Struggling BlackBerry maker Research In Motion is important to both Canada and the world, Canadian Finance Minister Jim Flaherty said on Friday, but he refused to be drawn on whether the government would allow a foreign takeover of the company.
“If there were a proposal for RIM or part of RIM coming from outside Canada, then that's a matter that of course the minister of industry would review, should it fall under the terms of the Investment Canada Act. But I'm not going to speculate because there's, as far as I know, nothing being proposed right now,” Flaherty told reporters.
RIM is important to Canada and the world – Canadian Finance Minister Jim Flaherty
The Investment Canada Act requires government approval of any foreign takeover worth C$330 million ($324 million) or more, a level which almost certainly would include transactions involving RIM.
Flaherty was speaking on a conference call from Ireland the day after RIM shocked markets by announcing a delay in the critical launch of its next-generation BlackBerry smartphones as well as a steeper-than-expected loss and extensive job cuts.
Peter Misek, a Canadian analyst at Jefferies in New York, said RIM had indelibly harmed the Canadian tech sector by digging itself into the hole it is in.
“They were champions and now they've become pariahs,” Misek said, adding Canada's future has to be innovation and technology.
“In a generation or two Canada will be a resource-depleted, Third World country. If it doesn't fix its ability to foster global technology companies, it will be in a lot of trouble.“
Misek said, however, that he did not think Ottawa should buy RIM or get directly involved.
Prime Minister Stephen Harper told Reuters in February that he wanted RIM to grow as “a Canadian company”. He said takeovers of critical technology that the government has invested in, or hostile takeovers of key Canadian businesses, were not in Canada's interest.
Flaherty, asked what steps the government might be able to take to help RIM keep going, responded: “RIM is an important company not only in Canada but globally. I use BlackBerrys. I'm not going to speculate about what steps could be taken, because the steps to be taken are really steps for the company to take, to decide on its path forward in order to stabilize the company. So I will leave that to them.“
He added, however, without explanation: “That does not mean we do not speak, but they need to look at their own options and to choose their path.“
He also refused to be drawn on whether the United States had expressed any reservations about possible bids from outside North America, given the importance of RIM to communications security. The Pentagon is RIM's biggest customer.
Asked if Washington had made any representations about that to Canada, he said simply: “Not to me.”
Publish date: June 30, 2012 1:45 pm| Modified date: December 18, 2013 10:39 pm