Canadian giants turn tables on US investment northward
While the Trudeau government plans new control measures over foreigh -- mainly US -- companies in Canada, a record number of Canadian-owned companies and banks are invading US industries.
The corporate moves into the United States have become so substantial that the arrival of perhaps 300 Canadian companies, from real estate conglomerates and chartered banks to yacht builders and pulp novel publishers, is large enough to place Canada in line as the third-largest foreign investor in the American economy.
Only Britain and West Germany outpace the corporate Canadians who are moving south, with an estimated total investment of about $20 billion by the end of 1980.
Given the proposed new nationalistic measures by the Canadian government to restrict the historic trend of American companies moving in on Canadian industries, the big shifts in the opposite direction suggest a plan for purposely reversing the trend.
But there is no such plan. Economics, not politics, has brought about the moves south, which show no sign of slowing down.
Like the thousands of US companies that have established branch plants in Canada since the war, the Canadian newcomers to the US see their moves as profitable extensions of domestic success.
Except in the Canadian instances, these are now strong enough to move from the smaller to the larger of the two North American industrial systems.
Among the largest Canadian real estate companies and chartered banks that lead the pack are the Royal Bank and Cadillac Fairview Corporation Ltd., which is already in at least half a dozen major American cities. It recently bought a 70 percent interest in 4,200 Atlanta-area apartments.
As the world's seventh- largest bank, it has invested an additional $100 million in its New York trust bank.
Other Canadian arrivals include the Royal Trust Bank Corporation, the wholly owned subsidiary of Toronto's Royal Trustco Ltd., which has bought or opened seven Florida branches; and seven Vancouver and Toronto-based cable-TV companies that are competing for outlets in such widespread cities as Seattle; Fresno, Calif.; Minneapolis; Syracuse, N.Y.; and Clearwater, Fla.
People's Jewelers Ltd., Canada's largest jewelry retailer, plans to open 45 stores in the United States. And Shoppers Drug Marts, a successful Canadian drugstore chain that operates mainly in shopping centers has 28 outlets in the US. It plans to add 200 more American branches.
The full scope of this commercial invasion from the north is not known in dollars and cents, since some Canadian concerns with major US ownership of their assets transfer much of their money to third nations such as the Bahamas, Bermuda, and Switzerland.
The Canadians do occasionally find problems in their US business invasion. In Oklahoma last year, state Attorney General Jan Eric Cartwright declared that the state's constitution prohibited nonresident aliens from owning metropolitan real estate in Oklahoma City.
This was a clear reference to the estimated $60 million of Oklahoma City property purchased by Hillcrest Investments Ltd., based in Calgary, Alberta. The same kind of restrictive legislation is being passed against local ownership of land by foreign land companies in such Canadian provinces as Ontario, Prince Edward Island, and Nova Scotia.
But most Canadian corporate arrivals aren't this trend spreading in the US. Dexter Lindberg, vice-president of the San Francisco-based Genstar Homes Ltd., another Canadian company, applied some humor and a little bit of sweet revenge to the Canadian corporate invasion.
Speaking to a recent North American construction industry seminar in Toronto, he suggested that Canadian developers had already bough back "practically everything England lost during the American Revolution."
Could he also have meant the American loyalists who fled during that event to a then-barren Canada, losing fine Colonial homes and rich farmlands? Their descendants are the same people whose Yankee drive gave birth to many modern Canadian companies.