Local opposition in the west Canadian province of Saskatchen to the BHP Billiton bid is growing with premier Brad Wall supporting the levy of a provincial resource transfer tax on BHP Billiton worth Canadian $3 to 6 billion. He said that they have to get the right number to make sure that the revenue of Saskatchewan is protected.
The head of BHP Billiton's non ferrous division, Andrew Mackenzie said in response that having a single tax, on a single company, on a single deal is somewhat strange. He also said that the deal would be structured so that the province has no negative tax effect.
BHP Billiton's $39 billion takeover bid for Potash Corp is currently being reviewed under the Investment Canada Act. This act allows the government power to block any takeover which is not deemed to be a net benefit to the country.
While the Canadian Prime Minister Stephen Harper is keen on sending out the right signal for foreign investments in Canada he does not want to alienate the premier Brad Wall with a possible election in 2011. As they have seen the results of Newfoundland and Labrador Premier Danny Williams effectively stir up trouble in the 2008 elections, losing all three seats for the Torries in the province.