OBITUARY
Behind the scenes, Paul Desmarais was a force in Canadian politics
..and of [Chinese Investment in Canada/me]
He never ran for public office, never accepted a seat in the Senate or an appointment as Governor General. Still, Paul Desmarais was a singular political force in Canada for more than five decades. The most powerful francophone in the country, he knew and influenced, in small ways or large, every Canadian prime minister and Quebec premier over the past five decades. He negotiated a business deal with Maurice Duplessis, argued against separation with Quebec premiers Daniel Johnson and Réne Lévesque, helped prime minister Pierre Trudeau open up relations with China by becoming a founding chairman of the Canada China Business Council in 1978 and kept in close touch with succeeding prime ministers, no matter their political affiliation, including Brian Mulroney, Jean Chrétien and Paul Martin.
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The personal was both political and financial for Mr. Desmarais, the Franco-Ontarian takeover artist and corporate strategist who parlayed a failing Sudbury bus company into Power Corp. of Canada, the multibillion-dollar global industrial, financial and communications empire. He died Tuesday night surrounded by his family at Domaine Laforest – his extensive estate with its own helipad and golf course and enough acreage to put some principalities to shame – in the township of Sagard in the Charlevoix region of Quebec. At 86, he remained the controlling shareholder of Power Corp., although he had handed over the daily management of the company to his sons, Paul Desmarais Jr. and André Desmarais, in 1996. With a fortune of $4.5-billion, he was ranked the fourth-richest Canadian by Forbes magazine.
“My family is related to his family through our grandchildren,” said Mr. Chrétien, whose daughter, France, married Mr. Desmarais’s son, Andre, in 1981. By then, the two men had known each other for nearly two decades. “He was a very good friend and a very successful example for everybody,” Mr. Chrétien said. “When people like to complain of the mistakes of the past, Mr. Desmarais was the best example to prove that if you work hard, you can succeed in Canadian society.
“He was a modest man, a great Canadian and I am very proud to have known him for so long,” Mr. Chrétien said.
“I loved him like a brother,” said Mr. Mulroney, a close friend for nearly 50 years. “He was one of the most significant players in Canadian economic history.”
Mr. Mulroney said that Mr. Desmarais “believed that happiness comes from sharing it,” so he endowed hospitals, universities and artistic initiatives. A dedicated art collector whose tastes ranged from Jean-Paul Riopelle to Cornelius Krieghoff, he gave a $ 10-million donation to the 1991 capital campaign of the Montreal Museum of Fine Arts and had the pleasure of seeing his father’s name, Jean-Noël Desmarais, mounted on the Moshe Safdie-designed pavilion.
Paul Martin said he was “a young lawyer who had decided he didn’t want to practice law” when he joined Power Corp. in 1966. Less than two years later, Mr. Desmarais acquired the company, and asked Mr. Martin his intentions. “I want to quit and go off on my own,” was the reply. To which Mr. Desmarais said: “Why don’t you hang around for a couple of months? I’m sure I can keep you busy.”
Thirteen years later, Mr. Martin was still there, principally because of his boss. “I had such huge respect for him. He was a tremendous visionary and his integrity was beyond question,” he said. “He had a global vision. He wanted to build a great Canadian company, but he wanted it to have a global footprint. He was consistently one step ahead of where conventional thinking was, so for me it was a tremendous 13 years,” said Mr. Martin, who ended up buying Canadian Steamship Lines, the company he managed for Mr. Desmarais, from Power Corp. in 1981.
'A MODEL FOR MANY YOUNG FRENCH-CANADIANS'
A little more than six feet in height, handsome, with a commanding gaze, Mr. Desmarais liked playing cribbage and poker and admired innovative and powerful leaders. “I respect greatly men of strong personalities,” he told l’actualité magazine in 1974. “If I had to name some, I’d say Winston Churchill, Charles de Gaulle, Franklin Roosevelt, Mao Zedong.”
An economic conservative and a committed federalist, Mr. Desmarais felt a personal obligation to demonstrate that a francophone could be a financial success within a united Canada. “I feel,” he told journalist Peter Newman in a rare interview in the 1970s, “that as a Quebecker involved in the national economy, I have an added responsibility to succeed. A successful French Canadian destroys the separatists’ argument that success is impossible within Canada.” He felt keenly the responsibility to his shareholders, of course, but also to employees, colleagues and even, in his own view, other French-Canadians.
“He was a model for many young French-Canadians because he always said if I can do this, so can you, but what is required is a united Canada,” said Mr. Mulroney, pointing out that while Mr. Desmarais had business interests in China and Europe and around the world, he made certain that his corporate empire was based in Canada.
“While he came from Ontario,” said former provincial premier William Davis, “and while he became a Quebecker, he was a Canadian, first, last and always.” The two men, who had met when Mr. Davis was education minister in the 1960s, had serious conversations about national politics in the late 1970s and early 1980s, during the turbulent era of the first Quebec referendum and the patriation of the Constitution. “He never hesitated to speak out about the need for Quebec to be a part of Canada,” Mr. Davis said.
They kept in touch after Mr. Davis left politics, partly because Mr. Desmarais appointed him to the board of Power Corp. and partly because they had become good friends. That gave the ever-discreet Mr. Davis several opportunities to observe the way Mr. Desmarais could invite politicians who privately loathed each other to the same dinner table or family celebration – although he seated them at opposite ends of the table.
“He never hesitated to bring people together who had different points of view, including leaders of the separatist movement and people of different political persuasions, when he thought it might be helpful,” he said. “That just shows the kind of man he was.” Mr. Davis said although Mr. Desmarais was modest, he was never afraid to state his personal views publicly.
“The easy thing to think about Paul is that he has the politicians in his pocket, that he’s a sort of master of marionettes,” Michael Pitfield once said. Mr. Pitfield, clerk of the Privy Council during the Trudeau era (and later a senator) became vice-chairman of Power Corp. in 1984. “But he’s not. He’s a player. He never disengages; he never withdraws from the arena. He made an enormous fortune by age 35 and has ever since been engaged in the active governance of this country. Most people automatically assume that Paul’s policy involvements are designed to make him richer, that he tries to control people and events to get some desired, selfish result. In fact, he’s an active participant, using his power base to press for what he thinks are desirable policies. It’s very important to understand that distinction.”
Mr. Desmarais suffered a stroke in 2005, but otherwise he was in good health until the last few months, according to a family spokesperson. There will be a private funeral in Charlevoix, followed by a public memorial service, probably in Montreal, at a later date. In September, he celebrated his 60th wedding anniversary with his wife, Jacqueline Maranger, a young woman from Sudbury. “She was the sweetheart down the street,” said Mr. Mulroney, describing them as a “couple in love from the first time he saw her.” Besides his wife, Mr. Desmarais leaves his two sons and two daughters, Sophie and Louise, several grandchildren and his extended family.
AN EMPIRE THAT BEGAN WITH BUSES
Born Jan. 4, 1927, in Sudbury to a middle-class family, he was one of eight children of prominent lawyer Jean-Noël Desmarais and his wife, Lébéa Laforest. Mr. Desmarais grew up bilingual, speaking French at home and English in the community. He went to a local high school and then attended his father’s alma mater, the University of Ottawa, earning a bachelor of commerce in 1949. He entered Osgoode Hall Law School in Toronto but, after two years, he was restless and wasn’t certain he wanted to be a lawyer like his father. Besides, after three tries he still hadn’t passed the examination in legal history.
He dropped out, went back to Sudbury and decided to find out whether he could succeed in business before settling on a law career. For a dollar, he bought Sudbury Bus Lines, an unprofitable company that his parents owned and were about to sell. By taking control, he saved the jobs that the drivers and mechanics had thought they were about to lose. That earned him their loyalty and hard work as he tried to turn the company around.
By 1955, he had defined the company’s core business, rationalized its management and operations, settled its debts of about $350,000, banked $100,000 in profits and hired professional managers. He was 28. Law school was forgotten now that he had found his passion for taking over failing companies, making them profitable, consolidating his position and moving on to bigger holdings.
He was ambitious, but not greedy, interested in building companies and recruiting managerial talent that would help him build the human resources infrastructure he needed to achieve his business goals. Eventually he expanded his geographical reach to Ottawa and then to Quebec. In 1955, he heard that another bus company, Gatineau Bus Lines, which serviced the Ottawa-Hull region, was for sale. Mr. Desmarais wasn’t able to raise the money until the owner, who was eager to sell, persuaded the Royal Bank to lend Mr. Desmarais the money to buy the company. He moved to Ottawa with his wife and son Paul Jr. (who had been born in 1954) and lived there for the next four years.
Mr. Desmarais’s next acquisition was Quebec Autobus for approximately $2-million in 1959. That required political as well as financial finesse because he needed to get transport regulatory approval, which meant dealing with Maurice Duplessis, then-Quebec premier. When the two men finally met, Mr. Duplessis pointedly referred to the younger man as a franco-Ontarian rather than a French-Canadian from Ontario. Mr. Desmarais was not deterred and eventually persuaded the premier to let him buy the bus company with one proviso: “If you guarantee that my civil servants arrive on time, I’ll grant you your bus line.”
A year later he had turned the operation around from a loss of $60,000 to a profit of $350,000. In 1960, he moved his family to Montreal. From bus companies he moved on to insurance and communications companies, forming Les Journaux Trans-Canada in 1967, eventually acquiring a series of newspapers and television stations including La Presse, Montréal-Matin and La Tribune in Sherbrooke. The following year he took control of Power Corporation of Canada in a complicated reverse takeover that saw him running the company and owning slightly more than 50 per cent of the shares.
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