business, and then anyone else that slipped through the cracks.

But don’t take your eye off the ball.  What happens next matters.

As we move into Week Five, the attention will turn to Canada’s large corporations, the major employers in the country, the owners/operators of our natural resources, and the stewards of our critical/sovereign infrastructure.

Airlines, ports, railways, grain terminals, energy producers, financial institutions, pipeline companies, pulp mills, and power generators/distributors will all need credit facilities, and the Government of Canada will be the lender out of necessity, and in our national interest.

But those loans may likely come with a Golden Share.

The golden share concept originated in 1975, accompanying the Petro-Canada Public Participation Act, that prevented foreign ownership above 20%, sheltered a critical Canadian asset from any unwanted takeovers, but left its stock depressed versus rivals because of the reduced chances of a takeover. Petro-Canada’s golden share was held by the Government of Canada and was absolved with the Suncor acquisition to create a globally competitive, Canadian-based integrated energy company.

In the weeks to come, as the federal government contemplates extending credit to our largest and most vital large companies, there is a high probability that the golden share re-emerges as part of the Canadian economic landscape, forever changing our ability to attract foreign capital, access international markets, and build global brands.

This is an important signpost on the road to recovery.

It is also an important signpost on nationalizing our industries.