CIBC president and chief executive Victor Dodig believes getting the Trans Mountain pipeline expansion done and back into private hands is crucial for Canada's energy industry.DARRYL DYCK/The Canadian Press
Encana Corp.'s plan to designate the U.S. its legal home will see the Canadian oil and gas company relocate to Delaware, but only on paper.
The company will list Denver as its primary place of business, Encana communications director Cindy Hassler said Friday, and will retain its other offices in Calgary and in Woodlands, Tex., a suburb of Houston.
Ms. Hassler reiterated Friday the move will result in no job losses, with executives and employees to remain in their home offices.
“No one will be moving and no jobs will be moving. Everyone remains in place where they are today,” she told The Globe and Mail in an e-mail.
Thursday’s news that Encana will redomicile to the U.S. didn’t shock Victor Dodig, president and chief executive of the Canadian Imperial Bank of Commerce.
“I’m not surprised by anything nowadays. I just keep rolling with the punches. Every company can make their own decisions,” he told media after an Economics Club of Canada luncheon in Calgary on Friday.
While he didn’t go as far Alex Pourbaix, president and CEO of Cenovus Energy Inc., who called the move a “tragedy for Canada,” Mr. Dodig said every decision by a company to move out of the country is a setback for Canada and its economy.
“What we need to do is nurture the retention of great companies that want to compete in Canada, and work really hard to attract many other companies who should have their home office in Canada,” he said.
“What we need to do is try to start changing the dynamics that Canada is open for business. Every fact that we can point to as a business community or as a government or as Canadians that Canada is open for business is a good one.”
In part, that means getting the Trans Mountain pipeline expansion done and back into private hands, he said.
Mr. Dodig told the Economics Club that Encana’s move underscored the urgency with which Canada must take action to further develop its responsible energy industry.
“Canada’s competitiveness in the future relies on us getting a number of things right, but none of this will be possible if we don’t take care of our energy sector we have today,” he said.
Encana’s decision is the latest in a series of foreign oil and gas company departures from Canada. Royal Dutch Shell, ConocoPhillips and Devon Energy Corp. have all sold their Canadian assets or scaled back investments thanks to delays on Trans Mountain and the resulting oil-price pressures.
The company is also changing its name to Ovintiv Inc., which CEO Doug Suttles said Thursday would help break the company from the perception it primarily deals in natural gas. The plan is for Ovintiv to trade on the Toronto and New York stock exchanges under the ticker symbol OVV.
Encana’s move to the United States is dependent on a shareholder vote, slated for early 2020. It also needs stock-exchange and court approval, but requires no specific government approval.
If the changes get the green light, shareholders will receive one share of common stock of the new company for every five shares of Encana.
More information is expected next week in the company’s application to regulators for approval of the change.
According to the Delaware State Department, more than one million corporate entities call Delaware home, including 60 per cent of Fortune 500 companies.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.