Canadian Heritage Minister James Moore won’t say if the Conservative government would change the rules to allow for a foreign takeover of financially troubled Canwest Global Communications Corp.

Today in an interview with Georgia Straight reporter Matthew Burrows, Moore revealed that he has had “conversations” with Canwest “as they’ve updated me about the challenges that they’re facing”.

“We hope that they can go through it and do the restructuring that’s necessary so that they can, you know, sustain the kind of quality news service that people hope to have from Canwest,” Moore said.

Burrows then asked if the Conservative government would consider a legislative change to allow for a takeover by a foreign company, such as Rupert Murdoch’s News Corp.

“Ha ha”¦we’re not there yet, but that’s a good Georgia Straight conspiracy theory,” Moore replied.

Burrows then asked if the Asper family lost control of Canwest, would the government be open to a foreign-owned multinational corporation taking over the media giant.

“That’s a hypothetical on top of a hypothetical,” Moore said. “You’re asking a hypothetical about whether or not Canwest would be in that situation, and a hypothetical whether or not someone else would come into it.”

On February 19, the Globe and Mail reported that Canwest CEO Leonard Asper was “scrambling to secure a financial lifeline” before the end of February. The company has a $3.7-billion debt.

“CanWest's borrowing capacity was put on a tighter leash this month when a senior credit facility was cut back to $112-million from $300-million by Bank of Nova Scotia [BNS-T],” the Globe and Mail reported. “The new limit is about $20-million above what CanWest has already drawn.”

On February 24, Variety reported that Murdoch is on the prowl for more newspapers. The article mentioned the Los Angeles Times and New York Times as possible acquisitions, but did not mention Canwest, which owns 10 major-market daily papers in Canada as well as the Global TV network.

Foreign investors are not allowed to hold more than 20 percent of an operating company in the Canadian  communications sector, or 33 percent of a holding company.  

Under income-tax rules, businesses cannot claim advertising as a business expense  with foreign-owned broadcasters, but these expenses can be claimed if placed with Canadian broadcasters.

Businesses can also deduct the cost of advertising in newspapers that are 75 percent Canadian-owned.  

MATTHEW BURROWS'S INTERVIEW WITH JAMES MOORE:
Burrows: What goes through your mind with the current fiscal situation at Canwest?

Moore: Well, obviously, it’s troubling. I mean all broadcasters in the country, CBC and the private sector as well, are all facing real challenges. A drop in ad revenue in some cases of up to over 50 percent. So it’s real challenges. I’ve had conversations with Canwest as they’ve updated me about the challenges that they’re facing. We hope that they can go through it and do the restructuring that’s necessary so that they can, you know, sustain the kind of quality news service that people hope to have from Canwest.

Burrows: I would just like to clarify. So you say you have spoken to the Aspers about their financial situation?

Moore: Yeah, they’ve updated all the political parties in Ottawa. They’ve   of course gone around and let the public know. They’re publicly traded companies. People know their financial situation. And they’ve shared that information openly with the public. I don’t know anything the rest of the public doesn’t know in terms of their financial situation. And you know, it’s certainly a cause for concern, but there are a lot of people who are going through difficult economic times right now and Canwest is not excluded that.

Burrows: If they do become insolvent, the worst case scenario, and they are insolvent, then how open are you to a legislative change that would allow for a foreign takeover of the company, say from Rupert Murdoch, for example?

Moore: Ha ha. Well we’re not there yet, but that’s a good Georgia Straight conspiracy theory. But we’re not there.

Burrows: If the Aspers lose control, would you be open to opening up to a foreign multinational? The rules would need to be changed to make that happen.

Moore: That’s a hypothetical on top of a hypothetical. You’re asking a hypothetical about whether or not Canwest would be in that situation, and a hypothetical whether or not someone else would come into it.

Burrows: We’re ahead of the curve, James.

Moore: I know. I’ll leave the conspiracy theories to the Georgia Straight and I’ll just stick to what I know. That is, I know they’re undergoing difficult times and we just hope they make it through it as best as possible with as solid a news organization across the country as possible with a number of well, you know, the highest number of employees to taken care of.