Montreal-based TFI International Inc. is reversing plans to re-domicile from Canada to the United States just a few days after announcing its intention to move.

Last week, TFI surprised investors by unveiling plans to change its legal headquarters to the U.S., raising the ire of a major shareholder, the Caisse de Depot et Placement du Quebec (CDPQ), which said in a statement that it would make its “dissatisfaction” known.

On Monday afternoon, TFI reversed course.

“Based on feedback from shareholders received to date, TFI International will remain a Canadian corporation and will not pursue its previously-announced intention to re-domicile from Canada to the United States,” the transport and logistics company said in a press release.

Robert Yalden, the inaugural holder of the Stephen Sigurdson professorship in corporate law and finance at the Faculty of Law of Queen’s University, said he was surprised that TFI had announced the move before speaking to shareholders, such as CDPQ, which has a four per cent stake in the company.

CDPQ is particularly sensitive, he said, because it has a mandate of promoting business in Quebec and has a well-established history of pushing to keep head offices in the province.

For example, when American private equity firm TPG bought a majority stake in Cirque du Soleil in 2015, Yalden said the CDPQ took a firm stance calling for the entertainment company’s international headquarters to remain in Montreal. In 2013, CDPQ was also involved in the decision that Atrium Innovations Inc. kept its headquarters in Quebec when it was acquired by global investing firm Permira Holdings Limited and a group of Quebec investors.

TFI’s decision to redomicile would likely have drawn a reaction even without the wave of patriotism surging through the country in reaction to the threat of tariffs from the United States, Yalden said.

“This conversation has been going on in Quebec for a long time,” he said. “The Caisse would have reacted like this no matter what.”

Richard Leblanc, professor of governance, law and ethics at York University, said that a company would typically consult their major investors before making any significant transactions or moves.

Although TFI attributed its initial plans to move to the U.S. to its larger American shareholder base and the fact that 70 per cent of its operations are now south of the border, Leblanc said it’s important to note that one shareholder doesn’t receive more precedence over another.

He said this is “a teachable moment” for many Canadian companies.

“I think what has been shown with the reversal of this company, is that you don’t want to come out of the gate prematurely and commit to a particular course of action … before the politics have played out.”

While U.S. President Donald Trump said Monday he will be moving forward with 25 per cent tariffs on most imports from Canada next week, Leblanc said he expects the federal government will provide aid packages to support Canadian industries and companies.

A recent report from Desjardins projected that the provinces collectively have the fiscal capacity to deploy about $100 billion to subsidize industries and individuals impacted by the tariffs.

Leblanc said that it’s possible any potential aid could be contingent on companies honouring their contracts with clients, employees and other groups — and remaining in Canada.

“The reputational risk profile for companies has changed because of what is occurring in public order,” he added, explaining that companies that are viewed as succumbing to the interests of Trump risk damaging their reputations amid the “Buy Canada” movement.

• Email: slouis@postmedia.com

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