Geoff Conway was one of those three “whiz kids” who helped draft Walter Gordon’s 1963 budget. He’s still behind the scenes—still trying to reform Canada’s economy

ALEXANDER ROSS January 1 1969


Geoff Conway was one of those three “whiz kids” who helped draft Walter Gordon’s 1963 budget. He’s still behind the scenes—still trying to reform Canada’s economy

ALEXANDER ROSS January 1 1969


Geoff Conway was one of those three “whiz kids” who helped draft Walter Gordon’s 1963 budget. He’s still behind the scenes—still trying to reform Canada’s economy


GEOFF CONWAY IS probably the nation’s ultimate accountant: a sort of merciless little computer who spends his life trafficking in data that is boring and incomprehensible to most of us: cost-efficiency ratios, actuarial statistics, tax yields, capital gains, cost allowances. He even runs his life on a cost-efficiency basis. He spends a lot of time in traffic jams, which is wasteful. So he carries a little portable dictating machine with him, and spits out several hundred words of memos every day between his house and the office. He also carries little lists of problems around with him. When he has a few moments to waste (walking to a lecture, say, or going to the bathroom) he takes out one of his little lists and. with that parahuman precision that has made him famous in economic circles, he thinks.

There would be no reason to remark upon these relentlessly managerial virtues, except that Conway, who is now a special lecturer at York University’s School of Administrative Studies, has probably had more behind-the-scenes involvement with Canada’s economic policy than the combined machinations of General Motors and the Argus Corporation. While still a graduate student at Harvard, he helped draft Walter Gordon’s famous 1963 budget, which almost toppled the government. As a senior researcher for the Carter Royal Commission on tax reform, he helped draft a document that frightened the daylights out of nearly every sector of the Canadian business Establishment — a document, moreover, that was such a brilliant intellectual achievement that Harvard now gives a seminar course on its findings. He was also one of a small team of volunteer experts who worked out the principles and procedures that are now the guts of the Canada Pension Plan. Another of Con-

way’s research studies provided valuable ammunition supporting the Watkins Committee report, the current bible of Canadian economic nationalism. Finally, as a spinoff from the Watkins data, he has completed yet another study whose conclusions, in their own fusty way, are startling enough to justify palace revolutions within every stock exchange in Canada.

The impact of these studies has been much more important than their initial receptions might suggest. There is probably no nation on earth that now possesses such detailed and practical blueprints for economic reform. Because the methods that Carter and Watkins devised for implementing their own recommendations were so practical, and because the data supporting their conclusions is so unassailable, these blueprints are going to be difficult, perhaps impossible, to ignore forever. Already, in last September’s budget. Finance Minister Edgar Benson moved toward several of Carter’s recommendations.

The studies in which Conway has been involved tend to reinforce each other. His study for the Watkins Committee and the TSE, for instance, expunged forever the myth that Canadians are cautious investors. The reason Canadians own so little of their own economy, his figures demonstrate, is that large institutions — insurance companies, mutual funds, pension funds — are grabbing off most of the available stocks, thus creating a serious supply shortage for small investors. “The figures show,” he says, “that even if all the big private companies like Eaton’s, and all the big U.S. subsidiaries like General Motors, were to sell one quarter of their shares to Canadians, there still wouldn’t be enough equities to meet the demand.”

In other words, we can afford to

buy back Canada, if only the rules were altered to allow us to do so — which is precisely what Walter Gordon has been saying for years. And what about Carter’s infamous proposal for taxing unearned stock profits? “Well,” says Conway with a savage little smile, “now that we’ve documented that there’s a serious equity shortage, it’s going to be pretty tough for Bay Street to argue that a capital-gains tax will drive investors out of the market, isn’t it?”

So what Conway has been doing for the past eight years, in his slogging actuarial way, is helping to assemble a package of statistical arguments which, if their implications were accepted by business and government, would transform this country’s economy into a vastly more rational, and somewhat more sovereign, entity.

Conway has managed all this at 35 because he is, quite simply, a fanatic. “Two hundred years ago,” says one of his former colleagues, “he would have made an ideal Jesuit. He’s got the eyes for it.”

It’s true. Conway’s eyes are remarkable. They are black and urgent, and they glitter with an unholy fire. When he tries to explain something — Bay Street’s reaction, say, to some tax measure he dreamed up — the words come spitting out faster and faster, rank upon rank of them like little soldiers, his eyes rivet you with a carbon-steel stare, and he punctuates every third sentence with a brief, wintry smile. If you can imagine Hitler or Savonarola declaiming about accelerated depreciation write-offs, you’ll have an idea of the controlled passion that Conway pours into his dry, statistical discipline.

Conway’s forte is not persuasion, but factual input. In the Gordon budget, the Carter report, the pension plan and the Watkins report, it is impossible to point out a single recommendation that can be labeled pure Conway. But it was Conway’s factladen advocacy, Conway’s relentless precision in gathering supportive data, and Conway’s flair for devising administrative solutions, that made it possible for his bosses to put forward many of the proposals they did. “What was Geoff’s main contribution to my budget?’’ muses Walter Gordon. “Well, I suppose you could say that he plugged a lot of loopholes.”

His career so far has had a tinge of inevitability about it. At the Uni-

versity of British Columbia in the mid1950s, it was routinely assumed that he would be Minister of Finance by the time he was, say, 25. As treasurer of UBC’s Student Council it took him an effortless few weeks to reorganize the finances of the Alma Mater Society (the student body) into a state of terrifying efficiency. His chief reform was to insist that UBC’s administration, which collected AMS fees on registration day, turn them over to the AMS immediately, instead of at the end of each fiscal year. This manoeuvre gave the AMS several

thousand extra dollars in annual interest income.

After graduating in Commerce in 1956, Conway went to work for the Vancouver office of Clarkson, Gordon, Ltd., probably the nation’s most venerable chartered accountancy firm and, in 1961, transferred to head office in Toronto. He also joined an informal group of Bay Street experts who donated their fiscal expertise to John Wintermeyer, then leader of the Ontario Liberal Party.

Conway, then 27, became a key member of the Wintermeyer brains trust. When on the basis of Conway’s research and urging, Wintermeyer argued against certain aspects of a government sales-tax plan and offered counter - proposals, the government called a committee hearing to debate the matter.


“That’s when the caucus got scared,” Conway recalls. “They had their whole reputation riding on me. Who else had checked the figures?” Conway’s boss, Walter Gordon, called his junior employee into his office. “Well,” he said, “are your figures accurate?”

“I believe so, sir,” said Conway, who assumed Gordon was going to ask him not to appear before the committee. Gordon thought for a long moment, then said, “Okay, have fun.”

Conway did, spent the better part of a day being cross-examined by MPPs and experts from the Provincial Treasurer’s office — and emerged with his arguments unshaken, though the government plan had already been implemented.

The same brains trust later worked for the federal Liberal Party, this time to draft the outlines of a national pension plan. Conway and the team’s other members, including investment dealers David Stanley and Martin O’Connell, met weekly in each other’s living rooms for seven months, and at the end produced a 120-page document that became the basis for the Liberals’ pension promise in the 1963 campaign that returned them to office. Once again, Conway’s penchant for input was crucial: “We’d think of an idea one week,” says O’Connell, “and Geoff would turn up the next week with the figures showing exactly what would happen if we tried it.”

Shortly after election day, Finance Minister Gordon summoned Conway, Stanley and O’Connell to Ottawa to help bail him out of the impossible commitment that Lester Pearson, to his later regret, had called the “Sixty Days of Decision.” Gordon, working with an understaffed department, had to produce a budget within weeks. Conway hustled up from Harvard — he’d resigned from Clarkson, Gordon to work on his doctorate in finance — and plunged into the task of helping put together a budget that had to be dramatic, nationalistic, deficit - reducing, and defensible against a powerful opposition.

The result of these efforts has entered into the federal folklore. Conway, Stanley and O’Connell were swiftly labeled “the Bay Street boys,” “the

three whiz kids,” and suddenly became a serious political embarrassment to their minister. To senior Finance officials who had to work with them, they were worse: an intolerable affront.

Of the three “whiz kids,” Conway was by far the youngest and, it is safe to assume, by far the least palatable. “My God!” says one man who was a close observer of those frantic few weeks. “How do you suppose those men felt? Here were some of the best economic brains in the country — hell, in the world! — and here was this graduate student running around telling them how to write a budget!”

It’s not hard to imagine. Conway is brilliant, fantastically energetic, dedicated to his country and urgently interested in necessary reforms. These are all admirable qualities, but he is not in the least humble about any of them. “It’s incredible how many people dislike him in Ottawa,” says one associate. “He frightened them. The trouble is, Geoff is too impatient with stupidity. He tends to underestimate the intelligence of anyone who disagrees with him.”

Conway himself confirms this impression. When he’s arguing a point, he never thinks of himself as arguing; for him, it’s simply a process of making the other person understand the facts. When that happens, Conway seems to feel, agreement will automatically follow. “All I do,” he told me in one interview, “is to feed data into the hopper. After that, the conclusions should be inevitable.”

After Gordon’s budget collapsed, Conway never did get back to Harvard. Before he left Ottawa, he was hired as one of 60-odd full-time researchers for the Carter Commission. He spent three years working on the massive report that has been described as “a soaring cathedral of fiscal equity” (by an ecstatic Harvard economist) and as a blueprint for wild-eyed socialism (by almost every industry that would have its taxes increased).

What the commission proposed was to replace our present chaotic tax structure with a system that, as its starting point, insists on fairness — or, as economists say, equity. The result is a fantastically complex collection of interrelated proposals for tax reform, all predicated on the proposition that, in Kenneth Carter’s immortal words, “a buck is a buck.” In other words, all income would be taxed, but taxed much more equitably than at present. The end result: corporations — especially foreignowned corporations — and rich

people, would, in general, pay more. Most taxpayers would pay less, and nearly half of them would pay substantially less — at least 15 percent, which is a saving you can feel. The social implications are obvious. The privileged few would lose. The overtaxed majority — including the sad little man whom newspaper cartoonists habitually depict wearing a barrel — would gain.

Conway’s contribution to the report’s final form was important, but not crucial. His major published effort was a study showing what would happen if a capital-gains tax were imposed, and how it could be administered. The hours of research were hideously long. For nearly two years, Conway and a few others usually caught the 2 a.m. subway home from the commission’s Toronto office, and they were back at work at nine the next morning.

Now Conway has a less frantic work-load. But he still stays up until two or three in the morning in his own living room, jotting down figures on lined pads of foolscap, answering the long-distance telephone, worrying over those little lists he carries. Spare time with his nine-year-old son Michael is equally demanding intellectually: they play endless games of chess and Monopoly. Michael, incredibly, is several games up on his father.

You should have seen Conway at midnight when Edgar Benson brought down last fall’s budget. Calls kept coming in: investment dealers, financial writers from all over the country, company presidents — a whole secret network of people around the country who rely on Conway’s astonishing brain. He talked to all of them, with that same staccato urgency, about the magical mysteries of money:

“. . . Well, it’s a flat-rate tax,” he was saying to one caller from Montreal, “and a good chunk of the policyholders are tax-free, aren’t they? Now the key thing is, what are they going to do on the corporate side? . .

On and on he went, inexhaustible, talking and talking and talking in that strange economic code language until it was almost light outside. (Often his housekeeper will come in in the morning and find him flaked out on that same living-room couch. No time for bed.)

What happens to people like Geoff Conway? Do they burn out or rise forever or what? “If he winds up in the right slot,” says Walter Gordon, a brilliant man who’s had his ups and downs, “he’ll do very well. It’s all a matter of luck, you know.” □