The New Canadian Establishment

How will life change when the West takes over?

Calgary boasts of being a singularly commercial place. Everything about its identity and style—from politics to child rearing, sexual congress to chuckwagon racing—is governed by the gravitational pull exerted by its Oil Patch entrepreneurs. Peculiarly, even making money is secondary. Enterprise is the name of the game; your net worth merely provides the entries on your competitors’ score cards.

If the city has a failing, it is its persecution complex, the feeling that the good times only usher in the bad, which perpetuates a decidedly humourless view of the world. The toughest jobs in town belong to the stand-up comics at Yuk Yuk’s Komedy Kabaret, not the whores of Victoria Park.

Despite the community’s urban flavour—Dallas North, not Toronto West—its value system retains the rugged individuality of the open range. Buzzard’s Cowboy cuisine still features an annual Testicle Festival, named for the ubiquitous prairie oyster, harking back to a time when Alberta cowboys branded and castrated their steers. Until the current crash, it was a wonderful town in which to be rich and powerful. The province’s machers thrived on a paradoxical mixture of municipal pride and the terror of obsolescence.

In Calgary, membership in the commercial and social elite is one and the same. You are what you do. And when the paladins of the Petroleum and the Ranchmen’s clubs are asked to define their philosophy, it usually comes down to some variation of “life is a bet.”

Gordon Pitts’s highly relevant and compulsively readable Stampede! The Rise of the West and Canada’s New Power Elite purports to be a personalized probe of Calgary’s future. But it turns out to be much more than that: it expands into an intelligent and curiously credible blueprint of Canada’s future. While Alberta is Pitts’s main reference point, his canvas includes every region, including Newfoundland and Labrador, Ontario, British Columbia and the Territories. As Alberta moves to the forefront of national influence, Toronto is relegated to something of a museum function, mooning over what might have been.

The Pitts scenario visualizes the Calgary-Dominion Bank holding its first annual meeting since its move from Toronto; the wealthy Calgary Flames celebrating their fourth straight Stanley Cup; the Alberta Heritage Fund, with $100 billion bursting its jeans, offering interest-free loans to Ontario for emergency repair work on the crumbling Highway 401; and the University of Alberta attracting its third Nobel Prize winner in a year. Instead of pissing away their oil boom of the pre-crash years, this time Albertans will build on it.

Of course, it may already be a bit late for these rosy predictions to fall into place any time soon. Pitts’s book has been somewhat hijacked by history. Canada’s future, which looked healthy and confident and was built increasingly on resources instead of manufacturing just six months or a year ago, may consist of little more than an economy driven to the wall by a world it never made and can hardly recognize. We are caught having to bail ourselves out of a calamity that requires not only fresh, untainted funds, but also new gods to guard the gates, to reign over a rebirth of fundamental values. Nevertheless, on the sacred capitalist assumption that what goes down must come up, the scenario that Pitts paints is certainly going to materialize as soon as the economy regains ballast, whenever that may be.

And, not surprisingly, the centrepiece of the province’s future as Pitts describes it is the oil of the tar sands, pushing production to a point that it will eventually rank as the world’s second most significant petroleum products source, just behind Saudi Arabia. This is a double-edged sword. With only 10 percent of the country’s population, Alberta is already responsible for more than 30 percent of its greenhouse gas emissions. On a per capita basis, the province emits three times as much as the rest of the country.

“The West will set the agenda,” Pitts predicts. “Canada will regain a vital source of globally scarce commodities, not just oil and gas but uranium, potash, canola and wheat. Whatever the price gyrations, who has these commodities, who controls them and how they are taxed and regulated, that will be the issue which subsumes all others. It is the end of the old Ontario-Quebec Accord, the comfortable nod and wink that have run this country since 1867. While the West still does not have the population, it has everything else—food, energy, science, education and entrepreneurial drive. And its future is inextricably tied to the destiny of the emerging superpower, China, which needs the West’s grain, its oil and commodity resources. But if the West is on top, where exactly is Canada?”

Pitts spends the rest of the book answering that question, and his documentation is surprisingly effective.

Some of Stampede!’s diversionary chapters don’t quite work, such as his reprise of Sir Terry Matthews, the most articulate of our high priests of high tech (Mitel, Newbridge Networks), who has a walk-on part, delivers a rant about technology and the tar sands, then vanishes. The Welsh knight is a national treasure. He just doesn’t quite fit into the book’s supporting cast. His time will come.

Pitts moves to safer and much more compelling ground when he introduces Murray Edwards (Canadian Natural Resources, Edco, the Calgary Flames), the Oil Patch’s ruling guru. Edwards is a genuine Canadian oddity, in that he has almost certainly made more money than any of his competitors, yet he is much more interested in policy formation and furthering the interests of the Liberal Party, which is his unlikely political home. A native of Saskatchewan, Edwards is a hard-core capitalist whose catechism begins with wealth creation but does not end there. He has a lively sense of humour and remains intrigued by the modern world’s bizarre turns and contradictions. He is a man to go tiger hunting with—just don’t get him going on the province’s new royalties regime.

A soul brother—sort of a walking conscience of Calgary’s top business echelon—is Brett Wilson (First Energy), who combines almost dangerously effective philanthropy, supporting causes as diverse as prostate cancer, organ transplants and volleyball, with living life to the full. A merchant banker at heart, he has the disposable charm of a vacuum salesman diverted to mature pursuits. You see him regularly on CBC’s Dragons’ Den. Pitts has a way of making these and other characters come alive. Any city they occupy would be a fun place, bent on a serious purpose.

Another increasingly pivotal Calgary figure is Bob Dhillon, the Sikh investor whose Main Street Equity Corp. has set records by putting together Western Canada’s largest apartment rental empire, its family units, located mainly in Saskatchewan, worth in excess of $625 million, which he expects will lead Canada’s growth curve. He has combined his Canadian operation with the exploitation of vacation properties in Belize, the little jewel of a country wedged into the corner formed by southern Mexico and Guatemala. He will not admit it, but these holdings will eventually overtake the considerable value of his Canadian assets.

Pitts broadens his horizon, as suggested by his title, to include some of the more colourful and dynamic personalities operating across most of the country. The author’s most starkly revealing portrait is that of Danny Williams, the most combative Newfoundland premier since Joey Smallwood and a man he feels would be capable of leading his province out of Canada. “Danny is a classic Newfoundland motor-mouth with a quick wit and a spectacularly controlled coiffeur,” Pitts observes. There are some who feel that Danny is killing his golden chance by playing the part of unbending, uncompromising zealot. The premier responds that his technique is to start off with certain principles, bend his strategy to those principles, then stand, live or die on that. You cannot argue with an ideologue on a Newfie tear. Williams is wildly unrepresentative of the island’s beleaguered citizens, except that he profoundly resents the Churchill Falls giveaway and is determined to get a better deal in the next power grab. That he has gone too far by announcing he will nationalize Abitibi’s local assets is obvious; that he will get away with it is likely. But that Newfoundland and Labrador will thus be placed in a do-not-invest category remains a lively possibility.

Pitts paints British Columbia as little more than Alberta’s decompressing playground, a sort of Muskoka stocked with killer whales. Windermere and the Okanagan lakes qualify as his prime locations, though more adventurous leisure hounds will explore the Gulf Islands and the Sunshine Coast, northwest of Vancouver.

The only entrepreneur with a major growth curve left in that province is Jimmy Pattison, who never stops expanding and seldom fails to strike it rich. He is 80 now, but his itch to grow is barely subdued. If there is one entrepreneur who will be missed, it is Jimmy, because he is the colourful-style capitalist of the movies and is as deep into show business as into turning profits.

Pitts outlines the advantages of the labour mobility agreement signed by British Columbia and Alberta, as well as other treaties freeing the trade, traffic and funds between the two provinces, in effect creating a free trade zone that will be the country’s second largest economy and a template for the future. He advocates expanding the free trade area as far east as Kenora, which would be enough to redraw the map of the country. I hope it happens.

Pitts’s take on Toronto is enlightening because it documents that the current free fall of the province’s manufacturing industries, especially in the auto sector, is no sudden catastrophe but merely the peak of a trend that had been escalating for most of the past decade. Pitts does not make the error of trying to make reality fit his thesis by downgrading Canada’s Empire City, which, after all, has three times the number of people as Calgary, ten times the number of skyscrapers and major league sports franchises, not to mention being the headquarters of the Big Five banks, and is action central of the country’s chattering class. “But Calgary is on the move,” he rightly contends. “It is one of the world centres of energy finance with a critical mass of investment bankers, some of the world’s best oil and gas consultants and engineers. Calgary has all the brains in the right spots for a resource-driven planet.”

Near the end of his book, in a chapter titled “Hollow Men,” Pitts tackles the issue of foreign ownership and how the rampaging Yankee vulture capitalists may sink the Canadian dream. The arguments have been made before, but there is not much point pursuing this brave new world if it belongs to someone else. Keeping score of the unending takeovers of our signature mining properties, the author concludes: “The mining industry will hardly be worth a plug nickel in downtown Toronto.”

Red Wilson (BCE, Nortel), who recently headed a task force on the issue, put it this way: “Do we have what it takes to be the best, or are we content with endlessly bickering over who gets what? … No land on earth has ever been so well-endowed by nature and as successfully developed by the efforts of our forefathers. … [But] we seem to be increasingly dysfunctional.” Pitts introduces a seminal thinker into this essential dialogue, Ken Smith, a director of the major Canadian consulting firm Secor, who qualifies as the new guru and best mind on the issue. “Canada has become the biggest seller of corporate assets in the world,” he contends. “We are living in a world where Canada is blithely handing over the keys to its stores, factories to foreign buyers while we are failing to produce more than a handful of globally active major corporations.”

We live in a cold, large land, one increasingly controlled by outsiders. Most of us are content with surviving the chilly days and getting through the nights intact and ready to face our allotted tasks. And for the next few years, the days will be chillier and the nights longer and darker. All the more reason to read a book like Gordon Pitts’s Stampede! to remind ourselves that this country is worth improving, that we have both the human and natural resources to make those improvements happen, and that regardless of our current problems and tensions, Canada still remains a country blessed by the gods.