The spite continues

The Financial Post reports that slapping "special" taxes on companies who recognize that capitulating isn't in their interest may not be enough for the Cons. Instead to really put the screws to independent thought, they may use the Competition Bureau to try to force Domtar Inc. to sign on, under penalty of having a merger rejected:

Domtar Inc.'s refusal to sign the softwood lumber agreement with the United States may put at risk its $3.3-billion merger with Weyerhaeuser Co. because the transaction requires Ottawa's approval, sources said.

According to several people familiar with the matter, Domtar is the last major forestry company to hold out against the agreement signed by Ottawa and Washington on Tuesday. It's believed Ottawa is prepared use the Competition Bureau to stall Weyerhaeuser's bid for control of 55% of the paper products company unless Domtar changes its position.

Bob Klager, a spokesman for Mr. Emerson, said the idea Ottawa would use the Competition Bureau as a lever to win support for the softwood agreement is "pure speculation." A spokesman for Domtar declined to comment.

According to one source, Ottawa has set a deadline for companies to sign onto the softwood agreement of Sept. 19, when the agreement is expected to go to a vote in Parliament.

The Conservative government has shown its willingness to use hardball tactics to wrestle support for the deal from industry.

"There's always been this issue out there of how to incent companies to come on board -- a carrot or a stick," said Mr. Quinn. "[The government] has gone the route of the big stick."

Of course, it was once "pure speculation" that the Cons would twist industry arms to force them to accept a laughable deal under penalty of losing all support from their own government - yet by the end of summer the Cons had done just that. And even Klager himself doesn't deny the possibility of using the Competition Bureau to punish Domtar; he only suggests that it lies in the future rather than in any completed action.

Mind you, if the Cons do plainly influence the outcome of what's supposed to be an impartial Competition Bureau process, then there would seem to be a fairly strong bias argument from Domtar's perspective. (Which may indeed explain Klager's vagueness in leaving the threat hanging while admitting to nothing.) That, however, would leave the Cons merrily forcing Domtar into yet another of the litigation processes which they claim to want to avoid - that is, if Domtar continues to be the largest holdout against PMS' self-image of infallibility.

For Domtar now as for so many other companies before, it may well be true that preserving its non-capitulation rights through successful litigation isn't worth the cost of the wrath of the Cons. But once again, that would only reflect the Con government's determination to bully its own country around - and should offer plenty of reason for anybody else who might become a future target to remove that opportunity for once and for all.

(Edit: cleaned up wording.)