Why Alberta politicians hope a takeover bid of Calgary's Shaw will be an economic win

·4 min read
Why Alberta politicians hope a takeover bid of Calgary's Shaw will be an economic win
The headquarters of Shaw Communications in downtown Calgary, pictured here in 2018. Rogers Communications is making a $26 billion bid for the company. Shaw employs 3,250 Albertans, including 2,670 in Calgary. (Jeff McIntosh/The Canadian Press - image credit)
The headquarters of Shaw Communications in downtown Calgary, pictured here in 2018. Rogers Communications is making a $26 billion bid for the company. Shaw employs 3,250 Albertans, including 2,670 in Calgary. (Jeff McIntosh/The Canadian Press - image credit)

The headquarters belonging to Shaw Communications practically screams Calgary and Alberta.

Located a short distance from the Bow River, it has an exterior reminiscent of the city's oldest sandstone structures and a large, steel sculpture of a bison erected outside its doors.

The company has also been a fixture on the city's business landscape for years, becoming one of the province's flagship corporations. It employs 3,250 Albertans, including 2,670 in Calgary.

So when Toronto-based Rogers Communications announced its plans on Monday for a $26 billion takeover of the business, one might expect some trepidation.

And inside the offices at Shaw Court, there could well be some anxious staff.

But from the premier's office to city hall, Alberta politicians were welcoming the news just hours after the announcement, banking on some big promises from the bosses at both companies.

The list of commitments includes keeping the western head office of the combined business at its current location in Calgary, where the president of western operations would also be based.

Rogers also said it would put $2.5 billion into building a 5G network in Western Canada, with new technology and network investments creating up to 3,000 net new jobs across Alberta, British Columbia, Manitoba and Saskatchewan.

The Toronto head office of Rogers Communications is shown on Monday. Rogers has signed a deal to buy Shaw Communications in a transaction valued at $26 billion, including debt, which would create Canada's second-largest cellular and cable operator.
The Toronto head office of Rogers Communications is shown on Monday. Rogers has signed a deal to buy Shaw Communications in a transaction valued at $26 billion, including debt, which would create Canada's second-largest cellular and cable operator.(Evan Mitsui/CBC)

Premier Jason Kenney and Calgary Mayor Naheed Nenshi got the pitch a day earlier.

Both said they spoke with Joe Natale, president and CEO of Rogers, on Sunday to discuss the massive deal, with neither company apparently wanting to catch the politicians flat footed with the news.

Kenney acknowledged that the proposed merger would have "significant implications" for the province's economy, but he spoke of the positive commitments Natale made about increased jobs, service and investment in Alberta.

WATCH | Alberta premier touts job creation in Rogers-Shaw deal:

"We would hold Rogers to those commitments as they would be good news for Alberta's economy," he said. "The plan outlined by Rogers and Shaw would make significant net job growth in Alberta, especially in high-paying high-tech jobs."

For his part, Nenshi sounded a little more cautious, saying the deal has the potential to be a transformative investment in the city, particularly in its tech and communications sectors. But he said the devil is in the details.

"I had the opportunity last night to speak with the CEO of Rogers at some length about what is happening and pointed out to him quite clearly that while we welcome this enormous investment in Calgary, Shaw is also our largest, non oil-and-gas head office," Nenshi said.

"It is also the largest employer of engineers in Calgary. And so it's important to us that there be a net benefit for Calgary here — not just in front-line jobs and capital investment, but also in downtown jobs."

That's key for the city, because the last few years have been undeniably rough for Calgary's downtown, with the office towers in the once-bustling core emptying out as the downturn in the oil and gas sector dragged on.

Nenshi said the Rogers CEO made it clear that his goal was not that this become a "giant sucking sound out of Alberta but rather that it work in the reverse direction."

"Certainly, I will be looking for a little more detail on that, a little more assurance on what that will look like going forward," the mayor said.

Calgary Mayor Naheed Nenshi said the deal has the potential to be a transformative investment in the city, but he added that the devil is in the details.
Calgary Mayor Naheed Nenshi said the deal has the potential to be a transformative investment in the city, but he added that the devil is in the details.(CBC)

If Nenshi were to ask Patrick Horan about what it might mean for jobs, he might hear something a little different. When asked about potential job gains resulting from the deal, the portfolio manager at Agilith Capital Inc. said he's "skeptical."

"There is no official audit, sort of post-mortem, on these things," Horan told CBC News.

"No one really does the true count on this."

Similarly, longtime telecom industry watcher and journalist Greg O'Brien told CBC's The Calgary Eyeopener on Monday that there are always job losses attached to these kinds of deals.

"The job creation may come later in the future, but there are duplications," O'Brien said, adding that merged corporations don't need two finance departments, for example.

"But what they will need is ... technicians on the ground, customer service reps, things like that. So they're going to retain thousands of employees, obviously. But there will be layoffs when they find the duplication."

People probably won't know exactly what those implications may be for a year or more, as the deal isn't expected to close until the first half of 2022. It still has many hurdles to clear, including a review by the federal Competition Bureau, the Canadian Radio-television and Telecommunications Commission and the federal government.

The province and the city could use an economic win. Its leaders will hope this is one.