CALGARY — Saskatchewan Premier Brad Wall is taking a turf war with Alberta to its economic heart, inviting energy companies based in Calgary to move their headquarters to his province.
In a letter to Whitecap Resources (TSX:WCP) dated Monday, Wall offers to subsidize relocation costs, trim taxes and royalties and help find space in unused government buildings if the oil and gas firm moves to Saskatchewan.
Wall cites reductions to corporate and personal income taxes promised in his recent provincial budget as further incentives, adding that his government has no intention of implementing a carbon tax like the one Alberta did this year.
Brad Wall has invited Calgary-based energy companies to move to Saskatchewan. (Photo: Mark Taylor/CP)
"Given these major tax changes and your production presence in our province, I would therefore like to formally ask you to consider a relocation of your head office from Calgary to Saskatchewan," reads the letter.
Kathy Young, a spokeswoman for Wall, said the letters were sent to several energy firms. She said Wall "takes every opportunity" to ask companies to move their headquarters to Saskatchewan.
The letter emerges in the wake of public bickering between Notley and Wall over each other's provincial budgets. Neither was available for comment.
"Given these major tax changes and your production presence in our province, I would therefore like to formally ask you to consider a relocation of your head office from Calgary to Saskatchewan.'" —Premier Brad Wall
The letter, provided to The Canadian Press, says it may make sense for Whitecap Resources and other Calgary companies with oil and gas production in Saskatchewan to make a "co-operative joint move" to benefit from additional cost savings.
Calgary Economic Development president Mary Moran said tax "tweaks" in the Saskatchewan budget don't overcome Alberta's competitive tax advantage, adding that Wall's short-term incentives will "borrow loyalty, not buy loyalty."
"I'm not a big believer, whether it be labour or companies, that it serves us well as a country to be poaching from one province to the other," Moran said.
Alberta Economic Development Minister Deron Bilous said Albertans pay "billions less total tax than Saskatchewan" due to no sales tax, payroll tax or health-care premiums. Bilous also said his province has some of the lowest gasoline and diesel taxes in Canada.
"Contrary to Premier Wall's claim, businesses know the federal government will impose a carbon levy in his province," he added.
Some companies are taking Wall's offer seriously
Whitecap Resources CEO Grant Fagerheim said he's taking Wall's offer seriously but would only move if it would benefit his company's shareholders. He conceded such a decision would come as a "shock" to his Calgary head office staff of 105.
"It's a very pleasant offer from Premier Brad Wall but we have to look at that in much more detail," Fagerheim said.
"When we're working for shareholders, we have to consider all of our costs and everything that goes alongside that, (including) logistics."
Whitecap Resources produces about 50 per cent of its oil and gas in Alberta, 40 per cent in Saskatchewan and the rest in B.C., said Fagerheim. Other Calgary companies with oil and gas production in Saskatchewan include Crescent Point Energy (TSX:CPG), Husky Energy (TSX:HSE), Raging River Exploration (TSX:RRX) and Surge Energy (TSX:SGY).
Notley's NDP government tabled a budget this month that relies on economic growth to balance the books in six years. Wall's budget boosts the provincial sales tax and cuts spending with the aim of returning to surplus in three years.
When Notley was asked whether there is anything in the budget tabled by Wall's right-leaning government that she would never do, she replied: "Almost everything."
On the weekend, Wall took to Twitter to say he wasn't about to take budgeting advice from Notley and the Alberta NDP.
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