Why Alberta politicians hope a takeover bid of Calgary's Shaw will be an economic win

The headquarters belonging to Shaw Communications practically screams Calgary and Alberta.

Located a short distance from the Bow River, it has an exterior reminiscent ofthe city's oldest sandstone structures and a large, steel sculpture of a bison erected outside its doors.

The company has also beena fixture on the city's business landscape for years, becomingone of the province's flagship corporations. It employs 3,250 Albertans, including 2,670 in Calgary.

So when Toronto-based Rogers Communications announcedits plans on Monday for a $26 billion takeover of the business, one might expect some trepidation.

And inside the offices atShaw Court, there could well be some anxious staff.

But from the premier's office to city hall, Albertapoliticians were welcoming the news just hours after the announcement, banking on some big promises from the bosses at both companies.

The list of commitments includes keeping the western head office of the combined business at its current location in Calgary, where thepresident of western operations would also be based.

Rogers alsosaid it would put$2.5 billion into building a 5G network in Western Canada, with new technology and network investments creatingup to 3,000 net new jobs across Alberta, British Columbia, Manitoba and Saskatchewan.

Premier Jason Kenney and Calgary Mayor Naheed Nenshigot the pitch a day earlier.

Both said they spoke with Joe Natale, president and CEO of Rogers,on Sunday to discuss the massive deal, with neither company apparently wanting to catch the politicians flat footed with the news.

Kenney acknowledged that the proposed merger would have "significant implications" for the province's economy, but he spoke of the positive commitments Natale made aboutincreased jobs, service and investment in Alberta.

WATCH | Alberta premier touts job creation in Rogers-Shaw deal:

Alberta's premier touts job creation in Rogers-Shaw deal

3 years ago

Duration 2:21

Jason Kenney says the merger comes with "strong and public commitments" to jobs for Alberta.

"We would hold Rogers to those commitments as they would be good news for Alberta's economy," he said."The plan outlined by Rogers and Shaw would make significant net job growth in Alberta, especially in high-paying high-tech jobs."

For his part, Nenshi sounded a little more cautious, saying the deal has the potential to be a transformative investment in the city, particularly in its tech and communications sectors. But he said the devil is in the details.

"I had the opportunity last night to speak with the CEOof Rogers at some length about what is happening and pointed out to him quite clearly that while we welcome this enormous investment in Calgary, Shaw is also our largest, non oil-and-gas head office," Nenshi said.

"It is also the largest employer of engineers in Calgary. And so it's important to us that there be a net benefit for Calgary here not just in front-line jobs and capital investment, but also in downtown jobs."

That's key for the city, because the last few years have been undeniably rough for Calgary's downtown, with the office towers in the once-bustling core emptying out as the downturn in the oil and gas sector dragged on.

Nenshi said the RogersCEOmade it clear that his goal was not that this become a"giant sucking sound out of Albertabut rather that it work in the reverse direction."

"Certainly, I will be looking for a little more detail on that, a little more assurance on what that will look like going forward," the mayor said.

If Nenshiwere to askPatrick Horan about what it might mean for jobs, he might hear something a little different. When asked about potential job gains resulting from the deal, the portfolio manager at Agilith Capital Inc. said he's"skeptical."

"There is no official audit, sort of post-mortem, on these things," Horantold CBC News.

"No one really does the true count on this."

Similarly, longtime telecom industry watcher and journalist Greg O'Brien told CBC'sThe Calgary Eyeopener on Monday that there are always job losses attached to these kinds of deals.

"The job creation may come later in the future, but there are duplications," O'Brien said, adding that merged corporationsdon'tneed two finance departments, for example.

"But what they will need is... technicians on the ground, customer service reps, things like that.So they're going to retain thousands of employees, obviously. But there will belayoffs when they find the duplication."

People probably won't know exactly what those implications may be for a yearor more, as thedeal isn't expected to close until the first half of 2022. It still has many hurdles to clear, including a review by the federal Competition Bureau, the Canadian Radio-television and Telecommunications Commission and the federal government.

The province and the citycould use an economic win. Its leaders will hope this is one.