BUSINESS WATCH

Bill Hopper’s blunt and telling prescription

‘These Reformers scare the hell out of me. I worry about religious fundamentalism of any kind. There are a lot of cuckoos in that party.’

Peter C. Newman February 17 1992
BUSINESS WATCH

Bill Hopper’s blunt and telling prescription

‘These Reformers scare the hell out of me. I worry about religious fundamentalism of any kind. There are a lot of cuckoos in that party.’

Peter C. Newman February 17 1992

Bill Hopper’s blunt and telling prescription

‘These Reformers scare the hell out of me. I worry about religious fundamentalism of any kind. There are a lot of cuckoos in that party. ’

BUSINESS WATCH

PETER C. NEWMAN

There’s no more outspoken character in the Oil Patch—which has now become a killing field—than Petro-Canada chairman Bill Hopper, and he’s hopping mad about everything from energy prices to Ottawa’s constitutional circus.

“We came out of 1990 in fairly good shape,” he told me during a recent Calgary interview. “What shocked the oil companies the following year was that crude prices dropped $10 a barrel a day or two after the Gulf War started. So we took a bath of more than $300 million, as did Imperial and Shell. Add to that the impact of the recession, and I think that if our privatization last July had been delayed by a month or two, it probably wouldn’t have happened. Our shares are substantially below their issue price [they’ve dropped from $13 to $10], but we have fundamentally sound assets and earnings capacity. Nobody promised our shareholders fast profits. This is a growth company.”

A steep decline in earnings in 1991 forced the Crown corporation (Ottawa still owns 80 per cent of the equity) to close one-third of its 3,200 gas stations, cut back its capital expenditures and mothball at least one of its refineries. “We’ve come to realize that the demand growth for gasoline will be less than we anticipated,” Hopper acknowledges, “so we now have too much refining and delivery capacity. We own one of the country’s lowest-cost refineries, in Edmonton, but only if it’s operated at full capacity. At 70-per-cent throughput, it’s a high-cost proposition. So we plan to satisfy more of our demands from that plant and shut down some of our smaller units.”

The Petro-Canada chairman points out that crude-oil price levels these days are about the same as they were in 1972, while production costs have at least quadrupled in the same period. “Every year, labor says that they need another fouror five-per-cent increase. Well, you can’t sustain all of those higher costs. Eventually, you’re out of business,” he warns. He is determined not to increase the company’s $2-billion debt load and has cut back all

frontier exploration, although some development work continues on Hibernia, off Newfoundland. Hopper is trying to sell part of his Hibernia holding, not because he doesn’t believe in the project, but because he feels that it has pushed too many Petrocan assets into one basket. Hibernia exploitation takes up nearly one-third of the company’s capital budget.

Like most Calgarians, Hopper is vitally concerned about Canada’s future, but unlike many of his oil industry colleagues, he’s not attracted to the Reform party. “These right-wing Reformers scare the hell out of me,” he says. “I worry about religious fundamentalism of any kind. I’m equally opposed to hard-line Catholicism, the Zionists, from time to time, and certainly the Moslem movement. I used to live in Algeria, where the Moslem fundamentalists started ripping the constitution apart, putting in religious laws, and the country went down a rat hole. Nobody wants to invest in it.”

Hopper continues: “Preston Manning doesn’t make that side of him very apparent, but as soon as he comes more into the limelight, all the warts are going to be apparent. There are a lot of cuckoos in that party. We’ve got fascist camps and all sorts of people in this province who would tend to gravitate in his

direction. I’m not saying that they’re Reformers, but if these people align themselves to any party, they would see more commonality there, and that’s kind of scary.”

It’s when he contemplates Ottawa’s constitutional package that Hopper gets really excited. “It’s pathetic to think that in Aylmer, Que., they had to tear up a sidewalk because somebody discovered that they had used Ontario bricks,” he says. “I mean, that’s just insane. That’s why I favor the federal economic-union proposals on bringing down interprovincial trade barriers. Can you imagine some guy in Midland, Texas, saying, ‘Hey, you can’t do this, you’re from Oklahoma!’ You can’t run a country that way. I’m prepared to give on cultural things all over the place, but let’s at least get the economic union thing together.

“When we used to run rigs off the East Coast and move one to Newfoundland, some guy from the Rock would say, ‘OK, how many Newfoundlanders you got on today?’ And I’d tell them we just got on location a day ago, and we had 82 Upper Canadians, 62 Nova Scotians and seven Newfoundlanders. They’d make us take the Nova Scotians ashore and replace them with locals, regardless of safety, training or anything else. That couldn’t happen in any selfrespecting country.”

Hopper’s idea of granting Quebec distinct society status leaves little room to argue. “If Quebec wants to have its own language and even language laws, however angry people out West get about it, what does it really count?” he contends. “Even Quebec businessmen are now saying, ‘We ought to get rid of those silly French signs.’ ”

He is puzzled about Quebec’s insistence on controlling immigration because he believes that most of those who come to Montreal leave for Toronto after they’ve made a few bucks. “I’ve never understood how Quebec can solve its language problem,” he says, “by buttressing their low birthrate with francophones from Haiti, West Africa and such places. I’ve asked serious people in Quebec, ‘Are the immigrants you bring in from Senegal or Gabon culturally closer to you than somebody from Toronto, just because they speak French?’ They look at me as if I were a racist, which, of course, I’m not. I know that these people are wonderful, but they’re not attuned to North America.”

Hopper has enough hobbyhorses to fill a large stable, but one of his favorites is the abuse of unemployment insurance. “My son is married to a Newfoundland girl, and I spent Christmas down there,” says Hopper. “I was introduced to the 10-42 system. I was in a small outport with a fish-processing plant whose owner knows everybody in town. He hires 10 people at the beginning of January and they work for 10 weeks. Then, he gets rid of them, and for the next 42 weeks they collect unemployment insurance. Meanwhile, he signs up another 10, and so on, until everybody in town gets the required stint. When the government moved the qualifying period to 12 weeks, there were eight guys too many in town. Everybody got so upset, you’d think we were going to war or something.” Hopper says you can’t run a country that way—and he’s right.