BUSINESS WATCH

The only revolution that can save Canada

Peter C. Newman December 28 1992
BUSINESS WATCH

The only revolution that can save Canada

Peter C. Newman December 28 1992

The only revolution that can save Canada

BUSINESS WATCH

PETER C. NEWMAN

History moves from watershed to watershed, according to its own agenda. The year just past will be recognized as such a watershed, because so many of our touchstones vanished. Countries live by their collective touchstones, not because every citizen necessarily believes in their sanctity, but because they provide a nation with ideas to believe in, notions to feel safe and comfortable with.

What the deadliest recession since the Dirty Thirties has made clear is that our economic system doesn’t work anymore; and what the negative results of the October referendum revealed was that the political system has to be revamped. Taken together, these two trends signal that something fundamental will have to happen to break the vicious circle of monetary debt and political disillusionment. Such a remedy will require far more drastic measures than the eventual recovery from the current economic trough, or a renewal of political party leaderships.

It will take nothing less than an unprecedented cultural upheaval to reverse the cycle of what Canadians expect from their governments. The institutions, in turn—whether they’re governments, banks, or any other conglomeration of power—will have to stop plundering their revenues for their own aggrandizement, and begin serving the people who subscribe to them.

So many once-sacrosanct Canadian institutions failed us in the past 12 months that it’s difficult to keep the list to one page, but here are a few examples:

1. Becoming a Canadian diplomat was once considered Canada’s highest calling, with fierce competition among the country’s best and brightest to write the exams that determined who would get one of the limited number of available slots. In 1992, 275 employees of the department of external affairs—one in every 14—were found to have abused public funds. Criminal charges have already been laid; more are to follow. Similarly, foreign diplomats

It will take nothing less than a cultural upheaval to reverse the cycle of what Canadians expect from their governments

in Ottawa are cheating. One investigation recently revealed that each cigarette-buying member of the diplomatic community purchases enough duty-free cigarettes to smoke more than 20 packs a day.

2. Bell Canada was once considered to be the country’s most respectable and most conservative company. In 1992, it turned out that it was using a phony law firm to frighten telephone users into paying their bills. Delinquent customers were sent toughly worded notices, to pay up or be sued, on the letterhead of a legal outfit calling itself Pezzack, Eccles & Rand—Barristers & Solicitors, writing on behalf of their client, Bell Canada. Such a firm never existed but Bell thought a letter from lawyers (even if false) would scare people more than one of its own notices. The company terminated the practice only when the Law Society of Upper Canada ordered it to put a stop to the sham.

3. Ever since the Reichmann brothers started arriving in Canada 38 years ago, they’ve been considered model corporate citizens, creative yet not impulsive, deeply religious men who placed personal honesty ahead of corporate profit. The cash flow of the empire they built up amounted to $7 million a day and by 1981 their accumulated borrowing power had exceeded

$10 billion. In 1992, it became clear that the world’s largest real estate empire was built on financial quicksand, and that—in the most generous interpretation of his behavior—Paul Reichmann had refused to tell his bankers the truth until it was too late. In its fiscal year that ended in 1992, Olympia & York lost a stunning $2.1 billion and its daily cash flow was reduced to just over $200,000. The empire’s insolvency so shook the Canadian banking system that it lost nearly $2 billion in pretax profits. That prompted the banks to take out the frustration over their own ineptitude in allowing the Reichmanns to fool them, by tightening loans on otherwise risk-worthy Canadians.

4. Generations of Canadians believed in members of the British monarchy, not as visiting foreign dignitaries, but as examples of quiet dignity and moral rectitude. In 1992, royal scandals became fodder for the supermarket tabloids, along with two-headed babies who sing “Sweet Georgia Brown” in harmony, and the evolving sex life of Oprah Winfrey. Even the worst of the tabloids refused to print transcripts of some of the royals’ overheard telephone conversations. They were too explicitly randy. Symbols die hard, but the British monarchy is dead.

5. One of Canada’s most enduring legends was the notion that it was the Canadian Pacific Railway, which, in 1885, bound the country together by completing its ribbons of steel from sea to shining sea. That wonderful bit of mythology will sustain us no more. In 1992, the CPR, whose debt obligations were seriously downgraded by the bond rating services, applied to abandon its tracks east of Sherbrooke, Que. Canadian National, which no longer serves Newfoundland or Prince Edward Island, long ago ceased providing a full coast-to-coast service.

6. It used to be true that even in the country’s most troubled moments, Confederation always worked at least one day a year: when East and West faced off for the Grey Cup. No more. In the late fall of 1992, CFL commissioner Larry Smith decided to abandon the game to the American bush leagues by exporting it as a second-rate attraction to such second-string cities as San Antonio, Portland and Sacramento. “Let’s get over all this mushy stuff,” Smith said, kissing off an 83-year tradition.

Many distinguished Canadians died in 1992, among them Bruce Hutchison, who was my friend and favorite gardener-philosopher. But somehow the death of Canada’s touchstones was most starkly epitomized at the September 17 funeral of the Hon. Paul Martin. A consummate politician, in both the best and worst meanings of that word, Oompah (as he was known) first emerged in Canadian public life as a delegate to the old League of Nations way back in 1938. He pioneered Canada’s social welfare system and set the tone of our Middle Power foreign policy. It was entirely appropriate that it took four bishops and a dozen priests to officiate at his final service—and that his body was borne away by a troupe of 75 Knights of Columbus, done up in black suits and red capes.

It was less the burial of a man than of a generation.