Calgary is home base to the second most corporate headquarters in Canada, trailing only Toronto

Would an independent Alberta see corporate head offices leave Wild Rose Country?

It’s one of many provocative issues that a new report commissioned by the provincial government delves into — conducted by the University of Calgary’s School of Public Policy — as part of a broad examination of the economic and fiscal implications surrounding Alberta separation.

The report, released Wednesday, looks into an array of economic aspects of the debate in the run-up to the Oct. 19 referendum, but the discussion about head offices is particularly relevant for the city and the province.

After all, Calgary and Edmonton were home to 423 company headquarters, which provided jobs to more than 40,000 Albertans in 2024, including more than 29,000 in the Stampede City.

Calgary is home base to the second most corporate headquarters in Canada, trailing only Toronto. Large oilpatch firms such as Suncor Energy, Enbridge, TC Energy, Canadian Natural Resources and Cenovus Energy, along with transportation companies such as Canadian Pacific Kansas City and WestJet, are among the biggest employers.

“The prospect of separation might mean some firms move their head offices out of Alberta. This occurred in Quebec in the run-up to the 1980 referendum and was seen again during Catalonia’s attempt to leave Spain in 2017,” states one of the report’s technical papers.

“There is also the possibility a separate Alberta might see more head offices, depending on the policy choices it makes. Lower and simplified corporate taxes, reduced regulation and lower personal taxes might all contribute to greater attraction and retention of head offices.”

Much will depend on if the non-binding referendum question on separation — to hold a future binding vote — would lead to a ”smooth” transition and negotiations with the rest of Canada, or a more difficult one, according to the analysis.

The report examined two scenarios, with the smoother outlook based on the assumption Canada and other trading partners would adopt an accommodating stance and the breakup would move expeditiously.

The difficult scenario assumes the breakup process is long and “international investors are wary of the new country.”

“I think we would lose some head offices. I don’t know how many,” U of C economist Kent Fellows, a co-author of the report, said in an interview Thursday.

Fellows noted some companies relocated their corporate headquarters out of Quebec during and after the referendum debates of the late 1970s and mid-‘90s, because of the perceived risks tied to separation.

As the report pointed out, businesses with offices in Alberta are less likely to move because they would want to remain close to their assets and properties. Yet, for companies with most of their assets outside the province — such as railways or pipelines — “the question of staying or going is more complicated.”

“For pipelines, companies may wish to remain close to sources of supply of oil and gas,” the technical report states.

“However, it may become harder to recruit qualified labour if migration between Alberta and the (rest of Canada) becomes more difficult, and for those companies that have significant U.S. operations, they may look seriously at relocating south.”

Some companies may also want to remain close to the regulator, Fellows added.

The Canada Energy Regulator is based in the city.

“Head offices like to locate (to) where things are stable and where they have a lot of potential connections . . . They want easy ties to the firms that they work with, which is why they often co-locate,” Fellows said.

“But if we separate, then it’s potentially harder to move people in and out of the head office because now you’ve got to go across an international border.”

In June, a Calgary Chamber of Commerce survey of its members found 48 per cent of respondents said they’re very or somewhat likely to leave Alberta and relocate their business if the vote to start a binding separation process passes.

Chamber CEO Deborah Yedlin pointed out that smaller countries with many corporate head offices, such as Norway and Switzerland, have existing treaties and trade deals in place with other countries, something an independent Alberta would initially lack.

“Why would you confine yourself to such a small market without any assurances of trading arrangements with the rest of Canada and other markets outside Canada,” she said Thursday.

However, Alberta lawyer Keith Wilson, who is the co-leader of registered third-party advertiser Let Alberta Decide, said the report is overly pessimistic on the economic front.

He noted the province has low corporate taxes, more affordable housing than many Canadian cities and offers other benefits for businesses to stay in Alberta.

“The resources are here. The feedstock is here, the massive infrastructure many companies have spent, billions of dollars in building, is here,” said Wilson, who also co-leads the Alberta Transition Council.

“I don’t see any economic justification, any economic advantage that a head office would get from leaving.”

Business Council of Alberta president Adam Legge noted some of the Quebec companies that left the province weren’t tied to the province in a physical way — unlike energy firms that are close to natural resources.

“For those that wouldn’t be tied to a specific asset or resource base, they could very well look elsewhere, knowing that the areas of uncertainty — higher borrowing costs, difficulty with labour attraction or retention, trade agreements — it just might not be worth it,” Legge said.

“I think it’s a guarantee that some head offices would leave.”

Chris Varcoe is a Calgary Herald columnist.

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