'Cool' Canada sheds its frosty reputation: Canada is no longer considered a lonely outpost by foreign executives

Veteran Texas oilman Jim Houck was looking for more than a fat pay cheque when he landed the top job at Western Oil Sands Inc.

Mr. Houck, who is spearheading Western's controversial strategy to explore for oil in war-torn Iraq, says he was attracted to the "entrepreneurial spirit" at the energy firm.

And he was also intrigued by what he describes as "the business development challenges" associated with the Calgary-based company's interest in the lucrative Athabasca Oil Sands Project in Alberta.

"It's exciting . . . to be part of a historic time in energy history," says the 58-year-old American who got the nod last year as Western's president and chief executive officer.

More and more foreign-born executives are moving into the corner offices of Corporate Canada. A lack of available talent in certain sectors, a stronger currency and globalization are fueling the trend to hiring bosses from abroad, executive recruiters say.

Many are Americans, such as Mike Zafirovski, CEO of Nortel Networks Corp., and Rodney Mott, CEO at Stelco Inc. Others, such as German-born Jurgen Schreiber, president of Shoppers Drug Mart Corp., and Irish-born Brian Dunne, chief operating officer of ACE Aviation Holdings Inc., have come from across the ocean. "Over the last few years, virtually Nortel's entire management team has changed, and a large portion of it is non-Canadian, including at the top," says recruiter Jay Rosenzweig of Rosenzweig & Co.

Mr. Zafirovski, who was hired as Nortel's CEO last year to try to turnaround the embattled company, has even highlighted his foreigner status. At his welcoming press conference, he told reporters that he was preparing for his job by reading A Little History of Canada, a small red book he was carrying.

"Canada is seen as cool," says J. Robert Swidler, managing partner for Canada at search firm Egon Zehnder International Inc. "It's on the radar screen for top executives, whereas it never used to be."

In Alberta's oil patch, companies are sometimes forced to recruit from outside the country because of the lack of available talent or because potential candidates are not willing to jump ship.

"You have to go where the talent is," says Bob Sutton, managing director in Calgary of Korn/Ferry International.

Mr. Houck, who moved with his wife to Calgary from Houston, spent 35 years in the energy sector in the U.S. Most of that time, he was an executive with ChevronTexaco Corp. and its Texaco predecessor before the merger. More recently, he was principal of FrontStreet Partners, a U.S.-based private equity firm investing in the energy related assets. That's when he was headhunted for the Western Oil CEO job.

The Canadian energy industry has also been recruiting internationally because some qualified top executives here have been reluctant to quit their jobs because of their lucrative unvested stock options, Mr. Sutton says.

"The golden handcuffs are well in place," he says. "But that is becoming less of an issue as the huge upswing in energy industry stock prices . . . is cooling off."

In Quebec, language law requiring students to attend French schools has made it tough for companies to recruit foreign executives. But that situation changed somewhat after the Liberals wrestled power away from the Parti Québécois in 2003, Mr. Swidler says.

"The legislation hasn't changed, but the government seems to be allowing for more exceptions" for the children of certain managers, he says. "It's mostly senior executives whose appointments are considered to be more crucial to a company's performance."

Relaxation of the language law has likely helped Montreal-based ACE Aviation and its unit, Air Canada, lure senior executives from abroad, Mr. Swidler suggests.

Canada's strengthening dollar, which has risen to about the 88-cent (U.S.) level, is also making it easier to court foreign executives.

"Most people want to be at least kept whole," says Jeffrey Rosin, managing director for Canada at executive search firm Korn/Ferry International. "There is not as much of a differential between what folks earn elsewhere and here." And it is not as prohibitive for Canadian companies to pay a premium to make up the differential in currency and higher domestic taxes compared with a few years ago, with a 65-cent dollar, Mr. Rosin adds.

Without financial barriers, he says that foreigners may also consider Canada because of the opportunity to become head honcho of a company, instead of just running a business unit at a multinational.

Western's Mr. Houck, for instance, was president of Chevron Texaco's power and gasification unit before it was sold in 2003. The opportunity to run "a publicly traded company with tremendous growth potential" is appealing, he admits. Canada has been gaining more allure as technology, through the Internet, allows foreign executives to stay connected with the rest of the world, and more domestic companies join the global economy through trade and expansion, Mr. Swidler adds.

"Canada used to be considered an outpost," he says. "Executives were afraid that, if their position didn't work out, they would be marooned here, and wouldn't be able to re-integrate themselves globally and find another position."

With greater global presence, companies realized they should also look around the world for talent.

"We have gotten assignments in which a Canadian company has said it is not prepared to consider anybody in Canada," Mr. Swidler says. "They want somebody who has a fresh outlook on things.

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