The Nation’s Business

How could K. C. Irving make the list?

Peter C. Newman July 13 1998
The Nation’s Business

How could K. C. Irving make the list?

Peter C. Newman July 13 1998

How could K. C. Irving make the list?

The Nation’s Business

Peter C. Newman

I’ve been hanging around Maclean’s for something like 40 years, but never realized how helpful the magazine can be. In the July 1 edition, with its usual dedication to what’s best for Canada and its customary dash of diligent research, Maclean’s picked the country’s leaders in every category over the past 100 years. The best of the best. “Canada,” trumpeted its headline in the business section, “is famous for entrepreneurs. The greatest of them all, Maclean’s believes, was K. C. Irving, the man who built an empire in New Brunswick and, in the process, made himself one of the world’s richest men. ”

I was delighted to find out about K.C., whose corporate enlightenment and creative accomplishments had somehow slipped my attention.

Since the 1990s are the age of the entrepreneur, I am happy to pass on some of K.C.’s entrepreneurial qualifications that were somehow missed by Jack Granatstein, the good professor who wrote the accompanying commentary. I do this in the spirit of public service, which has become a tradition of this page under the convalescing Dr. Foth.

Nothing is more important than to provide role models for today’s bright and bushy-tailed young entrepreneurs. How else can they have a shot at the top slot when Maclean’s repeats its contest in the year 2998?

It’s not that hard.

The first rule is to eliminate your competition. Not some of it; all of it. K.C., for example, was a great champion of the free press, as long as he owned every English-speaking newspaper, as well as most TV and radio stations in the province. When he left the country for Bermuda, the Saint John Telegraph Journal editorialized: “Is New Brunswick richer or poorer because he has taken his leave? Does the sun shine? Is there water in the ocean? Is it dark at night? There are some questions which do not need answers ....”( Actually there were, but the Saint John Telegraph Journal wasn’t about to answer them.)

David Walsh of Bre-X was not on the list, but he and Irving shared at least one attitude important to aspiring entrepreneurs: take the money and run. Taxes are for losers. K.C. abandoned his Canadian residency on Jan. 10, 1972, though he ran his empire with an iron fist for the next 20 years. Except for the $899,156 he willed to Winnifred (his secretary and second wife), his estate of $7 billion was left to a Bermuda Trust with very precise instructions: his sons could not claim the money unless they, too, became non-residents of Canada, to ensure that Ottawa never got a penny in taxes. Another important lesson: it’s much more fun to make your mon-

ey from governments, and then not pay them taxes. Much of Irving’s biggest profits were from his $9.3-billion federal contract to build a dozen patrol frigates for Canada’s navy. His other great money-making source was cutting trees on Crown lands, leased at the most favorable stumpage rates anywhere on earth.

Here again, an important lesson: great entrepreneurs waste nothing. There were even some shore dwellers along the rivers that carried Irving timber to his mills who dared not pick up the odd log that had separated from his rafts for use as firewood, out of fear of being prosecuted for possessing stolen property. Somehow K.C. also had a law put on the books that if one of his logs sank a pleasure craft or fishing boat, he couldn’t be held responsible.

Another clue: never give any money away. K.C. made so few charitable donations that nobody in the region remembers any, but he also wouldn’t allow his workers to contribute. When Philip Oland was running Moosehead Breweries in Saint John, and was also head of the local United Way, he gave K.C. a lift to the airport, and mildly suggested that he allow voluntary payroll deductions for his employees so they could give $10 a month to their community. “K.C. went berserk,” Oland told me, recalling the incident, “he started banging the car’s instrument panel and said he would never allow such a thing.”

Ignore the environment. When his barge, the Irving Whale, sank in the St. Lawrence and began leaking the dangerous heating fluid it had been carrying, K.C. refused to pay the $42 million it had cost the Canadian Coast Guard to raise it.

Make certain your corporate structure is too complicated to follow. When the crew of one of KC.’s tankers, the Irving Ours Polaire, sought union certification, they were literally unable to obtain the name of the Irving subsidiary that owned the vessel and couldn’t proceed with their application.

Control politicians: K.C. supported most New Brunswick Liberals, including Premier John McNair, until he noticed that one of his small bus lines, from St. Anthony in Kent County to Moncton, wasn’t making enough profit. He was overcharging so much that local commuters started to organize car pools. K.C. went to Fredericton and ordered McNair to outlaw car pools. When the premier calmly pointed out that he couldn’t do that, Irving helped throw him out of office by backing his Conservative opponent.

Finally, don’t hire Charlie McElman as your PR guy: “ That Irving empire,” McElman, a New Brunswick Senator once observed, hiding behind his parliamentary privilege, “operates with the power of a lion, the appetite of a vulture, the grace of an elephant, the instinct of a barracuda, and the principles of an alley cat.”

But then, if you were K. C. Irving, you didn’t need PR guys. There was always historian Jack Granatstein.

The industrialist had some basic tenets: eliminate your competition;

never give money away; and taxes are for losers

Allan Fotheringham