The possibility of a Texas energy company buying a Burnaby, B.C., fuel refinery has workers and energy observers concerned, given Canada’s trade fight with the United States.
Sunoco, headquartered in Dallas, has offered $9.1 billion US for Calgary-based Parkland Corporation.
Parkland owns a refinery in Burnaby, along with gas stations and a fuel distribution arm.
Unifor, which represents about 150 workers at the Burnaby refinery, says it has serious concerns about the deal, since it would be akin to handing control of “critical energy infrastructure to a foreign multinational” during a trade war.
The union says the federal and provincial governments need to put binding commitments in place “to protect jobs and preserve the refinery’s operations,” since it produces about a third of the region’s gasoline and jet fuel.
“Obviously, if this were to disappear, the jobs would go, and the ability to supply the region with finished fuels would disappear as well,” said Russ Day, president of Unifor Local 601, standing outside the plant gate.
“That would put us in the hands of external refiners who may not have the same interest in this market.”
Parkland executive chairman Michael Jennings said in a statement that Sunoco has committed to safeguarding Canadian jobs and retaining the Calgary head office.
Are tariffs lowering Parkland’s price?
Still, some who follow the energy business are asking questions about the proposal, especially in light of the discord over trade between Canada and the U.S.
“I think that tariffs have the potential to reduce the value of Canadian companies,” said Jotham Peters with Navius Research, which consults on climate and energy policy.
“[Tariffs] add a lot of uncertainty in our markets and … perhaps make our companies a little bit easier to acquire.
“I’m concerned about a U.S. company coming in and buying a Canadian company, in part because I don’t actually know the extent to which tariffs are potentially reducing the valuation.”
Likewise, University of British Columbia research and post-doc fellow Philip Solimine expressed “surprise” that a deal like this is being considered with trade uncertainty afoot.
“A purchase of this scale seems like it could be a potentially useful bargaining chip in trade negotiations,” Solimine wrote in an email. “This is particularly true given the increased strategic importance of refineries to the Canadian economy.”
Federal review still required
B.C. Energy and Climate Solutions Minister Adrian Dix said in a statement said his ministry was aware of the merger talks and that Parkland and Sunoco have an agreement to continue operations in Canada.
“We value our relationship with Parkland, and they are a key player in B.C.’s economy and also contribute to the production of renewable fuels in our province. Our key priority is to keep the refinery operating,” an email from Dix read.
“We are planning on meeting with Parkland, Sunoco to discuss future plans later in May. We will also be meeting with Unifor to discuss their concerns.”
Since the deal involves a U.S. buyer, it is subject to approval under the Investment Canada Act, which reviews large-scale acquisitions of Canadian companies by foreign buyers.
CBC asked the federal government for comment, but had not received a response by deadline.
Parkland shareholders are set to vote on the deal on June 24.
