Billionaire Investor Edwards Decamps From Calgary to Londonby
Business leader gives up base in heart of Canadian oil patch
Move made public in corporate filing for Magellan Aerospace
Murray Edwards, the billionaire investor and elder statesman of Canada’s hard-hit oil patch, has left his Calgary home and relocated to London.
Edwards’ move, which has been the source of speculation in Canada’s energy hub for weeks, was confirmed in a regulatory filing by Magellan Aerospace Corp., a Mississauga, Ontario-based aircraft manufacturer controlled by Edwards.
The 56-year-old’s residence is listed as London in the annual information form released by Magellan on Wednesday, compared with a listing of Alberta a year earlier. He’s been a director of the company since 1995 and is its largest shareholder, with a 74 percent stake as of June, according to data compiled by Bloomberg. In prior regulatory documents for other companies of which he’s a director, his residence had been listed as Calgary/Banff, Alberta. Edwards didn’t return phone and e-mail messages on Thursday.
Edwards has been immersed in building the oil and natural gas industry in Canada for decades through investments and by advising on government policy. In order to be considered a non-resident by Canada for tax purposes, a person must routinely live in another country or show they don’t have significant residential ties to Canada by staying in the country for fewer than 183 days a year.
His move comes as a downturn in oil prices that has extended past 21 months is weighing on Canada’s producers and has contributed to tens of thousands of job cuts in the nation’s energy industry. Canada’s oil sands are among the most expensive reserves in the world to develop.
Alberta’s rich are also facing a double hit of higher provincial and federal taxes this year. Alberta had been seen as an attractive place for investment because of its lower levies.
“The same people that came here shopping for attractive tax rates are going to be shopping somewhere else,” Catherine Anne Brown, a law professor at the University of Calgary focused on tax matters, said in a phone interview on Thursday. “I think we’ve shot ourselves in the foot by taking away the Alberta advantage.”
The Alberta government introduced a sliding scale including an 11.25 percent rate for people with the highest annual taxable income above C$300,000 ($226,000) last October and a 15 percent rate starting in 2016. The Canadian federal government raised its income tax rate for top earners to 33 percent in 2016, from 29 percent previously. Together, the combined rates for the biggest earners increased nine percentage points to 48 percent.
A native of Regina, Saskatchewan, Edwards has publicly reported holdings totaling C$1.3 billion in companies including Canadian Natural Resources Ltd., Magellan, Ensign Energy Services Inc. and Imperial Metals Corp., according to data compiled by Bloomberg. He is also a part owner and chairman of the National Hockey League’s Calgary Flames and owns several ski resorts through a company called Resorts of the Canadian Rockies.
Edwards is known for playing an active role in his investments and the business community, and for his focus on keeping costs at his companies low and doing deals. He is the executive chairman of Canadian Natural, an operator in the oil sands and frequent consolidator in the nation’s energy industry that represents his largest investment by value. In NHL labor talks in 2012 in New York that led to a player lockout, Edwards was among owners at the table.
It’s possible to manage investments and maintain director roles from afar, though it’s tougher, said Richard Leblanc, an associate professor of law, governance and ethics at York University in Toronto. Most boards meet five or six times a year and have yet to embrace technology such as videoconferencing, he said.
“It will be a challenge for him and for his boards,” Leblanc said. “Face-to-face meetings are certainly going to be less likely than if he was living in Calgary.”
The investor’s clout in shaping policy has been evident both at the national and provincial levels, including in his role as a director of two business-focused research and advocacy groups, the Canadian Council of Chief Executives and C.D. Howe Institute.
Edwards was among oil executives to publicly support Alberta’s new climate policy introduced last November, which includes a rising carbon tax and emissions limits for industry, appearing on stage to speak after Premier Rachel Notley. The policy was seen as a compromise between energy executives and the environmentalists who have long lobbied against developments in the oil sands and proposed pipelines. Edwards said it would replace the adversarial discussion of the past with a more positive one.