For the New Quebec, a new economic establishment

GRAHAM FRASER March 7 1977

For the New Quebec, a new economic establishment

GRAHAM FRASER March 7 1977

For the New Quebec, a new economic establishment

Their names are virtually unknown in the rest of Canada, their faces unfamiliar even in Quebec. But when Premier René Lévesque rose to address the Montreal Chamber of Commerce in February, he was flanked by men who are members of a group that will be critical to the success of Lévesque's fledgling Parti Québécois government in the months and years to come. And, in the event that a sovereign Quebec should some day become a reality, these same men would face the difficult task of defending and developing their country’s economic health in the face of competition from the Canadian and U.S. monoliths that would abut the tiny new state. They are representatives of a relatively recent phenomenon that has barely been perceived in the rest of Canada: the new Quebec economic elite.

They have emerged from what the Parti Québécois’ energy minister, Guy Joron, calls "Quebec's third economic establishment." First there were the old-established Anglo-Canadian companies that located their head offices in Montreal in the days when Britain was Canada’s principal trading partner. Then came the multinationals, which located in Quebec because of the natural resources or markets available. To be sure, there have been examples of French-Canadian talent and success in the business world, typified by men such as Bell Canada's president Jean de Grandpré, Claude Hébert of the Bombardier-MLW firm, former CBC president Laurent Picard, who now heads Marine Industries, or Quebec capitalist Paul Desmarais. Yet these men have scarcely constituted an economic power bloc within the Quebec context. Now, notes Joron, a new group has developed that does not have its roots in capitalism, but rather in the explosive growth of provincial^ directed financial and industrial institutions that were spawned in the years of Quebec’s Quiet Revolution. And it is with these men, adds Joron, that "the most important decision-making power for the future of the Quebec economy can be found.” Perhaps even more importantly, at a time when the business community is deeply suspicious of the leftleaning Lévesque government, these men are going to be of crucial importance—both for the power they possess and for the personal influence they can wield as intermediaries between the government and the financial world.

Who are these men? Foronething, they are characterized by their dual links with government and business. In the shock that hit the business community last November 15 with the election of a separatist government, it was to these men that worried businessmen often turned first for assurance. They are not men necessarily committed to Quebec’s eventual independence, though at least one looks back with unconcealed bitterness on the days when French Canadians faced barriers to advancement in major financial institutions. Among the new elite:

Michel Belanger, president and chief executive officer of the Montreal-based Banque Provinciale (assets: $3.6 billion). In July, 1960, shortly after Premier Jean Lesage's Liberals took power in Quebec, Belanger was on vacation in Quebec City. Only 30, he was a civil servant with the federal Department of Finance on loan to the research staff of the Royal Commission on Energy. Then he met one of Lesage’s ministers—René Lévesque. "The first time I saw René Lévesque,” recalls Belanger, "he looked like a guy who had just taken over after the [World War II French] resistance. He was in his office with three or four of the old civil servants at the door, who looked really out of place.

I was hired on the spot" as Lévesque’s economic adviser in the Department of Hydraulic Resources.

When Belanger returned to start work in August and went to his office, there was a note on his desk: "I’ve gone on holidays. There is a secretary in the second door on the right, a secretary in the second door on the left. Good luck." It was signed by Lévesque. Later, Belanger helped persuade the Lesage cabinet to accept Lévesque’s plan to nationalize private electric companies in Quebec. After serving in a variety of posts, he left the government in 1972 to become president and chief executive officer of the Montreal Stock Exchange and, in April last year, president of the Banque Provinciale. He is universally admired, and may play an important intermediary role between business and government. However, this role may be diminished with La Banque Provinciale’s recent acquisition of Unity Bank and its shift in interest toward the rest of Canada.

Roland Giroux, president of Quebec’s prestigious and powerful hydroelectric utility Hydro-Quebec. There is a story, perhaps apocryphal, that when former premier Robert Bourassa went to Europe with Roland Giroux the financial men of Milan warmly greeted Giroux and said: "Ah, and is this the young man you’ve been telling us about, Roland?" as they met the Premier. Giroux is retiring next summer for health reasons, but he remains one of the most respected Quebeckers on the international money mar-

kets. It was he who took Lévesque to meet his friends on Wall Street during the new Premier’s trip to New York in January. As Lévesque put it later, Giroux is "an ad hoc adviser. When it’s a question of the financial climate, by definition, the president of Hydro-Quebec is an adviser."

Giroux believes that Quebec is best served by remaining in Canada. But he also makes it clear that he is prepared to continue helping the new government in whatever capacity he can after he retires in August. Says Giroux: '11 would never refuse to help." One of the things he is urging upon the new government is a code for investors, so they will know the ground rules under a separatist government. "As long as they know the rules of the game for investment aren’t going to be changed," says Giroux, "they'll corneas long as they know ahead of time."

Marcel Massé, chairman of Quebec’s Société General de Financement, the province’s publicly owned holding company that has interests ranging from shipbuilding to forestry exploration. Now 64, Massé left the Bank of Montreal almost two years ago, having reached a higher position in a major Canadian bank than any French Canadian ever; after 46 years with the company, he had risen to executive vice-president. He took early retirement, and accepted the job of chairman of the Société Generale de Financement. He calls his work with the SGF “the happiest 21 months of my life’’—and remembers the obstacles to success that once faced French Canadians in major Canadian banks. “You know," says Massé, “There is one bank that has been here in Montreal for 160 years. Do you know how many French-speaking executive officers they have? Two out of 72.”

He is optimistic about the future of Quebec, and is determinedly telling people so—constantly urging businessmen to talk to the new government, to open up lines of communication, to cooperate, to help, to talk. His enthusiasm is infectious. “This is still a good place to invest,” insists Massé. “We’re still very interested in industrial developments. You can’t go wrong. I just wish I were 10 years younger.”

Other members of the emergent elite include such men as Marcel Cazavan, chairman and general manager of Quebec’s Caisse de Depót, the province’s deposit and investment fund, Robert Boyd of the mighty James Bay Energy Corporation, and Alfred Rouleau of the Caisses Populaires Desjardins which operate a vast network of highly popular credit unions across the province.

All these men are products of the drive that began during the Sixties, in many cases at the urging of René Lévesque, to create a network of provincial institutions over a wide range of fields. The aim: to give Quebeckers the tools they lacked after years of malign neglect under the rule of Maurice Duplessis, and, equally important, to give francophones an outlet for careers in management at a time when the Quebec business community was operating almost entirely in English. The drive resulted in, among other things, the 1963 nationalization of Hydro-Quebec, the 1965 formation of the Caisse de Depót as a result of an historic Ottawa-Quebec City compromise over the Canada Pension Plan, and a host of acronymie ventures including SIDBEC (the Quebec Steel Corporation), SOQUEM (the Quebec Mining Exploration Corporation) and soouiP(the Quebec Petroleum Explorations Corporation).

Now, in the aftermath of November 15, the veterans of these institutions may well hold the economic future of Quebec in their hands. For some jittery-nerved anglophone Quebec businessmen, that is not an entirely cheering thought. Says one English-speaking businessman: “In the land of the blind, the one-eyed man is king. And in Quebec now, the one-eyed man is an economist.” “I understand the shock of the business community,” says Jean-Roch Boivin, a special adviserto Lévesque. “On November 16, they had no phone book any more. Not one of their phone numbers to any cabinet minister was any good anymore. ’ ’ The men now in power, notes Boivin, have “never been in the network of communication with the business community." Now, for francophone and anglophone Quebec businessmen alike, the new game in town is to learn different telephone numbers and make contact with the impressive and canny men who have taken over the levers of economic power.