About a week after the provincial budget came out on March 22, Premier Brad Wall sent out letters to a number of oil companies, inviting them to come to Saskatchewan.
A letter to Whitecap Resources offered goodies like assistance with relocation costs, tax incentives, and help in finding a new office here. Government office buildings were even offered.
Other companies were sent similar letters.
In defending the letters, Wall said, “This is my job, is to try and attract permanent new jobs to the province and try and improve our corporate presence.
“This budget makes Saskatchewan more attractive for these kinds of potential considerations.”
Indeed, Wall is correct in saying he’s been doing this for a long time, noting, “I’ve practised that doctrine since we started. I ask companies every time we meet with them if they will move their headquarters or increase their presence.”
In his speech at the 2015 Saskatchewan Oil and Gas Show he noted, “If you happen to be from the province of Alberta, you found us to get here to the show. It’s really easy to find us on a more permanent basis. We have some incentives in the provincial budget you might be interested in.”
I recall a conversation I had with him at that show where I asked him about recent budget measures meant to entice corporate head offices. We were talking about how Crescent Point Energy Corp. had become the largest oil producer in Saskatchewan. At the tail end of our discussion, he said, “The only thing that would make it better is if they were headquartered in Saskatchewan.”
Has the premier been speaking to Crescent Point CEO Scott Saxberg about that?
Wall responded, “I think a lot of people in Saskatchewan have. We understand Calgary is the oil capital, the energy capital. So you do business with your colleagues, with the other energy sector companies, the travel issue… I understand completely why you would want to be there, even if most of your activities are in Saskatchewan.
“But we’re always going to ask. You know, ye have not if ye ask not. So we’re always going to ask. In the budget, we have new growth tax incentives for the export business, which oil is. We have tax incentives for those who bring new corporate office jobs here. We’ve shared that with Crescent Point, and others. Maybe we’d be able to look at other things.
“I think Mr. Saxberg says Saskatchewan people are making the invitation on a regular basis. I hope they keep doing that. We have 1.13 million ambassadors, so that works out pretty good,” Wall concluded with a smile.
Will these efforts to recruit Alberta-based oil companies with significant operations in Saskatchewan bear fruit? Sadly, likely not. If they hadn’t packed up and moved when the Rachel Notley NDP government was elected, they probably aren’t going anywhere. They’ve already toughed out a few years of NDP government. If she were to be re-elected, that might change.
A while back the buzzword in economic development was “clusters.” You had to build up a certain number of firms specializing in a field, and bring enough specialized people together in order to create magic. The most well-known are Silicon Valley and Hollywood in California, New York and London’s financial districts, and, in the oilpatch, Houston and Calgary.
The problem is Saskatchewan does not have the critical mass to support substantial numbers of oil companies in either Regina or Saskatoon, with Regina being the more likely place due to its proximity to both the southeast and southwest oilfields. In Calgary, if you need a geologist, or a geophysicist, or a drilling supervisor, they’re not hard to find. The same goes for a seismic firm, directional drilling company, or pretty much any conceivable oilfield specialty under the sun, be it individual or corporate. To relocate to Saskatchewan means a constant battle of trying to recreate that critical mass here, by drawing them from Calgary.
Let’s not forget the sheer number of deals that happen every day in downtown Calgary. There’s a reason the Petroleum Club exists.
If Wall could convince a dozen companies or so to come here, all at once, and set up in Regina, you might have the start of that cluster. At bare minimum you would want Crescent Point, Husky Energy, Whitecap Resources, Tiene Energy, Raging River Exploration and Spartan Energy. Those are most of the significant producers in this province. Husky and Crescent Point would be the prizes, but given the size of the tower that bears Husky’s logo in downtown Calgary, they’re probably not going anywhere. And what happens if Crescent Point gobbles up the rest?
So Premier Wall will keep asking. Just don’t get your hopes up.
Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.
