BUSINESS WATCH

Killing fields in Old Montreal

Premier Robert Bourassa’s language law ruling is turning the Anglo business community into an endangered species

Peter C. Newman February 20 1989
BUSINESS WATCH

Killing fields in Old Montreal

Premier Robert Bourassa’s language law ruling is turning the Anglo business community into an endangered species

Peter C. Newman February 20 1989

Killing fields in Old Montreal

BUSINESS WATCH

PETER C. NEWMAN

Robert Bourassa’s bizarre language law ruling, which detonated the most serious French-English confrontation since the 1980 referendum, is creating a parallel crisis among the surviving members of Quebec’s Anglo business community. They are about to become an endangered species.

Montreal was once Canada’s dominant financial centre: the influence of the St. James Street money barons far outweighed Bay Street’s newfound influence. The shift to Ontario started early this century, when the upstart Toronto Stock Exchange became the main trading pit for the resource industries, as well as giving investors access to the surging American stock markets. Montreal continued smugly to reject such extravagances, content to concentrate on blue-chip properties, preferably bearing British pedigrees.

Two of the largest banks—the Royal and the Montreal—the most influential investment houses—Nesbitt Thomson and Greenshields—and most other leading financial institutions—in fact, most of the country’s top 500 companies—were headquartered within a square mile of Mount Royal’s brow. The shift to Toronto became an avalanche with the 1976 election of René Lévesque’s separatists. Corporate decision-makers headed for Hogtown; the ornate trading floor of the Montreal Stock Exchange was symbolically and literally converted into a theatre.

I remember, at the time of the PQ crisis, interviewing CPR chairman Ian Sinclair about rumors that his corporate files and mainframe computer had already been shipped out of the province and that he would shortly follow. In those days, the railway’s headquarters were in the cavernous back rooms of Windsor Station, and I had to walk down echoing corridors of empty offices to reach the chairman’s lair. Sinclair was sitting behind a massive, handcarved oak desk that had originally belonged to Sir William Van Horne, father of Canada’s first transcontinental railroad. “How much of the

Premier Robert Bourassa’s language law ruling is turning the Anglo business community into an endangered species

CPR is really left in Montreal?” I inquired, realizing its chairman would probably not say much because separatists were hounding him to declare his intentions. Sinclair looked up at me, his face twisting into the rage that he felt at having been forced by the province’s political crisis to act against his will. Then he answered my question by grimly pounding his air-hammer fists on the polished surface of the Van Horne relic, chanting: “What’s left in Montreal? This desk. This damn desk!”

Tensions eased during the intervening decade, especially after the 1980 defeat of Lévesque’s schizophrenic sovereignty-association option. But now all bets are off and, except for such companies as Alcan, which must stay because most of its primary plants are in Quebec, few major English capitalists are expanding their business in the province. The fiscal exodus has started up again, as Anglomanaged capital moves to Ontario and other jurisdictions, where it can expect political protection. Large gobs of Franco capital may follow the trend; the tip-off will come when Paul Desmarais decides where to invest the $1.25 billion deposited in Power Corp.’s treasury by his recent sale of Consolidated-Bathurst. At the moment, the betting is that he will

expand his U.S. and/or European holdings.

One emphatic exception to Quebec’s escalating disinvestment by the local English Establishment is Lome Webster’s Prenor Group, a financial conglomerate with assets of more than $3 billion—and growing fast. (The other major Establishment presence left in Montreal is Charles Bronfman, the coproprietor of Seagram’s who also operates a merchant bank. Although Bronfman himself remains actively and constructively involved in the Montreal community, in 1971 Seagram’s Canadian headquarters moved to Waterloo, Ont., and can no longer be counted as Quebec-based.)

A cherub-faced, sporty-looking 60-year-old who belongs to six tennis clubs, Webster has family roots that stretch back, through his maternal grandfather, to Charles E. Frosst, who formerly owned this country’s largest pharmaceutical firm, and, on his father’s side, to the legendary Senator Lome Webster, who once controlled most of Quebec’s coal and oil supplies. His uncle is 78-year-old Howard Webster, the former proprietor of the Toronto Globe and Mail, whose impressive real estate and investment holdings have been brought together in Imperial, a family trust company of which Lome has become a director.

After graduating as an engineer from McGill, young Lome did not take the time to try for an MBA but formed a group of likeminded entrepreneurs who met once a week to solve the case histories taught at Harvard. In 1969, he used a $15,000 loan to establish Prenor, which in 1987 earned $9.9 million—a 111-per-cent increase from the previous year. The miniature financial conglomerate includes three trust companies (Vanguard in Toronto, Atlantic Trust in Halifax and the recently acquired CanWest Trust, which has eight branches across the Prairies and in British Columbia) and the Bolton Tremblay group of 10 investment funds. Prenor Group is also a partner in Canaprev, which owns two large office buildings in downtown Montreal.

As well as being a governor of McGill and Canada’s Olympic Trust, Webster owns 10 per cent of the Montreal Expos and has been president of the Mount Royal Club, once the bastion of Montreal’s Anglos. “Montreal’s English business community really is dwindling,” he told me. “This city is supposed to be onethird non-French, and if I’m in Chicago or somewhere else and someone asks me, I say Montreal is 70-per-cent French and 30-percent English. But, according to the last census, the actual Anglo total, after you take out all the Italians, Portuguese, Syrians and other groups including Jews, is something like 4.5 per cent.”

When the province’s universities recently presented their case to the Quebec government for increased funding, it was Jean de Grandpré, as McGill’s chancellor, who carried the message on behalf of higher education in English. Because that post, once the traditional roost of the recognized leader of Montreal’s business establishment, is no longer filled by an Anglo, de Grandpré gave his entire speech in English. That was an elegant gesture, but it dramatically documented the final demise of an elite that had once run most of the country.