Canada

Odd man in

Robert Miller,GRAHAM FRASER July 25 1977
Canada

Odd man in

Robert Miller,GRAHAM FRASER July 25 1977

Odd man in

Canada

Robert Miller

“One thing that’s absolutely clear,” said

Sidney Robert (Bob) Blair, without even a trace of a smile, “is that we’ve beaten Arctic Gas, if that was the contest.” It was—to a point. Certainly Blair has won the first and most crucial pot in an eight-billiondollar pipeline poker game in which the ante alone had been roughly $180 million. Other hands remained to be dealt, principally in Ottawa and Washington, but by mid-month Blair and his western Canada associates looked like a near cinch to win the right to transport natural gas from Alaska to the energy-starved Lower 48. Should Blair take the remaining hands, as he clearly expects to, despite stiff opposition from an American rival, the consequences promised to be profound, for ordinary Canadians, for Canadian business and for Canada’s often-troubled relationship with its neighbor to the south.

Blair, president of the robust Alberta Gas Trunk Line Co. Ltd. (1976 profits $39 million, assets $945 million), is a 47-year-old Calgary businessman/dreamer who raises Herefords in the west and hackles in the east.

Relaxing in his luxurious 37th-floor office in Calgary’s Bow Valley Square, he did _ not look like someone who | had just vanquished the § pinstriped tycoons of Bay and Wall streets. For one thing, he was wearing blue jeans and a fancy shirt. For another, there was manure on his boots. For a third, his wire-wool hair was curried forward in a style that came perilously close to bangs. Even allowing for the fact that it was Stampede week in Calgary and that, judging by clothes alone, no one could tell the difference between the oilionaires and the Rexall cowboys, Blair presented an unlikely image for a man getting ready to raise and spend billions of dollars on the largest private construction project in history (current estimate: $8.6 billion).

But then. Blair is an unlikely fellow, a denim opportunist who knows his way around business boardrooms and political backrooms, a Prairie patriot who is appalled at the prospect of a separate Que-

bec, an ardent Canadian nationalist who wants to break the U.S. stranglehold on Canada’s economy but who wants to do his American neighbors a favor in the meantime, a wealthy man who worries about (and enjoys the company of) northern natives, an industrialist who catches himself wondering whether growth for growth’s sake, the prime ethic of industry as well as of the cancer cell, is in Canada’s best longterm interests. (See column page 41.) Most of all, though, Blair is a winner who wasn’t supposed to win against losers who weren't supposed to lose, a welterweight who knocked out a whole stable of heavyweights in the biggest business brawl Can-

ada has ever seen. The fact that his victims were his former partners, men he had worked with, made the fight all the more bitter and victory all the more sweet.

On July 4, the National Energy Board (NEB) stunned the Eastern Canadian business world by rejecting a proposal from a blue-ribbon but U.S.-dominated consortium known as Canadian Arctic Gas Pipeline Ltd. (CAGPL), which had spent five years and $140 million planning a naturalgas line down the Mackenzie Valley. Instead, the NEB gave conditional approval to a last-minute proposal from Blair’s Canadian-controlled Foothills Pipe Lines (Yukon) Ltd., owned jointly by Alberta Gas Trunk and British Columbia’s Westcoast Transmission Co. Ltd., that it build a pipeline along the Alaska Highway. The Foothills project, on which Blair had spent a comparatively modest $40 million (including investment on a now-shelved Mackenzie line of his own), would link up with a U.S.-owned pipeline to be built south through Alaska to the Yukon border and would also make use of existing facilities in Alberta and BC. Although Blair’s plan had a thrown-together. opportunistic look about it, the NEB decided it made more sense than the bigger but environmentally and socially less acceptable CAGPL scheme. That decision triggered shock waves that are still reverberating—in Calgary, Toronto, Ottawa, Washington, Houston, Chicago and New York. As Blair put it: “The decision has wrenched power away from some people who have become accustomed to having power. The big oil companies, for example, and certain parts of the Toronto financial establishment.” According to Blair, that power has shifted to Calgary, or will when the Alcan pipeline wins the expected endorsement of the Canadian government, parliament, President Jimmy Carter and the U.S. Congress. Canadian approval seemed certain and Carter’s nod seemed almost as sure. Congressional support for Foothills seemed to depend on how strong a case El

Paso Natural Gas of Houston could make against an overland Canadian route and in favor of its own proposal that gas from Prudhoe Bay be carried across Alaska along the new oil pipeline route to Valdez, where it would be liquefied and transshipped to Pacific ports in the lower states.

.The El Paso sales pitch in Washington is teyed to the fact that it is an all-American route and not reliant on foreigners. Its big drawback: El Paso gas would cost about 24 cents more per 1,000 cubic feet than Foothills’ would. Other hurdles the Blair plan faced: the hurried report, due August 1, from a panel under Dean Kenneth Lysyk of the University of British Columbia Law School (see accompanying box) on the implications of a pipeline along the Alaska Highway in the Yukon; modifying the original Foothills plan to conform with the NEB’S conditions and suggestions; and probable vigorous objections from a vocal but relatively small percentage of the Yukon’s 22,000 residents. Says Edwin C. Phillips, president of Westcoast Transmission:

“As an industry used to regulation, we don’t see anything coming up that frightens us.”

For CAGPL chairman William Wilder, president Vernon Horte and their colleagues, the future was considerably less rosy. After the initial shock of the NEB decision had worn off. Wilder sighed: “It has not been a good week.” But, he said, “we don’t see this thing as being over yet.” What would CAGPL do? “We have about four options. I'd say,” Wilder commented, refusing to amplify. “We’re going to think about it for a while and then decide.” He continued to be bitter, though, adding: “What is the point of having an energy board if you’re going to tell them what to do?” Whether in fact there was any political guidance extended to the NEB by the Liberal government seemed doubtful but CAGPL is convinced there was. “I told you it was a political decision,” Wilder said, “but how are you going to prove it?” Asked if he saw any chance for the CAGPL backers to recover a significant portion of the $140 million they spent. Wilder said simply: “No.”

Among the factors the NEB had to weigh: the delicate northern environment, including wildlife, and the likely effects of pipelines upon it; the rights and interests of northern residents, particularly Indians and Eskimos; the staggering economic impact of either project (CAGPL’S would have cost more than $10 billion); the long-term energy interests of Canada as well as the short-term needs of the United States, which is desperate for additional natural gas right now; the constantly changing estimates of potential reserves in Alberta and the Northwest Territories; and, inevitably if unofficially, the political acceptability of a decision either way, in the light of evershifting public opinion.

Probably the biggest single factor in the NEB decision was the report earlier this year by Mr. Justice Thomas Berger, a one-

ztime native rights lawyer who spent three years studying the impact of a Mackenzie Valley pipeline and who concluded with devastating bluntness that the route should not be used for at least a decade. Berger obviously damaged CAGPL’S case, although so powerful were the members of the consortium that until the actual decision came down most observers felt that CAGPL would still win (executives for the consortium even took a symbolic bottle of champagne into the room where the decision was announced). Among the members of CAGPL were Imperial Oil Ltd., Shell Canada Ltd., Gulf Oil Canada Ltd., T ransCanada PipeLines Ltd. and 11 other U.S. and Canadian firms representing billions of dollars in assets. Despite the power of his opponents, Blair says, he was confident of winning. After he’d won, he was angered to learn that Wilder, the former head of the powerful Bay Street brokerage house of Wood Gundy Ltd., had snapped that Blair and his associates were “neither competent nor capable of building it [the pipeline] themselves.” Blair retorted that the remark was “mean and petty” (there has been bad blood between him and Wilder ever since Blair pulled Alberta Gas Trunk out of CAGPL in 1974 “because I could see an impending corporate catastrophe”) and he said later: “The Bank of America says we can do it. First Boston Corp. says so. The Canadian Imperial Bank of Commerce, the Bank of Nova Scotia, Dominion Securities, Pitfield, Mackay, Ross... have been testifying that we can do it. And I know we can do it.”

Questions, of course, remain, including a major one: why should Canada build a pipeline at all, simply to move Alaska gas to U.S. markets? Critics of the Blair scheme suggest it does a lot for Blair and his associates but not very much for Canada. Although the NEB did rule that the Alaska Highway line be shifted farther east so a possible future connection could be made along the Dempster Highway route connecting Dawson City with the Mackenzie Delta (where, one day, presumably, Canadian gas will be exploited), there was no guarantee that such a spur would or even could be built.

To Blair’s executive vice-president, Robert Pierce, the answers are easy enough. “The United States needs that gas now, and we can help them,” Pierce says. “I would like to think that somewhere down the line this country will need some American cooperation and that they will remember how we helped them ...”

Why did Foothills win and CAGPL lose? “We were smaller and more flexible and we could make quick decisions,” says Kelly Gibson, a 65-year-old transplanted Oklahoman who recently retired as chairman of Westcoast Transmission but who remains chairman of Foothills (Blair is president and chief executive officer). That flexibility is the main reason Foothills prevailed, Gibson believes. The Foothills

proposal was constantly being modified by Gibson and Blair as conditions changed. Initially, they planned the so-called Maple Leaf Line, a Mackenzie Valley system designed to carry only Canadian gas. However, gas is being found in the Northwest Territories at a much slower pace than had been expected five years ago, while in Alberta major discoveries are being made almost daily. This tended to make a Mackenzie line for Canadian gas some years from being essential, or even practical.

When the Berger inquiry and Blair’s own on-the-spot investigations showed the

intense hostility of some Mackenzie Valley natives to any pipeline at all, Blair and Gibson were quick to say they understood, whereas CAGPL kept assuming the natives’ objections would ultimately crumble before the economics of its proposal. Today, Blair says of possible Yukon objections: “The people there are different, and I don’t think the same hostility will be evident once they see and understand what the pipeline would be.”

But the most stunning example of the Foothills flexibility—critics would say “opportunism”—came last year, when a

Salt Lake City pipeline executive, John McMillian, phoned Gibson and suggested that Foothills join McMillian’s Northwest Pipeline Corp. in proposing a completely new route down the Alaska Flighway. Northwest, through a subsidiary, Alcan Pipeline Co., would build and own the U.S. section, Foothills would build and own the Canadian stretch. McMillian, Gibson and Blair quickly hammered out a deal and Foothills changed course completely, shelving its Mackenzie plans and throwing everything into the so-called Alcan line.

When the Berger report came out, lambasting the Mackenzie proposals, Blair knew he’d guessed right. Says McMillian, in explaining the failure by CAGPL: “They started with an answer and worked backward . . . We were working with the environment while they were working against it.”

Aside from their oft-repeated concern about native rights, the Foothills team also kept stressing that their project (through the Yukon) was Canadian-owned whereas CAGPL seemed susceptible to U.S. domination, particularly by the three huge

multinational oil corporations whose Canadian subsidiaries were part of the consortium. “I knew the way opinion was running in Ottawa on Canadian ownership,” Blair says. “I knew the government was keen to encourage and develop Canadian technology.” Clearly, Blair’s up-front nationalism—he is a member and financial supporter of the Committee for an Independent Canada—did Foothills no harm.

Curiously, although Blair and Alberta Gas Trunk have been most prominently identified with the Foothills project, it really came about at Gibson’s urging. Blair

says he was becoming alarmed at what he saw during his two years as a member of CAGPL. “Good people were getting fired, I could see attitudes developing that were pure Houston, pure Detroit.” Also, he was offended because the Toronto-based board treated him as a junior and showed little inclination to make use of Blair’s existing facilities in Alberta. Recalls Gibson: “We in Westcoast had stayed out of it. 1 could see there was a lot of fussing going on in there. Of course, when you get two bright and determined guys like Bob Blair and Vern Horte [CAGPL’S president, formerly of TransCanada PipeLines] wrestling one another there’s bound to be some problems. But then I also thought maybe the wrong people were in it, that it ought to be a Canadian pipeliners’ project. Well, there were three of us—ourselves, Bob and TransCanada. 1 thought I’d have a talk with Bob first to see if we could get together. I told him I thought he ought to pull out right away, that we could do it. Three or four days later he pulled out. People from back east used to ask me about Bob. They’d say, ‘Kelly, what’re you doing business with that guy Blair for?’ But I’d just tell them that they didn’t understand. Part of the problem was that [Premier Peter] Lougheed wasn’t too popular back east just then, and every time some people, Don Macdonald for instance, would look at Bob they’d see Peter.”

What kind of man is “that guy Blair,” as not a few easterners still refer to him?

He is, in a sense, to his manner born, the son of a refinery engineer (Sidney Martin Blair, former vice-chairman of Canadian Bechtel Ltd., now 80 and living on a farm near Toronto but still modestly active in business) who worked in the 1920s on thé Athabasca tar sands and who moved around the world a lot when Blair was a child.

“My father was manager of a refinery in Trinidad,” Blair says (Blair himself was bom in the West Indies), “and in the early stages of the war was making virtually all the airplane fuel for the Royal Air Force.” Eventually, Blair recalls, the family moved to Britain, which is where he picked up the soft Scots burr that flavors his speech. Finally, the family returned to Canada when Blair was a teen-ager. He enrolled at Queen’s University in Kingston, Ontario, took a degree in chemical engineering, graduated in 1951 and got into the energy business. Blair says his father is proud of him and even made the journey to Ottawa to be on hand when the NEB decision came down. During the most bitter days of infighting between CAGPL and Foothills Blair was particularly enraged when a number of Toronto-based businessmen snubbed Blair Senior.

From 1951 to 1959, Blair worked on a number of western Canadian energy projects, including the Trans Mountain Pipe Line between Edmonton and Vancouver.

In 1959, Blair joined the Alberta and

Southern Gas Co. Ltd., the Canadian subsidiary of a U.S. firm, and in seven years worked his way up to the presidency. According to journalist Don Peacock, author of the just published People, Peregrines And Arctic Pipelines (a study of the CAGPLFoothills battle that was funded but not controlled by Blair’s company), Blair’s years as a branch-plant manager had a profound effect on his thinking and were most responsible for his determination that Canadians own their pipelines. In 1969, Blair joined Alberta Gas Trunk as executive vice-president, becoming president and chief executive officer the following year. Since then the company has grown dramatically—moving beyond the pipeline business into steel, petrochemicals, oil and gas production, manufacturing in California and Italy. The company seemed destined to become one of Canada’s biggest, even without the Foothills project. If Foothills goes through— Blair says it could be operating by 1982— there will be no stopping the firm.

Blair himself sets a brisk pace for his people to follow, flying up to 200,000 miles a year, much of it in the company jet, a DeHavilland-125. The firm is currently shopping for something bigger, according to administrative vice-president Dianne Narvik, a 34-year-old whiz, whose formal education stopped at high school but who has made herself one of the Blair team’s most important people. Ms. Narvik recently went shopping at the Paris Air Show, but said no decision on a new plane has been made yet. Her position is solid proof that Blair believes his own statements to the effect that it is “an inexcusable waste for corporations to ignore half the brains in the country, just because they’re female.” Blair, indeed, serves on the Advi-

sory Committee on the Status of Women.

Blair’s accessibility to the press is all the more remarkable because he genuinely hates personal publicity. Says Blair: “Well, 1 don’t mind business publicity but I don’t like purely personal stuff. . . Maybe shy’s not the right word, but. . .” He asks journalists not to be “too specific about the location of my ranch.” He raises cattle and horses on several hundred acres on the outskirts of Calgary, and takes what little recreation he has time for with his five children and his wife, Lois, right on his own property.

What the future holds for Blair is difficult to say. He has even given some preliminary thought to a political career. Prime Minister Pierre Trudeau’s chief political adviser, Jim Coutts, has gone so far as to discuss the possibility of Blair running for parliament, but “there’s no story in that at the moment, I’m not even a member of any political party.”

Blair says he is encouraged by the fact that “Canadians from all regions have a feeling, a sense of what I call physical Canada, the land.” He believes that such a common interest might be the starting point for rallying the country to some noble objective. What Canada must do, he says, is recover its business from foreign hands (“I think 70% Canadian ownership would be a good target figure”) and begin a reform program that would reduce government spending (“With so many of our decisions being made outside Canada and with such a high level of government activity, we’ve ended up with an unnaturally expensive country”). Says Blair: “You know, you can do it right both ways. You can be a good rancher and gradually develop the land while keeping a sound environmental policy, too.” He readily concedes he’s an ardent admirer of Peter Lougheed. “We have no personal relationship,” Blair says, “but we are enthusiastically on the same

zside of a number of issues... Peteris Western conservatism at its best, and Western conservatism is often exactly the same thing as federal Liberalism ... Lougheed’s a long-range planner. He’s looking down the line 10 and even 15 years. His word’s good, and he’s still growing as a person.” Looking out from Blair’s office windows, across the bustling cowtown grown up, to the Rockies stabbing a high Western sky, it is almost impossible to think small. And Bob Blair doesn’t.

would be ‘me-too’ on bilingualism. But Clark has opted for another course. So we had to stop and think—‘wouldn’t that be a dirty filthy confrontation?’ ” Later in the month, however, Trudeau again fueled election speculation by refusing to rule out a fall vote entirely.

Secretary of State John Roberts, who was just recovering from the embarrassment of having made perfectly unclear what the federal language policy on freedom of choice in education is, said in an

interview: “If the people of Canada agree with Clark, then the country is finished.” So, although the Liberals were delighted with their spectacular showing in the polls they were straining to contain their natural desire to have an election and possibly destroy the Conservatives because the ensuing debate might tear the country apart. This posture of saint-like sacrifice for the sake of the nation, not surprisingly, enraged the official opposition.

“That is John Roberts, who is a bit shaky

The long hot topic

As July ripened into midsummer, and legislators sat sweating in Ottawa and Quebec City, both governments began to show surprising signs of fatigue: both preoccupied with the interminable, perhaps ultimately unanswerable, question of language rights.

In Ottawa, Prime Minister Trudeau launched a debate on national unity in the House of Commons, then listened in astonishment as Joe Clark declared that bilingualism “by definition does not unite.” While it shouldn’t have been surprising that the opposition leader would attack government policy, Clark was shooting at the sacred cow of Canadian political life as far as the Liberals were concerned: the federal bilingualism policy, something his predecessor, Robert Stanfield, always refrained from doing.

In doing so, he also apparently dealt a blow to the much-discussed possibility of a fall election. “If that’s the way Clark would hold the country together, we could win an election and lose a country,” Trudeau commented in caucus, before flying west for his first visit to Alberta since the 1974 election campaign. Said a Liberal close to Trudeau: “The assumption was that Clark

on his own ground,” said an angry Flora MacDonald (PC, Kingston and the Islands) in an interview. “If the Liberals won’t realize that language is a divisive factor, we’re in trouble. It’s when you recognize it’s a divisive factor that you can do something about it.” And, as if to make the Tory point, the Liberals proved to be incapable of finding either a bilingual English Canadian, or a commissioner from Quebec to serve on their new task force on Canadian unity.

Meanwhile, in Quebec City, the government made its first serious error and, in an elaborate manoeuvre aimed at ending debate over Bill One in committee without actually imposing closure, saw the move backfire in a storm of acrimonious wrangling. The trick involved trying to withdraw the language bill and replace it with a new bill: Bill 101. However, the procedure was bungled. Bill One was not withdrawn and remains, presumably to die a slow

death on the order paper, while its replacement, Bill 101, will preoccupy the National Assembly for the rest of the summer.

At times during the procedural wrangle, one might have thought 101 referred to the temperature (in Fahrenheit) rather than the bill. The manner in which it was introduced—too clever by half, arrogant, but, in the end, merely clumsy—has caused the government an embarrassing loss of face. The manoeuvring coincided with the news that the security forces of the Quebec provincial police had been secretly examining the briefs submitted to the Bill One hearings, giving a nasty air of police surveillance to the entire proceedings.

The heavy-handed methods used to introduce the new legislation almost overshadowed the terms of the new law. Many of the pettier aspects of Bill One were modified. In the preamble, French is no longer said to have “always been the language of the Quebec people,” but rather “the dis-

tinctive language of a people that is in the majority French-speaking.” Similarly, the absurdity of a Chinese or Greek (or English) restaurant being forced to have a sign only in French is ended. But at the same time, there are other areas where the new bill is tougher. For example, the right of a customer to insist on service in French has been changed to the obligation of an establishment to provide it. And the most controversial section of Bill One remains unchanged: English-speaking parents who move to Quebec from other parts of Canada will not be permitted to send their children to English schools.

The result may yet be that, as Prime Minister Trudeau hinted at a press conference, he will soon change his mind on calling an election and campaign on the basis that the federal government is the ultimate protector of minority rights—the English in Quebec, and the French in the rest of Canada.

GRAHAM FRASER