Juno News - October 31, 2019


Encana’s move to US unavoidable in Trudeau’s Canada


Episode Stats

Length

5 minutes

Words per Minute

160.54546

Word Count

883

Sentence Count

55


Summary

A giant in Canada s energy sector is moving to the United States. Quite a bombshell announcement from Encana, at one time the largest company in Canada, the most profitable company, and even to this day the second largest producer of shale gas, has announced that it s going to re-domicile to the US.


Transcript

00:00:00.000 A giant in Canada's energy sector is moving to the United States.
00:00:16.000 Quite a bombshell announcement from Encana.
00:00:19.000 At one time the largest company in Canada, the most profitable company in Canada,
00:00:24.000 and even to this day the second largest producer of shale gas,
00:00:29.000 has announced that it's going to re-domicile to the United States.
00:00:33.000 The reason according to CEO Doug Suttles is very simple.
00:00:37.000 Encana, which is going to be named Oventive after shareholders approve the move,
00:00:42.000 needs access to American capital and American investment,
00:00:46.000 which it just isn't getting as a Canadian headquartered company.
00:00:50.000 Now this is not out of nowhere.
00:00:52.000 The company has been Americanizing itself for quite some time.
00:00:56.000 Just under a year ago, Gwyn Morgan, formerly Encana's CEO,
00:01:00.000 wrote an op-ed in the Financial Post talking about this very problem.
00:01:04.000 Over the past three years, he wrote,
00:01:06.000 Encana has shifted much of its multi-billion dollar capital program to the United States.
00:01:11.000 Then last May, Encana CEO Doug Suttles moved from Calgary to Denver.
00:01:15.000 This month came news of Encana's $7.7 billion acquisition of U.S. producer Newfield Exploration.
00:01:22.000 That will mean that Encana's largest production region will now be the United States, not in Canada.
00:01:29.000 Now Gwyn Morgan didn't fault them for this.
00:01:31.000 He says they have an obligation to their shareholders,
00:01:34.000 but he also noted in a statement released after the re-domiciling was announced
00:01:39.000 that it reflects poorly on Canada's energy sector more broadly.
00:01:43.000 This is what he said after the news was announced.
00:01:46.000 The move of Encana's head office to the U.S. deeply saddens me.
00:01:50.000 I spent 30 years building Encana into what was the largest Canadian headquartered energy company.
00:01:56.000 I was privileged to lead a highly dedicated team with a shared passion for our mission.
00:02:01.000 Today, my first thoughts are with them.
00:02:04.000 Having said that, the destructive policies of the Trudeau Liberals have left the company with no choice
00:02:10.000 but to shift its asset base and capital programs south of the border.
00:02:14.000 Now its re-election strikes the final blow.
00:02:17.000 The re-election of the Liberals has caused a huge damper in already dwindling optimism in the Canadian energy sector.
00:02:24.000 We saw Husky announce layoffs immediately after the election, for example.
00:02:28.000 And now one of Canada's largest oil and gas companies is announcing its departure as a Canadian headquartered Canadian company.
00:02:36.000 Even the name Encana, Energy Canada, is gone as the country is losing what has been one of its flagship energy producers for years.
00:02:47.000 The challenge here, of course, is that no one should have optimism in the energy sector under Justin Trudeau.
00:02:53.000 We have re-elected in Canada a Prime Minister who says he wants to phase out the oil sands.
00:02:59.000 Brett Wilson on Twitter posted something very apt about this announcement.
00:03:03.000 He said that Calgary based Encana plans to move base to US amid pipeline crunch.
00:03:10.000 Calgary loses, Alberta loses, Canada loses, NDP wins, Green wins, Alarmism wins.
00:03:17.000 Who pays the bills?
00:03:18.000 The answer is that all Canadians are footing the bill when it comes to shoddy energy policy
00:03:23.000 because we're the ones that have to deal with our decreasing ability to be an energy independent country.
00:03:28.000 And more importantly, to be a country that attracts foreign investment.
00:03:32.000 Now, the CEO of Encana says that politics did not play a factor.
00:03:37.000 He said it was not connected to Trudeau's re-election, but part of a broader discussion that the company was going through.
00:03:44.000 Doug, I'm glad you clarified that because I think some people are going to be listening to you or watching this today
00:03:50.000 and wondering whether or not this decision coming so quickly after the federal election in this country
00:03:56.000 had anything to do with the political environment in this country.
00:03:59.000 Yeah, John, I really appreciate you asking that because the answer is unequivocally no.
00:04:04.000 This was all about trying to make sure the value of this firm is fully recognized in its share price and looking out for shareholders.
00:04:14.000 But how we run the company, how we invest, our long history here in Canada and our quality asset base are still as solid as they've ever been.
00:04:24.000 This is not a political move. This is quite simply accessing the capital trends in the marketplace.
00:04:30.000 Even so, it's impossible, according to many experts, to separate what has been the primary problem identified,
00:04:36.000 an inability to attract foreign investment, with the reality that Trudeau has, as a government leader, turned his back on this sector.
00:04:45.000 This is the loss of something very big in Canada.
00:04:49.000 And even though the company is promising that there will be no Canadian job losses,
00:04:52.000 it's still signaling that they don't have confidence in Canada as far as its ability to house robust and profitable energy companies.
00:05:00.000 So why then should anyone else?
00:05:02.000 True North is standing up for the energy sector. We're standing up for the free market.
00:05:06.000 And we're pushing back against government policy that is critical and antagonistic to this sector that has built and created and continues to build and create so much in this country.
00:05:18.000 If you can support our effort and our perspective that mainstream media is not giving,
00:05:22.000 please do head on over to tnc.news slash donate and offer a contribution as you're able.
00:05:27.000 For True North, I'm Andrew Lutton.
00:05:29.000 I'm Andrew Lutton.