U.K. vote closes European gateway

Canadian-based businesses bracing for economic fallout of surprising referendum

Canadian companies and workers in the U.K. woke up Friday facing unexpected decisions about their future in a country that voted to close its gateway to the rest of Europe.

Canadian firms with offices and investments in the U.K. saw their stocks fall Friday amid a bloody global market mess in reaction to Britain’s decision to leave the European Union, an outcome that took many by surprise.

“Our members are surprised, as is the country as a whole, and people are reflecting on what it means for their firms in particular,” said William Swords, president of the Canada-U.K. Chamber of Commerce. “This is uncharted territory for everyone.”

The U.K., a popular hub for North American corporations that serves as a gateway to European trade, must now reassure multinationals that the country remains open to trade and that skilled workers will be able to stay, he said. Britain is Canada’s fifthlargest trading partner, accounting for about $21.2 billion in trade. Although it’s too early to gauge the full global trade ramifications, Canadian businesses are debating the merits of relocation, Swords added. Canadians who work and live in the U.K. are similarly concerned about their future prospects if global multinationals decide to pull out.

“A lot of expats are feeling very uncertain about what our future holds,” said 30-year-old Nancy Hitzig, a Canadian who moved across the pond in 2013.

Hitzig, who voted to “Bremain,” now works in fundraising for the City of London Sinfonia and is worried that the arts sector will suffer if corporate donors leave, putting her job at risk. Those most exposed Canadian businesses include Brookfield Asset Management, aircraft simulator CAE Inc., train maker Bombardier Inc., Great-West Lifeco and the Canada Pension Plan Investment Board (CPPIB).

Brookfield, which has a large exposure with investments in London’s Canary Wharf, said it remains “confident that the U.K. will continue to attract international capital and be one of the leading business centres in the world.”

Bombardier, which has aerospace operations in Ireland, said it “will continue to work with the government and other industry stakeholders to create the necessary business environment to ensure our future success.”

The CPPIB, which has infrastructure investments across the U.K., said it expected the results of the vote to have an immediate impact on markets, as well as its portfolio, but that it has an “exceptionally long investment horizon.”

While Canadian companies avoided publicly showing their political biases, some of America’s largest banks contributed hundreds of thousands of dollars to stop Britain from withdrawing.

Some suggested a Brexit would force them to move thousands of workers out of London, the headquarters for their European operations, which they used as a financial springboard to sell their services to the rest of Europe without having to get regulatory approval in each individual country. With files from Bloomberg