There was Sun Life. Then the Royal Bank, Canadian Pacific and Bell Canada. Could Saputo be added to this list of large companies that have deflated their head office in Montreal?
Posted at 6:30 a.m.
This is what fears the detailed report of my colleague Julien Arsenault. Of Saputo’s six top executives, two now work in Florida and three others have a condo there and spend a lot of time there.
Imagine, even the Deputy CEO, Lino Saputo junior, moved to Florida since the opening of the Miami office in June 2021, and she works there full time! And all these beautiful people have been paid in American dollars for a year.
Florida has taken on such importance that it would be the meeting place for international Saputo executives from Australia, the United Kingdom, Canada, the United States and Argentina.
As for the Canadian dairy division, its main manager moved from Quebec to Ontario two years ago, even though Quebec has a large proportion of Canadian factories.
Isn’t that worrying? A multinational is well advised to have administrative offices in its main markets, of course. Often, these offices are found near factories or customers, as was the case with Bombardier in Germany before the Montreal company sold its train division.
But as a general rule, strategic positions are located in a centralized head office. General management, finance, human resources and legal and corporate affairs are ultimately located in this single decision-making headquarters. In addition, major strategic meetings take place there, although teleworking has changed practices.
These local head offices are essential for the vitality of a metropolis, it is well known. They bring together high-level jobs, in addition to offering contracts to the local network of lawyers, accountants, publicists and other consultants, to which are added donations to the community.
Saputo has 39% of its employees in the United States, but the choice of Florida does not seem motivated by the proximity of its dairy plants, which are mainly in Wisconsin. With its climate, it must be said, Florida is the darling of snowbirds Quebecers, and Saputo Quebec executives are no different from the rest of the population, many having a condo there.
In addition to the sun, Florida has another great advantage for any company that wants to establish itself there: the low personal income tax. The top marginal rate taxed on income is 37% in Florida, compared to 53.3% in Quebec. And again, the maximum is imposed only from $628,300 of income in Florida, against $216,500 in Quebec. Talk to hockey players…
Saputo denies abandoning Montreal for Miami. The multinational cheese company says in an email that “most members of its corporate management team reside in Quebec” and indicated in its June circular that 300 employees work at the Montreal headquarters.
“Donations and sponsorships in Quebec (4.4 million), where our historical roots extend, represent approximately 54% of our donations worldwide,” the company specified in this circular.
Lino Saputo Jr. is also one of the co-chairs of this fundraising campaign for Concordia University, I noticed.
In addition, might I add, Saputo’s 11-member Board of Directors includes 6 directors from Quebec, 4 from the rest of Canada and 1 from the United States.
In short, Saputo is not yet American.
Why worry then? Because once the movement towards Florida is well underway, it will become difficult to slow it down. Montreal is favored neither by the climate, nor by taxes, nor by the recent law 96, which obliges foreigners to learn French in six months.
Bell Canada (BCE) is an eloquent example of this slow erosion of a decision-making center in Montreal. The company still has, officially, its head office here, more precisely in L’Île-des-Sœurs. But only one of its leaders has his main residence in Quebec; the others are in Toronto, basically.
See the evolution. In 1997, 9 of Bell’s 10 most senior executives resided in Quebec. This proportion had melted to 3 out of 13 in 2011 and today, Bell has only one of its 13 senior executives in Quebec. In short, in 25 years, Bell’s decision-making headquarters have moved from Montreal to Toronto.
Saputo, it is true, does not have the same profile as Bell or the Royal Bank. It has a controlling shareholder with a strong presence in Montreal and a Quebec management. But when a company of this size –4e Quebec company in importance on the Stock Exchange in terms of income – eyeing the outside, it is necessary to worry about it.
