Loss of Shaw head office disappoints but regional office eases pain, observers say

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This article was published 15/03/2021 (2030 days ago), so information in it may no longer be current.

CALGARY – The loss of the Shaw Communications Inc. headquarters in Calgary as part of the proposed sale of the homegrown Alberta company to Rogers Communications Inc. is disappointing but spending and job creation vows will ease the pain, observers said Monday.

Rogers said it will invest $6.5 billion in Western Canada to build 5G networks, connect underserved rural and Indigenous communities, and add choice for customers while creating up to 3,000 net new jobs in the four western provinces.

It also vowed to retain a Western Canada headquarters in Calgary and set up a new national centre for technology and engineering excellence in the city.

In a news conference, Premier Jason Kenney said he was reassured by the two companies’ CEOs on Sunday but intends to make sure those commitments are fulfilled as they seek approvals from the Competition Bureau and the Canadian Radio-television Telecommunications Commission.

“The government of Alberta will closely monitor Rogers’ regulatory filings and we will likely make submissions to the regulatory agencies to defend the best interests of our economy and our consumers,” he said.

“Particularly, we will seek to have the commitments that have been made to increase employment and investment, we will seek to have those made as a condition of federal regulatory approval.”

He said about 1,800 of the 3,000 jobs are to be located in Alberta and 500 in Calgary at the new centre.

Shaw Communications has been a major part of the Alberta economy for decades but started out small, co-founded by JR Shaw and incorporated in Edmonton in 1966 under the name Capital Cable Television Co. Ltd.

It connected its first cable customer and went on the air for the first time in 1971, eventually moving its head office to Calgary in the mid-1990s and growing into one of the country’s largest cable providers, with radio and television broadcasting assets (that it later sold) and a substantial wireless business.

Colourful Jim Shaw, JR’s oldest son, was CEO for a dozen years starting in 1998 and led the company through a rapid growth period. He died in 2018 at the age of 60.

Youngest son Brad Shaw took over as chief executive in 2010 and became executive chair when JR Shaw died at age 85 a year ago.

The Shaw family has been able to retain control of the company through the Shaw Family Living Trust and its subsidiaries, which held about 79 per cent of the voting shares at the end of 2020, according to a recent regulatory filing.

Shaw Communications is “a made-in-Alberta success story,” said Kenney.

“So, obviously, we would strongly prefer that Rogers locate its national head office in Alberta,” he said.

Calgary lost nine head offices and 3,600 head office jobs between 2014 and 2019 as low commodity prices led to consolidation and corporate failures in the oil and gas sector, Statistics Canada says.

Over the same period, the number of head office jobs in Alberta fell by almost 5,500 positions while it rose by almost 2,800 positions in the rest of the country.

While the loss of another head office is disappointing, the fact Rogers will keep a Western Canada headquarters in Calgary and has promised to create more jobs in the region is heartening, said Mary Moran, CEO of Calgary Economic Development.

“We’ll gain a regional head office with Rogers’ commitment to continue to expand in here,” she said.

“They’ve talked a lot about the investment they’re going to make into the region, so $6.5 billion into the region and creating 3,000 jobs, of which we’re pretty comfortable a fair number of them will come into Calgary.”

She pointed out Calgary still has the highest number of head offices per capita of any city in Canada and said its efforts to promote growth of technology companies is bearing fruit.

“From an employment number outlook, it actually looks like a positive transaction,” said Adam Legge, president of the Business Council of Alberta and former CEO of the Calgary Chamber of Commerce.

“Yes, we’ll have one less actual headquarters in Alberta’s roster but it sounds like the western Canadian headquarters for the company will be in Calgary and all of the important decisions and jobs related to it.”

Both Moran and Legge said the Shaw-Rogers merger appears to make sense from a business perspective as network size becomes increasingly important in the telecommunications industry.

This report by The Canadian Press was first published March 15, 2021.

Companies in this story: (TSX:RCI.B, TSX:SJR.B)

Note to readers: This is a corrected story. An earlier version misstated the name of Calgary Economic Development.