B.C. Business Matters:
Jock Finlayson >>
Statistics Canada’s Annual Head Office Survey
Statistics Canada’s latest survey of head offices provides updated counts of direct head office jobs for each province and the most important metropolitan areas across the country.
The survey covers both publicly-traded and privately owned companies as of 2017. 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 facilities/operations located in more than a single community.
The definition used by Statistics Canada captures large and mid-sized companies from every sector of the economy. Among large companies, some examples of locally-based firms with significant operations in B.C. include Tolko Industries, Polygon Homes, London Drugs, Teck, Stemcell Technologies, Coast Capital Savings, and Ledcor Industries. The survey also counts firms that are headquartered in B.C. but whose main business is concentrated elsewhere or whose activities are dispersed broadly across multiple jurisdictions (e.g., Methanex, Silver Wheaton, Lululemon).
Table 1 below shows the number of head offices as well as direct head office employment nationally and in the five biggest provinces for 2013 and 2017. Table 2 does the same for the leading Canadian metropolitan areas.
Head Offices and Direct Head Office Jobs by Province, 2013 and 2017
|Head Offices||Jobs||Head Offices||Jobs|
Head Offices and Direct Head Office Jobs by Census Metropolitan Area (CMA), 2013 and 2017
|Head Offices||Jobs||Head Offices||Jobs|
A few points are worth noting about the most recent results:
- From 2013 to 2017, head office employment in Canada rose by 1.4% but the number of head offices declined.
- British Columbia ranks fourth among the provinces in both head offices and direct head office jobs. However, B.C. trails far behind third-place Alberta in head office employment, with less than half as many direct corporate jobs. This reflects the comparative paucity of large companies based in B.C.
- The number of B.C. corporate head offices dropped by 11 between 2013 and 2017, while Metro Vancouver lost three HQs over the same period.
- Somewhat surprisingly given the economic vibrancy of the Greater Toronto Area, Metro Toronto lost head offices over 2013-2017. However, the GTA gained almost 4,000 net head office jobs in the same time frame.
- Within Canada, employment at head offices remains concentrated in Ontario (42.8%), Quebec (23.4%) and Alberta (16.4%).
- The majority of employees in head offices work in census metropolitan areas (CMAs). Among CMAs, Toronto has the largest number of head office jobs (77,167 in 2017), followed by Montréal (42,619), Calgary (29,068) and then Vancouver (15,783).
- Toronto also hosts the largest number of corporate headquarters, 696 as of 2017, followed by Montréal (385), Vancouver (239) and Calgary (213).
- While it is home to slightly more corporate HQs, Metro Vancouver has barely half as many head office jobs as Calgary.
British Columbia as a whole and Vancouver as a metropolitan region continue to struggle to develop a strong cluster of major corporate head offices, as noted in a recent article in BC Business. That is worrisome, since the presence of locally-headquartered enterprises of significant size is a powerful economic driver and a key factor in creating and sustaining high-wage employment. Consultants at McKinsey describe Metro Vancouver as a “minnow” in the North American context, judged by the number of large firms based here. When juxtaposed to sky-high housing prices, the weakness of Metro Vancouver as a host community for corporate HQs is even more troubling. One way to improve overall “affordability” is to boost the incomes of employees and households. Unfortunately, that will be very difficult to accomplish without a sizable and expanding head office sector.