Atlantic Hustle

The regional origins of undertakings from the Bricklin to McCain Foods.

Atlantic Canada is often presented as a paradox. A have-not region plagued by failed ventures and out-migration, it nevertheless nurtures world-class entrepreneurs such as K.C. Irving, Frank Sobey, Harry Steele and Harrison McCain, who remained rooted in their communities. Harrison McCain: Single-Minded Purpose and Failures and Fiascos: Atlantic Canada’s Biggest Boondoggles explore both sides of this paradox and, in so doing, document the extent to which a regional mindset shapes perceptions of what really happens in Atlantic Canada.

In Failures and Fiascos, popular historian Dan Soucoup takes his readers on a fast-paced ride through 25 regional flops, beginning with the Intercolonial Railway’s “long and winding” route between Moncton and Halifax. The Intercolonial, its construction mandated by the British North America Act, was the first major public works project undertaken by the new Dominion of Canada. Although the Intercolonial was certainly steeped in politics, its peccadillos paled in comparison with those of its western counterpart, the Canadian Pacific Railway, which brought down Sir John A. Macdonald’s government in 1873 and nearly bankrupted the national treasury before it was finally completed in 1885. Even in its boondoggles, the Atlantic region, it seems, falls short.

The most remarkable 19th-century failure showcased here involved an effort by a few Maritime lumbermen to reduce the cost of delivering unprocessed logs to their American market by binding them in a giant raft and drifting them to their destination. After two unsuccessful attempts, a 180-metre “floating cigar,” consisting of 24,000 logs weighing 11,000 tonnes, made its way from the Bay of Fundy to New York in 1888. The experiment worked but proved less profitable than its backers had hoped. Sea captains who ran afoul of the free-floating remains of one broken raft off Nantucket probably breathed a sigh of relief.

Eighteen of the episodes in Soucoup’s book focus on the last half century when interventionist governments tried to grow new-age industry in the Atlantic region. In the early years of this period, white elephants appeared with unnerving regularity as even Robert Stanfield, the level-headed premier of Nova Scotia, fell victim to schemes to manufacture leading-edge stereo equipment (Clairtone Sound, which was promoted by Ol’ Blue Eyes himself, Frank Sinatra) and a heavy-water plant to supply the burgeoning atomic energy industry. Neither initiative turned out well. Malcolm Bricklin, meanwhile, convinced Premier Richard Hatfield, a playboy in the making, to subsidize the production of a fancy gull-wing sports car in New Brunswick. Now a collector’s item, the Bricklin was plagued by design and production problems that ensured its demise. In at least one case, not all was lost. Joey Smallwood’s dream of building an oil refinery at Come By Chance helped to destroy his government in 1972 and it collapsed in bankruptcy in 1976, but this fiasco had a sequel that is rarely trumpeted: the refinery, nicknamed “Fat Chance,” has been successfully operating under a variety of owners since 1987. Many of these initiatives were not boondoggles in the narrow definition of the word, but they do underscore the tendency of both public and private investors to continue funding losing ventures long after the plug should have been pulled.

Few areas of Canada dwell on their fiascos to the extent that the Atlantic region does, although every province and territory has its full share. Soucoup could just as easily have focused on Canada as a whole and offered the same reasons for failure: “the combination of lots of public money plus slick operators,” along with bad luck, bad management and bad timing. The spectacular collapse of Argus Corporation, Campeau Corporation and Dome Petroleum—all of which received state support—come to mind. A list of Canadian companies, -successful or otherwise, that have not benefitted from government assistance would be very short indeed. Thus, while Soucoup’s book makes immensely entertaining reading, more might have been said about the larger context in which improbable schemes, corporate malfeasance and political -corruption emerged in the industrial age, and how, if at all, the Atlantic region is unusual in these -matters.

Harrison McCain was adept at securing government subsidies, but his success did not depend on them. A hard-driving individualist in the mould of K.C. Irving, by whom he was once employed, McCain was a brilliant entrepreneur and the public face of the frozen food empire that he built with his brothers (Wallace, Robert and Andrew) in Florenceville, New Brunswick. In Harrison McCain: Single-Minded Purpose, his story is well told by fellow New Brunswicker Donald J. Savoie, Canada Research Chair in Public Administration and Governance at the Université de Moncton. With unparalleled knowledge of Canadian politics and regional development, Savoie rises above the minutiae of McCain’s entrepreneurial career to explore the environment that shaped the man he called a close friend. The result is predictably satisfying, in part because it says as much about Savoie’s interests as it does about McCain. I hasten to add that this is not a criticism. As most scholars readily attest, writers cannot avoid bringing their own world view to their analyses. It is a tribute to McCain that he attracted a biographer with such a broad grasp of his subject’s geographical and emotional landscape. Proud New Brunswickers, both men shunned invitations to earn fame and fortune elsewhere, choosing instead to stay in their native province, which, as it turned out, in no way blunted their achievements.

In the first two thirds of the book, Savoie offers a sympathetic narrative of his friend’s life, which was inevitably bound up with the trajectory of McCain Foods. This is not a “rags to riches” story, or even an unusual one in the annals of Canadian business history. McCain’s ambitious Irish Protestant ancestors began farming in the upper reaches of the Saint John River in the 1820s. By the 20th century, the family was well established in commercial farming, with markets for their potatoes in Great Britain, the United States, the Caribbean and Argentina. The McCain men also cultivated political connections in high places and Harrison’s grandfather served two terms in the provincial legislature. When the McCain brothers incorporated their frozen food company in 1956, they were university graduates building on their family’s previous successes. And, like their forebears, they were attuned to the potential of the times, becoming “globalizers” before the term was coined. Within a decade, they had factories in Great Britain and they continued to plow their profits back into the company in an effort to achieve world dominance of the food processing industry. It was the entrepreneurial game that mattered to Harrison McCain, not the accumulation of wealth, but he was spectacularly successful at both. McCain Foods now operates 55 plants on six continents and supplies one third of the global french fry market. En route to pursuing vertical integration, McCain Foods also spawned a major trucking firm (Day and Ross) and an equipment manufacturing company (Thomas Equipment).

Asked the secret of their success, Harrison McCain always answered “good luck, good timing, right place.” Savoie fleshes out this succinct summary by exploring the easy banking and public–private relationships that served McCain Foods well in its early years, the rise of the fast food industry (McDonald’s is the company’s major client) and the development of government-funded regional development strategies that made plans for expansion easier to execute. While the times were right, Savoie, an adherent of Schumpeter’s view of historical change, argues that individuals are essential to the ultimate outcome. It is hard to fault him on this conclusion. By all accounts, Harrison McCain overcame the many obstacles he encountered by the sheer force of his dominating personality.

Throughout the narrative, Savoie circles around the relationship between Harrison and his younger brother, Wallace, who, we are repeatedly reminded, was an equal partner in the enterprise. Brotherly relations reached a breaking point in the early 1990s over succession planning in the family-run business. Although Harrison characteristically prevailed in the feud that engulfed the entire family, his triumph came at great cost. Wallace, along with his sons, Michael and Scott, left the company and teamed up with the Ontario Teachers’ Pension Plan to buy Maple Leaf Foods in 1995. Savoie shies away from delving too closely into the details of family interaction in this troubled period and he is also cautious in assessing McCain’s relationship with his long-suffering wife, Marion, commonly called “Billy,” who raised their five children while Harrison spent much of any given year on the road. As the daughter of another busy man, former premier of New Brunswick John B. McNair, she seems to have been well schooled to her lot in life.

Savoie not only knew McCain personally but also had access to his papers and conducted scores of interviews with those who knew him. When the author lets McCain speak for himself, the result is often amusing. One fundraiser from Toronto, for example, offered McCain naming rights for what became Roy Thomson Hall if he made a donation of $5 million. He said he could do that, but only if the building was named Florenceville Dance Hall. The conversation ended there. As this story suggests, McCain was soft on Florenceville, which remained his base of operations until he died in 2004. Against frequent advice to the contrary, McCain focused many aspects of the company, including facilities for research and data collection, in his hometown, now one of the most multicultural rural communities in Canada. His successors are less committed to this sense of place. Over the past decade more functions of the company have moved to Toronto and elsewhere.

Harrison McCain was not only a proud New Brunswicker. He was also a proud Canadian and both a large and small “l” liberal. Convinced that free trade with the United States would hollow out Canadian industry, he worked hard to defeat the Mulroney government in the 1988 election. McCain, unlike some wealthy entrepreneurs, had no objection to paying his fair share of taxes, believing that the welfare state helped to reduce human misery. A generous philanthropist, he helped to sustain the coffers of a variety of local, regional and national institutions. He also characteristically let public opinion and savvy marketing strategy dictate that his factories would not process genetically modified crops. As for government subsidies, McCain took great pride in having built factories in rural areas across Canada with state assistance and noted that “if government is stupid enough to put money in my hands, I am stupid enough to take it.”

The final chapters of the biography gather up stories about McCain, his family and his friends that would have bogged down the earlier narrative and give Savoie a chance to address the question that bedevils anyone trying to advance the economic prospects of the Atlantic region: could there be another Harrison McCain? He concludes it is possible, but highly improbable. Entrepreneurs, Savoie argues, can come from anywhere, but they are less likely in the 21st century to come from rural and marginal areas of Canada than they were in the 1950s. Not only are regional development and equalization programs now geared toward the industrial heartland and resource-rich Prairies, but also state and banking bureaucracies are so centralized and hide-bound that they can no longer indulge in the easy give-and-take relationships that served the interests of the McCain brothers. Savoie concludes that McCain “had the tenacity to pull against gravity,” but gravity’s tug to the centre is much stronger now.

Like his subject, Savoie is a fast-forward kind of guy and its shows in his prose, which is more hurried and repetitious in this book than it usually is, but that does little to mar this thoughtful biography, which offers a wealth of insights into the history of Canadian business.