Business analysts and economic development agencies understand that the presence of corporate head offices brings many benefits to cities and regional economies. Not only do large companies and fast-growing mid-sized firms directly support high-paying jobs, they also indirectly help to sustain employment in other local industries that sell goods and services to the head office sector – e.g., law and accounting firms; suppliers of financial, engineering and environmental services; and recruitment and public relations specialists. A strong foundation of head offices also often leads to higher levels of business support for local universities and colleges, hospitals, cultural institutions, and other charitable and philanthropic causes.
In short, there are many reasons why policy-makers and community leaders should be keen 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 some sizable businesses, due to consolidation in industries like mining and forestry, take-overs of large BC-based enterprises 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 BC-based enterprises, which have evolved from small firms to become much larger organizations. But the net picture remains one where the Greater Vancouver region has continued to struggle to expand the overall head office sector.
Last year, the Business Council published two short pieces that examined “corporate Vancouver” – the mix of large, locally-headquartered firms found in Metro Vancouver. We looked at both public companies and privately owned ones, drawn from the top 100 businesses in each category (ranked by revenue). It turns out that these companies span a rather diverse set of industries, with mining, manufacturing, technology, forestry, and retail/wholesale trade emerging as the most important sectors measured by the number of large BC-based companies.
Recent work by Statistics Canada has augmented our knowledge of head offices in the wider Canadian context. The Annual Head Office Survey for 2015 counted head offices and estimated direct head office employment 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 establishment in question. In most cases, a head office oversees multiple business establishments located in more than a single city or region. The definition used by Statistics Canada captures BC 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 that are headquartered here but whose main business activities are concentrated elsewhere (e.g., Methanex, Silver Wheaton, Goldcorp).
Table 1 below shows the number of head offices as well as direct head office employment in the five biggest provinces, for 2012 and 2015. Table 2 does the same for the leading Canadian metro areas. A few points are worth noting.
- Nationally, the number of large Canadian-headquartered firms has been fairly stable over the past few years, while direct head office employment has risen modestly.
- British Columbia, which ranks fourth among the provinces as a home base for large Canadian companies, hosted 11.2% of such firms in 2015, down marginally from 2012.
- Despite a slight drop in the number of headquarters, direct head office employment in BC has inched higher since 2012.
- Among Canadian metro areas, Toronto and Montreal stand out for the size of their corporate sectors, together accounting for almost 40% of Canadian head offices. Metro Vancouver ranks third with 8.5%, followed by Calgary (7.7%) and then Edmonton (4.1%).
Head Offices and Direct Head Office Jobs
|Head Offices||Jobs||Head Offices||Jobs|
|Head Offices||Jobs||Head Offices||Jobs|
Another way to gauge the success of a city or province as a location for head offices is to measure head office jobs relative to total employment in each jurisdiction. We do this in Table 3. The data show that both British Columbia and Metro Vancouver punch below their weight in head office jobs compared to other provinces and most competing Canadian metros.
Head Office Jobs by Province and by Metro Area
per 1,000 Employees, 2015
|By Metro Area|
All of this underscores the need for a stepped-up focus by BC policy-makers and business leaders on growing more locally-based companies and attracting firms from elsewhere to invest here. Achieving success in this area would pay economic dividends for our province.