Quebec means business

A new-boy network of entrepreneurs is shattering the old myths

David Thomas April 14 1980

Quebec means business

A new-boy network of entrepreneurs is shattering the old myths

David Thomas April 14 1980

Quebec means business

A new-boy network of entrepreneurs is shattering the old myths

David Thomas

The reputations are as venerable as Hugh MacLennan’s Two Solitudes, the 1945 novel that etched the country’s psyche with its stereotypes of the soulless anglo capitalist and the courtly, patrician French Canadian with too much honor and not enough greed to succeed in business. So ingrained was that mythology that it became a truism of the Quebec nationalist movement that nationalization and state regulation were the only means at hand to wrest the provincial economy free of English-speaking domination. And, as if to prove the point, English-speaking firms blithely justified perpetuation of Montreal’s anglophone oldboy network by citing the francophones’ presumed aversion to the Protestant work ethic.

Laments a study published this year by the C. D. Howe Research Institute in Montreal: “There is a tenacious myth to the effect that, because of specific cultural values, French Canadians are less ‘gifted’ for a management career or for an entrepreneurial role than are anglophone Canadians or Americans. This myth has taken root as much among francophones as among anglophones and provides an easy and often hypocritical ‘explanation’ for low francophone representation in senior and top management.” This presumed inability of Frenchspeaking Quebeckers to compete as equals was an essential pillar of the nationalist temple—until recently.

Almost unnoticed in the din of language arguments and power plays among the politicians, big business has become an object of infatuation among Quebeckers. The energy and effervescence that have for years imprinted Quebec music, art and film have now been appropriated by a new set of idols—ascendant business leaders who are giving francophones their own formidable multinationals and, more importantly, are creating a strong new class of power wielders. Until recently, forceful financiers such as Jean-Louis Lévesque, Power Corporation’s Paul Desmarais and National Bank of Canada President Michel Bélanger were treated as oddities, aliens among the affluent anglophones of the bankers’ row called St. James Street. Now that thoroughfare of Montreal’s financial district is known to all as rue St-

Jacques, and the dealings behind its old stone facades are increasingly within a French-speaking new-boy network of young entrepreneurs and executives, a network that is self-extending and ready to embrace succeeding generations of Quebeckers, rid of their old anti-business bias.

Inside Montreal’s modern Ecole des Hautes Etudes Commerciales—with its voluminous management library second only to Harvard’s—classrooms can’t cope with the craving for commerce degrees. Classes overflow into corridors and stairwells and, even at that, the respected Université de Montréal affiliate had to refuse three-quarters of the 2,000 applications it received last year from aspiring first-year students.

As well as the 1,700 day students, 6,000 part-time business students keep the classrooms full until midnight.

The lure of business for the young French-speaking Quebecker reflects not only profound changes within his society but also the presence of a new class of models and mentors who are proving that francophone business leaders can take on, and often enough beat, the old anglo establishment at its own game—particularly since those old players give up their places at the table so easily when the dealer changes the rules. By cashing in its investments in Quebec, Englishspeaking business has created a vacuum which francophones are rapidly filling. In the analysis of Finance Minister Jacques Parizeau, the most pro-business of the Parti Québécois ministers, “In the wake of these changes, a new wave of businessmen is building, most of them French-speaking, ambitious as they must be in this milieu, wanting to take over everything immediately, and who are largely responsible for the remarkable performance of the Quebec economy over the past two years.” Unenthusiastic in his support for his party’s desired economic union with English Canada, Parizeau hopes such entrepreneurial dynamism will convince Que^beckers they have nothing to ¿fear in going it alone. And besing a businessman is by no means a guarantee of fidelity dto federalism: nearly a third zof Quebec’s small-business owners surveyed by the Canadian Federation of Independent Business say they intend to vote “yes” (i.e., with the

Parti Québécois) in the spring referendum. But secessionist sentiment dissipates in the higher strata of businessmen who are unwilling to limit themselves to Quebec. Ultimately, their success could do more to tighten the weave of Canadian nationhood than any politician’s tinkering with the constitution. Says Federal Transport Minister Jean-Luc Pepin, a longtime booster of Quebec business: “English Canada

thinks that if it can accommodate Quebec in terms of language and culture the problem will fade away. But the real root of the issue is economic power.” Will this burgeoning class of Quebec business leaders achieve its fair share of Canadian economic clout? Alfred Hamel has reason to wonder. Hamel,

who quit school at 14 to drive a truck and then build a family fleet of 1,200 vehicles called Expeditex, has spent months of frustration in his bid to create a new regional airline for Central Canada. Ontario’s objection to a Quebec-controlled carrier becoming its principal air service after Air Canada is the crucial obstacle to Hamel’s ambition—a glamorous enterprise with a natural appeal for the 56-year-old transportation boss whose residual trucker’s love of flash is betrayed in his oversized gold belt buckles, chunky rings, alligator shoes and a new 53-foot cabin cruiser moored in Florida. Hamel already controls Quebecair and the missing link is Nordair, a bigger Montreal-based carrier with 17 aircraft and routes extending across Ontario and into the Eastern Arctic. Nordair belongs to Air Canada but the federal government has promised to deliver it back to private enterprise once a suitable buyer is found. The Hamel consortium is clearly the most eligible of the six serious bidders, both because of its wealth and because it is the only prospective buyer promising a rationalization of regional air service, but federal governments—both Liberal and Conservative—have refused to authorize the deal. The reason is simple: allowing Hamel’s group to take control of English-speaking Nordair and its extensive routes in Ontario would arouse the ire of Ontario’s provincial government

and risk provoking a new language war in the skies. Federal government hesitancy in handing over Nordair to Hamel’s group tends to confirm Quebeckers’ worst suspicions that the rest of the country is determined to keep them confined and subservient. Warns Hamel: “I don’t see how the government can possibly refuse to sell Nordair to the group I represent. It makes sense in every way and it would be badly viewed, very badly, by all Quebeckers if it doesn’t happen.”

That’s of pressing importance just weeks before Quebec’s referendum and, finally, federal authorities are acting. Transport Minister Pepin, Maclean’s has learned, is rushing to announce— before the vote—that Hamel’s consortium will be allowed to merge Nordair, Quebecair and Ontario’s Great Lakes Airlines. The federal government realizes it is running the risk of antagonizing Ontario but, says Pepin, “the whole of my life is dedicated to the proposition that what is good for Quebec is not necessarily bad for the rest of Canada.” And accommodating the ambitions of

Quebec businessmen is, according to the minister, in the best interests of both. Hamel himself anticipates little difficulty in integrating French-speaking Quebecair with Nordair, where English dominates, once the politicians let him get on with it. “I’ve never suffered any sort of complex or difficulty in my relations with English Canadians. They admire our efforts and, with businessmen, the only things that matter are our money and our competence.”

This absence of linguistic frustration is one of the distinguishing characteristics of young Quebec businessmen and the students who crowd the Ecole des Hautes Etudes Commerciales. The

school’s chairman is Pierre Laurin, 40, younger brother of Cultural Development Minister Camille Laurin, who gave Quebec the rigid language legislation that chased away thousands of anglophones and their money. Many French-speaking businessmen consider that the language law is behind the times, that it is a drastic remedy for an ailment that exists largely in the bitter memories of men of Premier René Lévesque’s generation. Today’s students, says Laurin, are emancipated from the “defeatist nationalism” of Quebec’s past. “Our young people are living in cultural security, they are sure of themselves. The generation of 20-year-olds is the first without the slightest feeling of inferiority and as a consequence they are neither submissive nor

hostile toward the anglophones.”

Laurin worries that, instead of welcoming them, too many firms long established in Montreal are moving their head office jobs to Toronto, out of Quebeckers’ reach. The usual pattern of leaving behind a Quebec regional office staffed by francophones is not good enough: “It’s a shame that just when we are becoming competent in business that so many companies are cutting themselves off from us. If the anglophone business world perceives us as a threat and leaves us nothing but branch offices, we will have missed the chance to create a real country. Anglophones have as much interest as francophones in seeing that these newcomers succeed.”

The injection of French-speaking managers into a firm that has always functioned in English unavoidably causes unease among its longtime employees. But the transition from En-

glish-speaking to bilingual management is smoothed by the understanding of francophone businessmen that English is an essential entrée to world markets. When Desmarais’ Power Corporation conglomerate soaked up Consolidated Paper Ltd. and Bathurst Paper Ltd. in 1967, English was the language of the two firms’ offices and plants. It was then that a young Montrealer named Guy Dufresne, with his fresh Harvard MBA, came to make a place for himself in the merged giant called Consolidated-Bathurst Ltd., whose 18,000 employees are concentrated in Quebec. (The company’s only French-speaking senior executive in the 1960s was Maurice Sauvé, the former minister of forestry.) Now, at 38, Dufresne is a vicepresident and, from his Dorchester

Street office, manages the company’s worldwide marketing network. Though French has become the working language in most Consolidated-Bathurst mills, English remains dominant in head office, even with Dufresne himself. Eighty per cent of ConsolidatedBathurst’s customers are outside Quebec and Dufresne, like other francophone business leaders, has adopted what he calls “the European attitude to languages: they are assets, not

barriers.”

Such attitudes, dictated by market reality, can cause curious reversals in the trend to increasing predominance of French in Montreal offices. A centuryold mortgage and trust company called Crédit Foncier distinguished itself for generations as the only national firm of its kind to be managed primarily in French from Montreal. Now, as Crédit Foncier expands its Canadian branch system—already 80 per cent of its business is outside Quebec and 12 new branches are planned for other provinces—it must make a bigger place for anglophones at head office. Explains Crédit Foncier’s 36-year-old President Robert Gratton: “When you become bigger, you have to attract people from your branch system. And by having a French-only head office, we were cutting ourselves off from our major source of talent.”

Gratton is perhaps the archetype of his generation of business leaders: a graduate of the London School of Economics and the Harvard business school’s MBA program, he brings political sophistication to high finance. After dabbling in active politics as assistant to a provincial education minister, Paul Gerin-Lajoie, in the 1960s, Gratton completed his studies and joined Crédit Foncier in 1971 as assistant to the cogeneral manager—“a typical Harvard Business School type of job.” His rapid rise was less typical, culminating last December in appointment as president and chief executive officer of a firm with almost $2 billion in assets. Part of the explanation for the dizzying ascension of such young managers is the intensity of the vacuum at the top of Quebec business: “The company had been expanding so rapidly in the past six years that it had to go out and recruit. The net result is that the average age of the management group is quite low.” Gratton expects the prospects for French-speaking business graduates will remain abundant, less because of economic growth in Quebec than because of the need to replace English-speaking managers who are either leaving Montreal or refusing transfers to that city. Despite the increased opportunities that the so-called exodus of English-speaking manage-

ment means for French-speaking Quebeckers, Gratton worries that ultimately Montreal will become a hive of French plants, economically and culturally ingrown: “I don’t think many English-speaking firms are actually withdrawing from this market, but firms that used to have their head offices here have created Quebec divisions which are more divorced from head office. I hope that these Quebec divisions which operate in French don’t create a sort of fantasy world in which young Quebeckers think they will never have to learn English. In recent years, people coming out of universities are less bilingual than 10 years ago. We have difficulty hiring young French-speaking Canadians who are really bilingual and lately we’ve found more English-speaking Montrealers who are truly able to work in both languages.” Ironically, the increasing Frenchness of Montreal, while it expands job opportunities for francophones, makes it harder for them to acquire the language of North American business: “The city is so much more French that it’s more and more difficult to become bilingual.” But, with a full 80 per cent of its business done outside Quebec, Crédit Foncier must itself function bilingually. Encouragingly, the firm’s French name has not been a grave handicap to expansion in English-speaking Canada, though it is usually mangled in pronounciation outside Quebec.

Though Gratton refused to reveal how he will vote in this spring’s referendum—“Not because I’m afraid to, but I think when I do take a public position it should be in French, not in an English magazine published in Toronto” —his personal ambitions seem more in tune with an undisturbed Canadian market. “I would feel somehow diminished if I had to work for a firm that operated only within Quebec,” he admits.

Success in the English-Canadian market has become an envied standard of achievement for Quebec businessmen, no longer content with the traditional nationalist objective of conquering control of Quebec’s provincial economy. The current darling of Quebec capitalism is Provigo Inc., a giant food chain which began as a small wholesale distributor in Sherbrooke and now spans the continent. Provigo’s sales last year exceeded $2 billion, not as much as George Weston Ltd. or Dominion Stores Ltd., but still a respectable third for a firm formed just 10 years ago. It began in a merger of three small wholesalers. Surprisingly, only one-sixth of Provigo’s sales are in Montreal: independent corner groceries and Provigo’s own chain of convenience stores outside the city are its major market within Quebec, but 60 per cent of total sales are in Ontario, Alberta, Maryland and California. Those markets were acquired in one choking gulp three years ago when Provigo took over Ontario IGA supplier M. Loeb Ltd. of Ottawa, a competitor twice the Quebec firm’s size. That transaction also gave Provigo ownership of Alberta’s Horne and Pitfield Foods Ltd. and Market Wholesale Grocery Co. of California.

Patriarch of the Provigo extended family is 61-year-old Antoine Turmel, a Québécois Horatio Alger who quit school at 16 to work in a grocery warehouse, went bankrupt with his first attempt at free enterprise, a toy factory, and then went back to the food business, merging and buying his way to capitalist heroism. But Turmel, chairman of Provigo’s board of directors, credits his young management group with the company’s surge in less than a decade from purveyor to village variety stores to multinational giant. There from the beginning was Provigo’s 38-year-old president, Pierre Lessard, who joined Turmel after receiving his Harvard MBA, class of ’67. Like all of his contemporaries, Lessard grew up in a Quebec still alienated from private enterprise: “Business was reserved for English Canadians. And on our side there was a

certain anti-business snobbism because French-Canadian elites traditionally chose the liberal professions. Business administration just wasn’t considered an intellectual challenge.”

Both attitudes have been reversed, Lessard says. “Success has never been so possible for francophones,” partly because Quebec language legislation has legitimized the use of French in business and encouraged the creation of management jobs for Quebeckers. And, though the acquisitions were made with trepidation, Lessard says Provigo’s take-over of M. Loeb proved that English Canadians will accept French-

speaking management. “It wasn’t a ‘friendly’ take-over. There was a lot of surprise in the companies we acquired and we were very apprehensive about how their managements would receive this move by a French-Canadian company. But, in the end, language didn’t seem to matter. They judged us on our competence.”

It seems ironic that it is in business that French-speaking Quebeckers are exhibiting the most daring and creativity. Though it may well come too late to have an important influence on the constitutional referendum, inevitably the old nationalist mythology will appear increasingly outmoded. Lessard’s assessment: “One of the causes of the current malaise is the feeling that FrenchCanadian opportunities are limited to Quebec. Success by French-speaking businessmen in the big Canadian market will upset that old perception.” There’s irony, too, in the fact that it’s not the politicians or the bleeding hearts of national unity who are finally attacking the myth and the reality of the two solitudes. It is profit-driven businessmen who are doing the most to force new links between English and French Canada and who are giving new generations of French-speaking Quebeckers a personal stake in the country’s cohesion.