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Finlayson: BC must develop a stronger corporate head office presence (Troy Media)

By Jock Finlayson

Business analysts and economic development agencies understand that the presence of corporate head offices brings many benefits to cities and regions Not only do large companies and fast-growing mid-sized firms directly support high-paying jobs, they also help to sustain employment in other local industries that sell goods and services to the head office sector – law and accounting firms; suppliers of financial, engineering, transportation and environmental services; and recruitment and public relations specialists. Moreover, a solid foundation of head offices often leads to greater business support for local universities and colleges, cultural institutions, and other philanthropic causes. 

In short, there are many reasons why policy-makers should seek to develop a robust head office cluster. 

This is an area where Metro Vancouver has long been a mediocre performer. Over the last 25 years, the region has seen the disappearance of many large businesses due to consolidation in industries like mining and forestry, take-overs of B.C. firms that subsequently shed corporate jobs, and the occasional relocation of companies to other jurisdictions.  Fortunately, this has been offset to a significant extent by the growth of other B.C. enterprises, which have evolved from small firms to become much larger organizations.  But the overall picture is one where B.C. generally and Greater Vancouver in particular have struggled to expand the head office sector. 

Statistics Canada’s annual Head Office Survey for 2015 counted head offices and estimated direct head office jobs for each province and several major metropolitan areas. The survey covered both public and private companies.  A head office is defined as an “establishment…primarily engaged in providing general management and/or administrative support services” to affiliated operations and lines of business owned by the company in question.  This definition captures B.C. companies that do significant business within the province (e.g., HSBC Bank Canada, Canfor, West Fraser, Teck, the Jim Pattison Group, Concert Properties, and Telus), as well as firms headquartered here but whose main production facilities are located elsewhere (e.g., Methanex, Goldcorp).
 

Table 1:   
Head Offices and Direct Head Office Jobs  
by Province 

 

2012 

2015 

 

Head Offices 

Jobs 

Head Offices 

Jobs 

Ontario 

1,107 

93,077 

1,084 

95,654 

Quebec 

577 

51,544 

562 

53,049 

Alberta 

399 

39,770 

385 

40,990 

B.C. 

319 

16,343 

307 

17,394 

Manitoba 

109 

6,728 

104 

7,393 

Canada 

2,793 

222,339 

2,724 

229,160 

 

Table 1 shows the number of head offices along with direct head office employment in the five biggest provinces for 2012 and 2015. Table 2 does the same for major Canadian metro areas. A few points are worth noting.  

  • Nationally, the number of large Canadian-headquartered firms has been fairly stable since 2012, while direct head office employment has risen modestly. 

  • British Columbia ranks fourth among the provinces as a base for larger companies, hosting 11.2 per cent of these firms in 2015, down marginally from 2012.  

  • Among metro areas, Toronto and Montreal stand out for the size of their corporate sectors, together accounting for almost 40 per cent of Canadian head offices.   

Another way to gauge the success of a city or province as a location for corporate headquarters is to measure head office jobs relative to total employment.  As Table 3 shows, both British Columbia and Metro Vancouver punch below their weight in corporate head office jobs, compared to other provinces and most competing Canadian metros.  Alberta and Calgary perform exceptionally well on this metric, reflecting the concentration of energy-related businesses in the province and city. 

All of this underscores the need for an increased focus by policy-makers in B.C. and Metro Vancouver on growing more locally-based companies and attracting investments from firms based elsewhere.  Success in this domain would produce sizable economic dividends.

Table 2:  
Head Offices and Direct Head Office Jobs  
by Canadian Metro Area
 

 

2012 

2015 

 

Head Offices 

Jobs 

Head Offices 

Jobs 

Toronto 

718 

73,380 

690 

75,120 

Montreal 

397 

40,824 

381 

42,189 

Vancouver 

244 

14,513 

233 

15,225 

Calgary 

222 

31,572 

210 

31,569 

Edmonton 

120 

6,242 

112 

6,127 

Winnipeg 

92 

6,435 

87 

7,076 

Ottawa 
-Gatineau 

74 

6,901 

69 

7,304 

Quebec City 

60 

6,269 

57 

6,697 

 

 

Table 3: 
Head Office Jobs by Province and by Metro Area 
per 1,000 Employees, 2015 

By Province 

Alberta 

17.8 

Ontario 

13.8 

Quebec 

12.9 

Manitoba 

11.6 

B.C.  

7.5 

Canada 

12.7 

By Metro Area 

Calgary 

39.5 

Toronto 

23.3 

Montreal 

20.7 

Winnipeg 

16.6 

Quebec City 

15.1 

Vancouver 

11.4 

Ottawa-Gatineau 

10.3 

Edmonton 

7.9 

 

Published online by Troy Media