TransCanada Corp. is planning to drop “Canada” from its name to reflect its growing focus on the United States and Mexico, a move that is raising concerns in Alberta about its long-term commitment to Calgary as a head office.
The pipeline company − which now earns more than half of its profits from its U.S. operations − said that it will rename itself TC Energy, given its expanded footprint after a US$13-billion acquisition of Columbia Pipeline Group Inc. in the United States and major investments in Mexico. TransCanada chief executive Russ Girling announced the proposed name change − which is subject to shareholder approval − while visiting Mexico City to meet with company employees there.
“While our strategy and priorities remain the same, we believe the new name will help to further unite our employees and enable us to better connect with our diverse stakeholders,” Mr. Girling said in a news release.
The name-change announcement comes as industry executives in Calgary express frustration over the investment climate in Canada − ranging from the ability of opponents to block pipeline projects, to the imposition of carbon taxes, to federal legislation that they argue will make it far more difficult to get resource projects approved. The lack of sufficient pipeline capacity led the Alberta government to impose production cuts on oil companies in the province in order to reduce the glut of crude that was driving down the price that producers could fetch.
TransCanada spokesman Grady Semmens said the name change does not signal a lessening of the company’s commitment to Canada, but merely an attempt to reflect its expanded mandate. The company had floated the possibility of making the change after acquiring Columbia.
Dennis McConaghy, a former TransCanada executive vice-president of pipeline strategy and development, said the company’s name change and its expanded footprint suggests that “an inevitable relocation to Houston [is] an entirely logical inference” given the often negative attitude toward pipeline projects in Canada. However, TransCanada has also faced political backlash in the United States over its Canadian status, most notably with its stalled Keystone XL project where opponents in Nebraska criticized efforts by a foreign company to seize land along the pipeline route through the use of eminent domain.
The company was created by a special act of Parliament in 1951 to bring Western Canadian gas to Ontario and Quebec markets. TransCanada has experienced strong growth in recent years with the boom in oil and gas production across North America. After the 2016 acquisition of U.S.-based Columbia, it now has nearly as many employees in the United States as it has in Canada. It makes 52 per cent of its earnings in the United States and only 40 per cent in Canada, with the rest from Mexico.
The industry’s loss of faith in Canada will result in the loss of investment, head offices and activity in support industries such as finance and law offices in Calgary, said Martha Hall Findlay, president of the Canada West Foundation, a Calgary-based think tank.
“There is no question that TransCanada has been increasingly investing further abroad, and we’re seeing this at all levels of the industry,” Ms. Hall Findlay said. “TransCanada changing its name − to me it’s just one more symptom about a lack of enthusiasm about investment in Canada."
TransCanada is currently facing Indigenous protests from members of the Wet’suwet’en First Nation over its plan to build the Coastal GasLink natural-gas pipeline through northern British Columbia to serve planned liquified-natural-gas plants on the coast. The RCMP is now enforcing a court order to remove the blockade and allow the project − which has support from elected First Nations councils along its route − to proceed.
The company suffered a major setback 15 months ago when it cancelled its proposed $15-billion Energy East pipeline that would have carried more than a million barrels a day of crude to eastern Canadian refineries and export terminals. While industry and political critics blame the Liberal government, the company has faced similar problems in the United States. Its planned Keystone XL pipeline remains stalled over court challenges in Nebraska, while the state of Maryland last week denied the company a permit to build a pipeline under the Potomac River in the northwestern part of the state.