COLUMN

The happy cold warriors

Business and government may publicly grieve, but the game suits them both

Roderick McQueen April 20 1981
COLUMN

The happy cold warriors

Business and government may publicly grieve, but the game suits them both

Roderick McQueen April 20 1981

The happy cold warriors

COLUMN

Business and government may publicly grieve, but the game suits them both

Roderick McQueen

The log fire burns incongruously amid the April warmth. Ancient stairs creak past photos of dead governors-general. A murmur of members seeps from the second-floor dining room where fresh smelt graces the menu. Lunchtime at the Toronto Club. Here, former premiers, corporate potentates and high priests of finance withdraw from the world for fine food and good gossip. My companion, a club member and investment counsellor, peers over his plate to say, “They’re not listening in Ottawa.” He quotes the prime minister’s policy adviser, Tom Axworthy (brother to Lloyd, friend and defender of women) as saying: “Why should we listen to business? They voted Tory.” Other proof follows, then the clincher: “Jim Coutts won’t return Jack Armstrong’s calls.” Hmm. Why wouldn’t Coutts, the PM’s principal secretary, at least be polite to the chairman of Imperial Oil? Imperial is not able to confirm or deny the story. My call to query Coutts isn’t returned, either. Am I flattered or flummoxed to be equally inconsequential? Or is he consistently inconsiderate? Perhaps it’s just another irony in the fire.

More likely, it’s all so much fake flak in the renewed cold war between business and government. Through 1978, the two were almost lovers when the earlier Trudeau government’s Board of Economic Development gave everyone boardroom eyes. Then when the Conservatives won in 1979, joy was boundless as business chorused, “What a friend we have in Joseph.” There were consultations before the Tokyo summit, multiple pipelines into the prime minister’s office and cheery meetings between the two elites that outnumbered the days in the brief regime. Then Clark collapsed and the world went black.

The resurrected Trudeau, who met the Business Council on National Issues (a 150-member group of chief executive officers) two or three times in his previous incarnation, has not received them since winning. Nor is any meeting scheduled. Other signs of war include last fall’s interventionist National Energy Program, said by business to be socialist; and the eight-year combines investigation into the petroleum industry that is seen as a witch-hunt.

None of this is newly minted coin. In 1975, Trudeau’s year-end CTV interview convinced business he would strangle any free enterprise wheezes previously missed. Those were fractious times, for when a group asked Finance Minister Donald Macdonald privately whether he had consulted then Royal Bank Chairman Earle McLaughlin on some matter, Macdonald replied testily, “We have not yet been summoned to the throne.”

The longest-running campaign in the cold war must, however, be competition policy. After studies and tinkering that began in 1966, another attempt to control take-overs is coming this spring. This time, however, there might be the political will and realism to succeed. Rather than come to Parliament with a two-inch-thick piece of legislation, Consumer and Corporate Affairs Minister André Ouellet will table a scant 12 pages of amendments meant to decriminalize combines law by strengthening the conspiracy clause, abolishing the sections that say that mergers and monopolies are criminal offences and establishing a tribunal or court procedure to pre-screen mergers and take-overs.

In future, for example, deals such as The Bay’s purchase of Simpsons and Zellers would require an advance green light. Trouble is, by the time the law is in place a year or more from now, there may be little left to guard. Since Jan. 1, 1978, 51 firms of the Toronto Stock Exchange’s 300 industrial index have disappeared because of take-over, merger or going private. Why? Because in the past decade, excluding the energy sector, the cost of buying new plants and equipment rose three times faster than the price to buy an existing firm.

Some target companies complain that their defence devices are limited. After all its effort to beat off Campeau Corp., Royal Trustco Limited has two new major owners anyway, now that Olympia & York Investments Ltd. and Brascan Ltd. have 38 per cent between them. The general question becomes: who should decide ownership—(a) self-interested current owners, (b) greedy bidders with limitless cash, (c) an insufficiently informed market, or (d) none of the above?

2 Two years ago, when §Brascan bid for U.S.-based 8F. W. Woolworth Co., it >had to produce a highly “readable 115-page document to comply with U.S. law. There is no such requirement for similarly digestible information or any airing at all before a cash offer goes through in Canada. If the government were to create— which it should—a tribunal with powers similar to the U.S. Securities Exchange Commission, business would whine but continue to dine, just as it is learning to live with the National Energy Program. And, for the government’s part, if there is other wrongdoing, similar to that alleged in the petroleum inquiry, that, too, will likely be shuffled off to the limbo of the Restrictive Trade Practices Commission for study. This kind of public grieving but private agreement by both occurs because if people get the kind of government they deserve, they get the kind of business that goes with it—the survival of the fattest. The cold war proceeds and the telephone calls continue unreturned because it suits both sides. Which is great if you like the idea of two scorpions in a bottle. Without stingers.