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Posted Dec 5, 2014, 11:39 PM
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Join Date: Apr 2008
Location: Lower Mount Royal, Calgary
Posts: 5,147
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Power shifting to Calgary. Though they under counted how many head offices we have.
Quote:
‘Toronto has less influence now': How Canadian corporate power is making a big shift westward
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Theresa Tedesco | December 3, 2014 7:08 PM ET
More from Theresa Tedesco | @tedescott
The Bow, Calgary's tallest building. The University of Moncton found that as many corporations either set up shop in or relocate to Alberta, many of the people who decide corporate strategy, such as layoffs, mergers and acquisitions, and how companies invest money, are now increasingly in Calgary.
Keith Morison for National PostThe Bow, Calgary's tallest building. The University of Moncton found that as many corporations either set up shop in or relocate to Alberta, many of the people who decide corporate strategy, such as layoffs, mergers and acquisitions, and how companies invest money, are now increasingly in Calgary.
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As economic power in Canada continues to shift westward, so too, apparently, are the seats of corporate influence.
Alberta — when compared against much larger Ontario — now has three times as many company headquarters per capita, according to research from the University of Moncton. But the western province now boasts significantly more than its fair share of board directors — the ultimate corporate decision-makers — than anywhere else in the country.
We see power shifting to the west, especially to Calgary. Toronto has less influence now
A study by a group of academics at the New Brunswick-based university shows that of the 234 corporate headquarters of companies listed on the S&P/TSX Composite Index that are based in Canada, 82 or 35% are located in Ontario, 79 or 33.9% are in Alberta, followed by Quebec and British Columbia which have 32 (13.7%) and 28 (12%) respectively.
At the same time, the western provincial powerhouse boasts the strongest representation of corporate directors from those same S&P/TSX companies, the research found. “No other Canadian province is over-represented when considering its demographic weight,” it concluded. Only Alberta is.
The other nine provinces are inadequately represented in terms of the number of head offices and their respective share of the total population.
For example, according to the findings, more companies are headquartered in Ontario than in Alberta, but because its population is nearly four times larger than its western counterpart, the long-time engine of Canada’s economy is considered underrepresented. Conversely, Alberta has three times more headquarters than its share of the population.
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“We see power shifting to the west, especially to Calgary. Toronto has less influence now,” said Sebastien Deschenes, a director and professor of accounting at the University of Moncton and one of three academics who conducted the research.
Without question, a tectonic shift in economic clout and influence from central Canada to western urban centres has been under way for almost two decades, fueled largely by a boom in commodities and surge in the oil and gas industries. At the same time, this transference has been abetted by a major restructuring in the traditional manufacturing sectors in Ontario and Quebec that has crippled their economies.
The vast majority of the 79 corporate headquarters in Alberta are located in Calgary – only five in other cities. Of those, 60 are associated with the oil and gas sector, although there are a handful of major publicly traded companies, including telecommunications giant Shaw Communications Inc., WestJet Airlines Ltd., agricultural giant Agrium Inc., international engineer and design firm Stantec Inc. and Canadian Pacific Railway Ltd. Meanwhile, Toronto remains home to the financial services sector and shares mining with Vancouver.
Ted Rhodes/Postmedia News
Ted Rhodes/Postmedia NewsPanoramic view from the upper floors of The Bow tower in Calgary.
More significantly, the University of Moncton findings suggest that as many corporations either set up shop in or relocate to Alberta, many of the people who decide corporate strategy, such as layoffs, mergers and acquisitions, and how companies invest money, are now increasingly sitting in executive suites and boardrooms in Calgary.
Of the 1,771 directors in the 234 S&P/TSX listed companies with Canadian headquarters, 37.2% (659 directors) are based in Ontario, 28.8% (510) in Alberta, 15.4% (273) in Quebec, 12.6% or 224 in British Columbia and only 5.8% for the other six provinces combined.
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Meanwhile, Ontario and British Columbia are almost equally weighted in terms of the number of head offices and directors based on their respective demographics.
While it appears that companies are steadily looking westward, they appear to be bypassing Manitoba and Saskatchewan. Those two provinces accounted for only seven of the total corporate head offices (or 3%) and only a paltry 2.9% of the total number of directors. According to the findings, only 24 firms of the 234 listed on S&P/TSX composite index with Canadian headquarters listed directors from one of these two provinces.
Conversely, the four Atlantic provinces, which have a long history of producing many of the country’s blue-chip directors, accounted for 42.2% of all board members (52 in total), despite having a fractionally higher total population than Manitoba and Saskatchewan. More significantly, directors from the Atlantic region are members of the boards of four of Canada’s six major banks — Royal Bank, Toronto Dominion, Bank of Nova Scotia and National Bank – as well as other major corporations. None come from Manitoba and Saskatchewan.
Prof. Deschenes cautioned that those provinces “should be very concerned by their limited representation in boardrooms” because the “absence of a voice could lead the enterprises to miss opportunities, including philanthropic contributions.” More importantly, he said, they risk losing out on having an important forum to “present their competitive advantages to corporate decision-makers.”
He noted TD Insurance’s decision to create a client service centre in Saint John, NB with 275 jobs as an example of how the city benefitted from having former New Brunswick premier Frank McKenna on TD’s board as deputy chairman to promote the city’s low cost, bilingual workforce. “In the absence of such links, companies might lose knowledge and the regional markets as well,” Prof. Deschenes explained.
While the study offers no assessment of the economic impact the western tilt is having, it does suggest that regional diversity in the boardroom can provide an important “counterbalance” to the tendency of head offices to narrowly focus on the regions in which they are located
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http://business.financialpost.com/2014/1...te-power-is-making-a-big-shift-westward/
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