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Canada's two main political parties are throwing their support behind Suncor Energy Inc.'s C$18.43 billion ($14.9 billion) purchase of Petro-Canada Ltd. -- an important factor in the deal given the target's history. Finance Minister Jim Flaherty, a member of the governing Conservative party, told the CTV television network on Tuesday that the deal is important for Canada and for the country's struggling oil patch. He said it is a good thing that regulators were reviewing the deal to ensure fair competition in the oil industry, but added: "We believe in investment as well in this country. We want to grow this economy." And Michael Ignatieff, the leader of the Liberal party, the largest Opposition party, told reporters in Ottawa he has decided to back the deal after being briefed by the chairmen of the two companies. "We want a Canadian champion in this industry," he said. "That is the justification for this merger." Political support is important for this deal because Petro-Canada was created by the federal Parliament in the mid-1970s as a Canadian vehicle to ensure Canada's oil resources were not snatched up by foreigners. In 1975, then-Prime Minister Pierre Trudeau's Liberal government created PetroCan by an act of Parliament, establishing a publicly owned company that boasted upstream and retail operations across the country. The company soon became a symbol of the converging views of economic nationalism in the country -- adored by the Left as a means of ensuring economic determination, but despised by the right as government encroaching into what should be the private sector. (The open space outside the corporate headquarters in Calgary was once known as Red Square). Conservative Prime Minister Brian Mulroney began to privatize the company in 1991, and the government sold its last stake in the company in 2004. The legislation authorizing the sale to private investors included a clause stating that no party can own more than 20% of the company. That was meant to ensure the company could not be subject to a foreign takeover and PetroCan would continue to be Canadian-owned. Suncor has got around the 20% rule by proposing an all-stock deal, essentially meaning that it will now be subject to the same legislated protections that buffered PetroCan for the past few decades. The merged company may ask the government to repeal that restriction. Between them, the Liberals and Conservatives control a majority of the seats in the Canadian Parliament, so the fact that both parties support the deal indicates it will not suffer from political interference. The leftist New Democratic Party has yet to make a statement on the deal, but it has limited power to make waves for the deal. - Peter Moreira
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