‘We’re ready for them:’ Texans see opportunity in western Canadian malaise
September 23, 2019 | By Lauren Krugel
CALGARY – The brochure’s cover has the Texas flag as a backdrop and shows an arrow pointing from Alberta to the Lone Star State.
“Arrowstar Realty invites you to relocate to Texas,” reads the mailer sent to businesses across Western Canada recently. “Join the 100s of companies that have already made the move!”
Inside is a letter _ beginning “Dear Canadian Neighbour” – boasting of Montgomery County’s “BOOMING” economy, tax incentives and ranch-style properties. It offers to link prospective clients with banks, accountants and lawyers to ease their move.
Realtor Robert Graham says 15,000 brochures have been delivered in Alberta, Saskatchewan and British Columbia so far. Another 50,000 are coming.
He says Arrowstar has helped about 100 western Canadian companies move north of Houston in the last decade, and 40 of them were in the last year and a half.
The majority of newcomers have been Canadian oil and gas drillers, a sector that has hit a rough patch in recent years.
“I definitely want Canada to pick back up. I would love for that more than anything,” says Graham.
But for now, he says, a lot of Canadian businesses need help to keep going.
“We’ve got doors open and we’re ready for them.”
Krisjan Jones, operations manager at livestock feed supplement maker Canadian Bio-Systems, says Lubbock’s economic development agency recently made an enticing pitch to move his business to the west Texas city.
It was offering land at no cost with utilities and rail access.
“So essentially you get a blank canvas for free,” says Jones, who adds he’s waiting on the outcome of the Oct. 21 federal election before pulling the trigger. He cites the federal carbon tax as a major issue for him.
Clogged railways that make it difficult to get international shipments out on time are another big knock against Canada, he says.
John Osborne with the Lubbock Economic Development Alliance says pitches are centred more on the long-term business case than politics or potential perks. When benefits are discussed, it’s more of a problem-solving exercise.
“We look at it as ‘What’s stopping you from saying yes to coming to Lubbock right now?”’
That could mean free land, sewer and water hookups or road paving.
Osborne says his group has been doing Canadian outreach for about a decade, but it’s gone from sporadic to regular in recent years. Most trips are to Calgary and Toronto and have been with companies in oil and gas, manufacturing and agriculture.
Precision Drilling CEO Kevin Neveu moved to Houston from Calgary three years ago with the rest of the company’s management team. It has about 250 employees in each city now.
Neveu says 2017 was the first year Canada made up less than half of Precision’s activity and this year it’s at 30 per cent.
Alberta’s oil curtailments, trouble building new pipelines and cooling investor sentiment have depressed the Canadian industry, he says.
“It’s those three factors that are really starving our customers for capital, which means they’re not reinvesting in drilling, which means that our business here is just really slow – brutally slow.”
Mark Scholz, head of the Canadian Association of Oilwell Drilling Contractors, says every member he’s spoken to has at least seriously considered moving people or equipment out of Canada. The association represents more than 100 companies that drill or service oil and gas wells.
He says moves from Alberta’s new United Conservative government to lessen the regulatory and tax burden are helping with competitiveness, but the southbound exodus is a wake-up call.
“The Americans are playing a very strategic game and quite frankly I think they’re winning at that.”