ENBRIDGE SCORES A WIN

Ap­point­ment of ex-boc gover­nor helps give pipe­line giant an edge, say ob­servers

Calgary Herald - - FRONT PAGE - GEOFFREY MOR­GAN Fi­nan­cial Post

Poloz brings fed­eral ex­per­tise

CAL­GARY North Amer­ica’s largest pipe­line com­pany Enbridge Inc. notched a ma­jor win Thurs­day with a board ap­point­ment of Stephen Poloz, who had left his job as the Bank of Canada gover­nor on Tues­day.

“I think Steve brings a very unique skill set and in­sight,” Enbridge pres­i­dent and CEO Al Monaco said in an in­ter­view Thurs­day af­ter the com­pany an­nounced Poloz would join the Cal­gary-based com­pany’s board of direc­tors.

Poloz, who spent most of his ca­reer at the Bank of Canada, briefly left for two years to run the Ex­port Devel­op­ment of Canada, be­fore re­turn­ing to take the helm of the cen­tral bank in 2013.

Cal­gary ex­ec­u­tives and an­a­lysts said the ap­point­ment gives the en­ergy in­fra­struc­ture com­pany ex­per­tise and in­sight into in­ter­est rate pol­icy and, po­ten­tially, pol­icy views in­side the fed­eral gov­ern­ment. Many ex­ec­u­tives in the oil­patch feel the in­dus­try has been ig­nored in re­cent years in the cap­i­tal.

Poloz likely made a few friends in the oil­patch af­ter he moved swiftly in January 2015, with a sur­prise in­ter­est rate cut to sup­port the sec­tor amid plung­ing oil prices and a re­ces­sion in oil-pro­duc­ing prov­inces of Al­berta, Saskatchew­an and New­found­land and Labrador.

Monaco said in­ter­est rates, cap­i­tal mar­kets and global fi­nan­cial in­sti­tu­tions are ar­eas where Poloz’s ap­point­ment will help the com­pany, but the for­mer gover­nor’s broader ex­pe­ri­ence and his de­ci­sion-mak­ing abil­ity on a range of com­plex top­ics will be es­pe­cially ben­e­fi­cial.

“It’s a much broader in­sights and skills that he brings to the ta­ble. So it’s not specif­i­cally for (in­ter­est rates) but his knowl­edge gen­er­ally around global as­pects of the en­ergy mar­ket, cap­i­tal mar­kets is go­ing to be very help­ful,” Monaco said.

Poloz has ex­ten­sive busi­ness and fi­nan­cial ex­pe­ri­ence, as well as ex­per­tise in global eco­nomics and pub­lic pol­icy, Enbridge chair­per­son Greg Ebel said in a com­pany re­lease. “He will be an ex­cel­lent ad­di­tion to our board and we look for­ward to his con­tri­bu­tions.”

There will be some re­stric­tions on Poloz, as a for­mer civil ser­vant, con­tact­ing or lob­by­ing de­ci­sion-mak­ers he may know in the fed­eral gov­ern­ment. So hopes in­side the oil­patch of bet­ter access to halls of power in Ot­tawa are un­likely to come to fruition, said one ob­server.

How­ever, his con­tacts at ev­ery ma­jor bank on Bay Street and many in­ter­na­tional banks give Enbridge an edge, said Jack Mintz, the pres­i­dent’s fel­low at the Univer­sity of Cal­gary School of Pub­lic Pol­icy and a long­time di­rec­tor on the board at Im­pe­rial Oil Ltd.

“I think it’s a great state­ment for the en­ergy in­dus­try that the for­mer gover­nor of the Bank of Canada will be as­so­ci­ated with oil and gas,” Mintz said, call­ing the news a “first-class ap­point­ment” for the com­pany.

The big­ger ad­van­tage to Enbridge, which holds $63.5 bil­lion in long-term debt, will be Poloz’s in­sight into how the new Bank of Canada gover­nor Tiff Mack­lem in­tends to weave cli­mate change con­sid­er­a­tions into fu­ture pol­icy, Stifel Firsten­ergy an­a­lyst Ian Gillies said.

“If you think about Tiff’s ap­point­ment and you think about how he’s talking about in­cor­po­rat­ing cli­mate change into de­ci­sions, I think Poloz might bring a re­ally in­ter­est­ing view on how that might af­fect Enbridge,” Gillies said.

More broadly, Poloz will be able to help Enbridge un­der­stand the fi­nan­cial mar­kets’ increasing fo­cus on en­vi­ron­men­tal, so­cial and gov­er­nance (ESG) in­vest­ing.

“You’re starting to see cen­tral banks weigh in and be very, very fo­cused on sus­tain­able in­vest­ing and ESG re­port­ing. You’re starting to see trends in that re­gard in Ger­many and Spain and other coun­tries,” said Adam Legge, pres­i­dent and CEO of the Busi­ness Coun­cil of Al­berta.

“To have some­one who can pro­vide in­sight in terms of what’s hap­pen­ing at global cen­tral banks will be hugely ben­e­fi­cial,” Legge said.

It’s a much broader in­sights and skills that he brings to the ta­ble . ... his knowl­edge gen­er­ally around global as­pects of the en­ergy mar­ket, cap­i­tal mar­kets is go­ing to be very help­ful.

JUSTIN TANG/THE CANA­DIAN PRESS

Cal­gary ex­ec­u­tives and an­a­lysts say Enbridge’s board ap­point­ment of for­mer Bank of Canada gover­nor Stephen Poloz gives the en­ergy in­fra­struc­ture com­pany ex­per­tise and in­sight into in­ter­est rate pol­icy and, po­ten­tially, pol­icy views in­side the fed­eral gov­ern­ment.

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