NDP worried about future of Nutrien jobs

Another prominent Saskatchewan politician is joining Premier Brad Wall in raising concerns about whether Nutrien Ltd., the company formed this week in a multibillion-dollar fertilizer industry merger, will keep existing corporate office jobs in the province.

Saskatchewan NDP interim leader Nicole Sarauer said it is “very, very concerning” that the company, which began trading on stock exchanges in Toronto and New York on Tuesday, has not gone far enough to provide those assurances.

“We’ve heard very little about what’s going to happen to those Saskatchewan jobs, and we’ve heard little reassurance that those jobs are going to stay in Saskatchewan over the long term,” Sarauer said in a telephone interview.

Nutrien was formally created on Jan. 1, about 15 months after Saskatoon-based Potash Corp. of Saskatchewan Inc. and Agrium Inc., which was headquartered in Calgary, announced plans to merge in the face of “fierce” market conditions.

The new company — which gained $4.55 to close at $69 on the TSX on Tuesday — has about 20,000 employees, owns and operates six of Saskatchewan’s 10 potash mines, runs more than 1,500 agricultural supply retail centres and has operations in 14 countries.

PotashCorp and Agrium previously committed to maintaining “significant corporate offices, post-merger” in Saskatoon and Calgary, with senior managers in both cities.

Nutrien president and CEO Chuck Magro will live in Calgary and have a secondary home in Saskatoon.

Richard Downey, Nutrien’s vicepresident of investor relations, said in an email on Tuesday that while precise numbers are not available, the company “does expect to maintain or enhance the number of corporate office positions in Saskatchewan, thereby ensuring a vital and vibrant Saskatoon office.”

More details will be available when the company rolls out its “people plan,” which it expects to do later in the first quarter, Downey added.

Wall in September said Magro’s decision to remain in Calgary was “not optimal,” and that he expects Nutrien to honour PotashCorp’s pledge — made in 2011, after BHP Billiton’s failed hostile takeover bid — to maintain “a strong and vital corporate headquarters” in the province.

The outgoing premier subsequently said he would not rule out using legislation, the province’s potash royalty regime or incentives offered to potash mining firms with head offices in the province to maximize the number of corporate jobs in Saskatchewan.

“Touching base with Premier Wall, the Government of Saskatchewan is cautiously optimistic about what this means for new jobs in Saskatchewan and we should have something further to say later this week,” government spokeswoman Trelle Kolojay said in an email.

Sarauer said Wall and the Saskatchewan Party government should have done more to extract a guarantee from the company, but acknowledged that she shares the premier’s concern about a province already weakened by soft natural resource prices losing more jobs.

“We want to be able to reap the benefit of that resource (potash) as much as possible, and one of those benefits is having those head-office jobs … We need to see commitment from the company, but also not a short-term commitment but a long-term commitment,” she said.

Brooke Dobni, who teaches business strategy at the University of Saskatchewan’s Edwards School of Business, said the merger will make Nutrien more competitive and diversified, meaning it is better able to withstand market pressures than its constituent parts.

But while the new company is much larger than PotashCorp was, Dobni continued, Nutrien is likely cognizant of the political issues at play and has good reasons for wanting to maintain a strong presence in Saskatchewan.

“They can’t abandon the province, because this is where the potash is, and they need to keep that in mind. They still have to maintain good relations with the government because the royalty arrangements are constantly being looked at and negotiated,” he said.

PotashCorp was formed as a Crown corporation in 1975 and privatized 14 years later; it concentrated on nutrient production and sales, while 87-year-old Agrium developed a sprawling agricultural product distribution network in addition to its nutrient wholesale business.

The companies confirmed merger talks were underway in August 2016. The following month, Jochen Tilk — who was then president and CEO of PotashCorp — told Postmedia News the deal was about taking control in a more competitive market.

“You can either sit and wait (and see) whether or not the storm passes around you, or you look how you can be more competitive in that environment,” he said. “One basically suggests you surrender control. The other is you take control.”