Special Report

THE NEW-CANADIAN ESTABLISHMENT

BROUGHT TO YOU BY Cadillac

Peter C. Newman May 23 2005
Special Report

THE NEW-CANADIAN ESTABLISHMENT

BROUGHT TO YOU BY Cadillac

Peter C. Newman May 23 2005

THE NEW-CANADIAN ESTABLISHMENT

Special Report

BROUGHT TO YOU BY Cadillac

PETER C. NEWMAN

FIRST IN A SERIES

Alexander Shnaider

THIRD WAVE REVOLUTION

The new-Canadian establishment comes from varied and distant lands

THE ORIGINAL CANADIAN Establishment dates back to the Family Compact of the British-born pseudo-aristocrats who ruled Upper Canada in the early 19th century. The activities of this Jurassic elite that eventually spread across the country were recorded with careful diligence in ledger books. Clerks with fingerless gloves recorded the acreage of fallen timber, the depth of mine shafts, the spread of harvested grain. They measured human sweat and sinew in terms of mercantile profit directed into the pockets of Donald Smith, George Stephen and other storied inhabitants of Montreal’s Golden Square Mile, who built the railways; Winnipeg’s Richardson family, who sold the grain; Vancouver’s H.R. MacMillan, who chopped down the Pacific forests; as well as Harry Oakes and others, who relieved the Canadian Shield of its mineral riches.

They were a practical lot. Together they controlled most of the young nation’s profitable enterprises. They were fiercely independent, but operated as a club by sharing markets, knowledge and keeping away outsiders. They invented insider trading, feathered each other’s nests with Episcopalian grace, maintained their workers in patronizing insecurity and, with the instincts of an unregulated oligarchy, gleefully forced competitors out of their misery. They thought themselves valuable and loved; in fact, they were necessary and tolerated. They were nurtured by government subsidies, traded their political allegiance for handouts while Ottawa turned a blind eye to their excesses. The rich and powerful kept out of sight and sound, lived in mansions at the far end of curving driveways and perfected a self-effacing, innocent air that kept the parvenus at bay.

Most of this early establishment’s decisions evolved from the style in which they allowed things to happen. Pleasure and extravagance were made to seem effortless rather than planned, ordinary instead of ostentatious. They took everything for granted and communicated through raised eyebrows and shared silences. They treated servants as mobile furniture and dropped their winter coats without a backward glance, certain there would be someone there to catch them. Everybody was somebody’s cousin; kinship reigned supreme.

The power of that original WASP establishment faded as its world ceased to be exclusively its own. Second and third generations diluted their proprietorships, as they came under the control of surrogate managers, distant cousins or spoiled first sons. They forgot the first rule of any establishment: that power must be harvested as carefully as it is seeded. Then they forgot the second rule: any elite that fails to renew itself is bound for extinction. The ultimate demise of that original power clique was a long time coming. It coincided with the recent fall from grace of Conrad Black, who had been their last, unofficial dean. His tortured journey into becoming a weapon of mass self-destruction sealed his fate as their role model.

The first serious disruption to the old elite’s tranquil possession of power was the arrival, dating back to the 1940s, of a wave of European entrepreneurs who were fleeing Hitler and, later, the convulsions of post-war reconstruction. They came to Canada with a view of commerce that had less to do with tradition and everything to do with survival, utilizing the same hard-edged skills that had allowed them to escape the continent’s upheaval. These post-war immigrants included Peter Munk, who knew

nothing about record players, gold mining or real estate, but revolutionized all three industries; Frank Stronach, who made fortunes having his way with auto parts and shareholders; the Reichmann brothers, who built Canada’s most impressive urban forest of skyscrapers; Stephen Jarislowsky, who minted a fortune while acting as the conscience of the marketplace; the Bentleys, Prentices and the Koerner brothers, who found new ways of exploiting the forests and pioneered serious philanthropy in British Columbia; Peter Nygârd, who created his own brand of hedonistic capitalism; Gus Van Wielingen, who helped modernize the financing of the oil patch; Tom and Sonja Bata, who sold shoes to the world from their Canadian base; and so many others, including Paul Desmarais, who was not a European, but did business in a cosmopolitan way that set new boundaries.

This group turned out to be Canada’s first meritocracy, having to break down the establishment’s ingrained anti-Semitic and often just anti-foreign or anti-French barriers. They were the first of the Canadian elite to gain legitimacy without having to produce proof of having attended private schools, having the right parents, marrying the right women or joining the acceptable clubs. But since they failed to establish strong second-generation inheritors to perpetuate their empires, they made room for today’s Third Wave, now quietly moving in to assume the levers of command.

These new paladins hail from varied and distant lands, representing non-Western cultures and religions, stretching from agnostic Russians to Muslim Lebanese, and Buddhists from China to Hindus and Sikhs from India. The most vital and daring entrepreneurs to hit these shores in more than half a century, they are no transients. This Third Wave has set down personal, family and fiscal roots. Their common language is money, many camels’ worth. But theirs is no passing fancy. They reckon their success equally by their bottom lines as how quickly they qualify as worthy Canadians. Or to be more precise, how quickly they gain recognition as members of the establishment or, to be raw to the bone, be nominated for Orders of Canada. Meanwhile, they are tapping astonishing new sources of energy and influence from their Canadian tranquility base.

They are well aware that international capitalism has no fixed address and have turned that into an opportunity by deciding to establish their headquarters in our chilly latitudes. In the process, the Third Wave is moving into power and reshaping the anatomy of Canada’s Establishment. It’s happening because the members of this post-modern elite realize that the most valuable commodity these days is information. And that can be gathered, stored and analyzed anywhere, flowing as it does, through Internet, fibreoptic daisy chains and private satellite uplinks. But the question remains, why here?

They are here because they have discovered an aura of harmony —Gomery inquiry notwithstanding. They appreciate that this country is protected by its non-aggressive status among world players. Canada is a new and welcome sensation for them. This particularly true when they travel with our dark blue passports and find some fellow Canadian in some distant airport lounge, anxious to discuss nothing more vicious than the weather. Here, they can

luxuriate in relative peace, build new fortunes and multiply existing ones. At the same time, they have access to North American technology without the baggage ofU.S. citizenship, which involves being burdened by ideological quarrels not of their making.

Being Canadian means being profitably neutral, and they love it. Most of these newcomers have taken their adopted land to heart, are proud of being Canadian and are contributing through political activism, the support of community projects and increasingly generous philanthropic donations. They are no innocents, bearing the scars of their homelands’ cruel histories. They know that empires dissolve, cities crumble, industries vanish, countries disappear. But they are also aware that establishments abide—not as they once were, or should have been. But in the best Darwinian tradition, they mutate to fit the times, renewing themselves like snakes, the old body in a new skin. The newcomers are beginning to form a core group within the establishment, testing its boundaries. That’s why this third establishment wave is

potentially so significant. Its most prominent leaders will be featured in a series of profiles, the first of which appears in this issue.

Having studied the various incarnations of the Canadian Establishment for the past three decades, I have learned what the admission rules áre, and how they have changed to meet the times. I have also met and know members of this compelling new wave of newcomers, and my reaction to their elitist aspirations is simple: we should be so lucky.

I am convinced they will succeed in their quest for pivotal influence in shaping Canada’s future. They share the quality that Charles Darwin long ago isolated as the essential characteristic for survival of the species. The subtle Darwin defined the attribute of the superior species as being the “most adaptable.” No more apt description applies to the ambitious, if secretive, members of the Third Wave. It is their remarkable ability to adapt to their new surroundings that will eventually endow them with power and glory, Canadian style. They are about to start their engines.