Skip to main content

Nationalist angst boils up every time a little bit of Canada is sold.

Witness the reaction to the news this week that the beloved Tim Hortons chain is falling into the clutches of U.S. fast-food giant Burger King.

Worried about the potential loss of Canadian institution – and jobs – NDP Industry critic Peggy Nash demanded that Ottawa closely scrutinize the deal and not simply give it "a Conservative rubber stamp."

Story continues below advertisement

Her concern is misplaced.

Corporate citizenship is a murky concept when it's applied to global brands such as Tim Hortons and Burger King. The narrative is not as straightforward as a U.S. giant swallowing a Canadian icon.

Tim Hortons, named after the rugged former Toronto Maple Leafs defenceman, is more of a dual citizen than a pure-blooded Canadian anyway. Recall that the company was owned by Ohio-based Wendy's from 1995 to 2006, before being spun off as a separate public company in an initial public offering.

Through it all, Timbits and the double-double survived. And the chain thrived, continuing its expansion into the U.S. and the Middle East.

Its head office is in Oakville, Ont., and its shares are listed in Toronto. But it's owned by investors around the world.

After the transaction, Burger King insists Oakville will still be Tim's "global home." The shares of the new company will also be listed on the Toronto Stock Exchange.

The vast majority of Tim Hortons' 3,630 Canadian restaurants and many of its 866 U.S. outlets are independently owned by Canadian franchisees. And that won't change.

Story continues below advertisement

Burger King, meanwhile, also holds multiple passports. It's based in Miami. But it's a citizen of the Americas, with restaurants in nearly 100 countries.

It's not even clear Burger King is truly an American brand any more. Brazilian private equity firm 3G Capital – a key investor in Heinz and Anheuser-Busch InBev – currently owns 70 per cent of Burger King. And the Brazilian company will own roughly 51 per cent of the newly created Burger King-Tim Hortons combo.

So what passport will the new company hold? Brazilian, American, Canadian, or all three? And more importantly, does it even matter?

The highly successful Canadian restaurants aren't likely to change much. The chain already enjoys envied retail penetration here.

The Conservative government was quick to applaud the takeover as an endorsement of its tax policies. In a statement, Industry Minister James Moore said the transaction is proof that Canada's lowest-in-the-G7 tax rates are making it "one of the best countries in the world to do business." Citing a KPMG study, Mr. Moore pointed out that Canadian corporate tax rates are 46 per cent lower than in the U.S.

But it's not clear that lower Canadian tax rates are the main driver of the transaction, even though the company's global headquarters will be in Canada. Burger King currently pays combined U.S. federal, state and local taxes in the mid-20 per cent range, or roughly "in line" with Tim's tax rate in Canada, according to Burger King CEO Daniel Schwartz. And that won't change "materially" after the transaction, he told reporters on a conference call Tuesday. The same would presumably be true of Canada's current corporate tax haul from Tim Hortons.

Story continues below advertisement

Federal Finance Minister Joe Oliver confirmed Tuesday that Investment Canada would review the transaction to determine if it's a "net benefit" to the country.

The bottom line is that Canada will be the new headquarters of a very large global retailer.

And the executives of the merged company insist their top priority will be to figure out how to take the Tim Hortons brand to new places in the world, starting with a renewed U.S. invasion.

It's hard to imagine why anyone in Canada would object sharing Tim Hortons with the rest of the world.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies