The federal government could have prevented the liquidation of Nortel Networks Corp. with a massive bailout, but instead Ottawa has decided that the best way to salvage something from the biggest corporate bust in Canadian history is to help fund a foreign breakup, The Globe and Mail reported. Through the Export Development Corp. (EDC), which normally helps Canadian exporters and investors expand their businesses abroad, the government will provide $300-million toward a credit facility for Nokia Siemens Networks' $650-million (U.S.) bid for Nortel's wireless assets.

Beleaguered oil and gas producer Canadian Superior Energy Inc. said Friday it will buy partner and sidecar company Challenger Energy Corp. in a paper deal valued at $77.8 million, including debt, the Calgary Herald reported. The acquisition would consolidate Canadian Superior's stake in a contentious gas field offshore Trinidad and Tobago in which Challenger holds a 25 per cent interest.

Fraser Papers Inc. and its subsidiaries have initiated a court-supervised restructuring under Canada’s Companies' Creditors Arrangement Act and will seek similar relief pursuant to Chapter 15 of the U.S. Bankruptcy Code, Dow Jones Newswires reported. Fraser Papers, Toronto, said PricewaterhouseCoopers Inc. was appointed by the Ontario Superior Court of Justice as Monitor to assist the company through its restructuring process.

Nortel Networks Corp. sought financial aid from the Canadian government to avoid filing for bankruptcy protection but was refused, Nortel President and Chief Executive Mike Zafirovski told a parliamentary committee Thursday. The telecommunications-equipment company filed for protection under the Companies Creditors Arrangement Act in Canada in January, Dow Jones reported. Testifying before the House of Commons Finance Committee, Zafirovski said he had private discussions with Finance Minister Jim Flaherty and Industry Minister Tony Clement.

Air Canada has bought itself some breathing room after hammering out tentative agreements on pension funding with its employees, but observers say it still may not be enough to keep the country's largest airline out of bankruptcy protection, the Toronto Star reported. The airline reached tentative deals with its five biggest unions this week that include a moratorium on pension payments for 21 months, with four of the five unions also agreeing to wage freezes over the same period. As well, the agreements call for Air Canada to raise $600 million in financing.

The Canadian Press reports that Canwest Global Communications newspapers' unions were asked discuss concessions as the company faces restructuring to cope with debt of C$3.9 billion. In a copy of a provided to the Canadian Press by the company, Canwest Newspaper Operations President and CEO Dennis Skulsky suggested a 5% wage cut for all Canwest newspaper employees would result in $C20 million in savings a year and could help the company avoid bankruptcy.

Beijing is diversifying its overseas investments and pressing U.S. officials for an "exit strategy" from the ultra-loose fiscal and monetary policies that China fears will eventually inflate away the value of its U.S. bond holdings and fell the dollar. But China's pragmatic policymakers also know there is no practical alternative to the dollar as the world's main reserve currency.

The Grand Caravans, 300s and Chargers could be rolling off the assembly lines at Chrysler Canada plants within three weeks as the company's parent pulls away from bankruptcy protection with a new partner following a two-month shutdown, the Toronto Star reported. Although Chrysler would not confirm dates, the Canadian Auto Workers union said yesterday that company officials have suggested privately they want to reopen the minivan plant in Windsor, a car operation in Brampton and an engine casting factory in Etobicoke by June 29.

Air Canada's five unions could acquire a 10-per-cent stake in the airline as management tries to repair its strained labour relations, avoid a strike and preserve cash to survive the recession, The Globe and Mail reported. Under a tentative deal signed late Monday, three of five unions agreed to accept shares in exchange for supporting the company's proposal to freeze wages and defer most contributions to the employee pension plan for 21 months.

Canadian doormaker Masonite International Inc said on Tuesday it had completed a financial restructuring allowing it to emerge from bankruptcy protection in both the United States and Canada, Reuters reported. The company had filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and the Companies' Creditors Arrangement Act (CCAA) in Canada, on March 16.