Originally Posted by
Transpacificflyer
You dismiss my position as a joke, yet you do not offer anything substantive to counter my statement. My view is derived from the people who have expertise in Canada's national security and having seen first hand the impact of the purchase of key Canadian industries by foreign entities. You have the ignorant view that national security only involves armaments: It goes far beyond this to issues such as strategic airlift support capability, opportunities for training and innovation and R&D. Fortunately, Canada still has people who place the national interest ahead of personal profit and who understand the dangers of relying on foreign suppliers. Perhaps self sufficiency and not sending our natural resources outside the country, and then purchasing back the higher value finished goods does not concern you, but it does for those Canadians who value our economic independence.
My position is not expressing support for the Quebec investment in Air Transat one way or the other. Whether Air Canada or another Canadian/Quebec based entity purchases Air Transat is a win for Canada and for Quebec. You make the false assumption that a financial subsidy from a provincial government is "worse" than if there isn't one. Perhaps you should have a discussion with the folks who specialize in the tax treatment of M&As. There are a number of methods used to obtain the value of a company that can deliver more benefit to a company than a direct financial investment from a government. Depreciation of assets, assumption of tax credits or business losses that can be applied against profits to reduce taxes payable are all important tools factored into a purchase. The classic example of this in Canada was back in the early 2000's with the reverse takeovers of Canada's R&D companies by companies from the Alberta oil patch. They purchased the companies for the tax losses and R&D credits and (legally) avoided paying taxes. Companies do not necessarily purchase assets for the assets.
You seem to have a very discernible dislike of Quebec and have allowed the prejudice to colour your comment. The fact of the matter is that ALL provincial governments act to protect industries they deem vital for their economy. Whether it be Alberta purchasing railway oil tanker capacity or Saskatchewan subsidizing R&D companies or Ontario pouring hundreds of millions of dollars into its distressed manufacturing sector, there is a calculated decision made to support jobs and long term tax revenues.
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I actually don't take it as a joke at all. My OP on the subject was mostly a joke. That was what I was referring to. And I don't have a position on the TS one way or the other either, I just thought it was ludicrous/ballsy for somebody that knows nothing about airlines to "outbid" AC by putting forth a bid with other people's money when in this case, the other people hadn't even agreed to lend them the money (or give, or subsidize, or whatever, doesn't matter for my point).
As to the rest of this nonsense. The only meaningful national security Canada has in on the ocean or electronically/on the internet. But we are utterly dependent on our allies, lets not kid ourselves. We woefully underspend on national defence, and where we do spend the investments don't look very wise (reference current CF replacement fiasco and ship building fiasco and helicopter recplacement fiasco etc). So that is one substantive counter (actually 2 or 3 but whatever). Another substantive counter is that it is simply impossible for a nation of Canada's size to not rely on foreign suppliers. Heck even the US can't pull it off (reference rare earths and where the various carbon bits of the 787 are made as two examples). Keeping the bozos at BBD has *nothing* to do with national security. If it did, a large group of walruses would be able to successfully invade Canada.
Finally, I have nothing against Qubec at all. Lovely province. I just think that regularly subsidizing business is not a way to build competitive business. You can put lipstick on the pig by calling it in the national interest, or glam it up however you like, but it doesn't produce competitive industry. It certainly hasn't in BBD's case. And just for reference, I no more approve of Alberta buying rail capacity to ship oil than I do of Quebec investing in BBD. I would also love to see BBD succeed as a Canadian company. But they do seem to pretty consistently f it up (except for the business jet division, which they are selling ... so they can take the money and subsidize all the other bits that don't???). Their rail car division is a mess, and their commercial aviation division is a mess. Billions of dollars invested generated a return of $1. Business geniuses they are not.