The Patriotic Executive

“Canadian nationalism! How old-fashioned can you get?” E.P. Taylor, the legendary Canadian entrepreneur, reflected the view of many businesspeople in his dismissal of nationalism. For the business community, nationalists are unrealistic and hopelessly out of touch. Parochial and xenophobic, they do not understand that their naive proposals to limit trade and investment flows would have destructive effects on the economy. Nationalists have been equally contemptuous of corporate executives, believing that they value only money, never realizing the importance of independent economic policies. Businesspeople might have large pockets, but they also have small minds. In Made in Canada: A Businessman’s Adventures in Politics, Alastair Gillespie recounts how he managed to be both a highly successful corporate leader and a prominent nationalist voice in Pierre Trudeau’s Cabinet.

Gillespie was born to a life of entrepreneurship. One of his ancestors was a fur trader who came to Canada in the late 18th century; others were bankers and mercantilists. Business was in Gillespie’s blood, but his story was not characteristic of the Toronto business elite. Born and raised in Victoria, British Columbia, Gillespie has always considered himself a westerner, even after spending most of his life in Ontario. Like much of the anglophone business elite of his generation, Gillespie served in the military during the Second World War. Afterward, he went off to study business at McGill University. Instead of then finding a place in a Toronto or Montreal firm, Gillespie accepted a Rhodes scholarship to study politics, philosophy and economics at Oxford.

When he returned to Canada, Gillespie was offered two positions, one at the insurance giant Sun Life, the other at the Toronto publishing firm of W.J. Gage and Co. Although Gage probably offered a lower financial reward in the long-term, its smaller scope would allow Gillespie more of a “chance to influence operations.” It was not the first time that Gillespie chose to make a sacrifice for a non-financial objective. His judgement was shrewd; in less than a decade he was Gage’s vice-president of operations.

It was as a senior executive at Gage that Gillespie first met Walter Gordon, one of the country’s top talent scouts. Gage was a client of Gordon’s accounting firm, Clarkson Gordon, and of his management consulting practice, Woods Gordon. Gillespie impressed the older man, who shared his interest in public affairs. In 1963, Gillespie become vice-president of Canadian Corporate Management, the small conglomerate that Gordon had created with a few other wealthy investors.

On the surface, Gillespie and Gordon were similar. Both were successful businesspeople and nationalists. Both were active in Liberal Party politics and would become prominent Cabinet ministers, Gordon in Lester Pearson’s government, Gillespie in Pierre Trudeau’s. But there was a significant difference between the two men. Walter Gordon never fully reconciled his nationalism with his business interests. In his memoir, Gillespie records his great respect for Gordon, but notes a contradiction between his mentor’s business and political careers. Gordon repeatedly lamented the loss of Canadian firms to foreign buyers, but he himself made a fortune by selling companies to wealthy Americans.

Moreover, Gordon was preoccupied by the question of ownership. He proposed to tax the takeover of Canadian firms and increase the tax rate on dividends that those firms paid to Canadians. Gillespie was troubled by the punitive nature of these proposals and was concerned more about the performance of Canadian firms than about their ownership. Government policy should aim to improve Canadian companies to help them compete internationally, instead of shutting them off from competition. Rather than trying to resist the growing power of multinationals in the Canadian economy, a policy that could only fail, the government should concentrate on helping Canadian firms adapt to compete in an increasingly global economy. This meant that government should encourage innovation and research. Canadian firms should develop new technologies and endeavour to process Canadian raw materials before export.

As minister of industry, trade and commerce in Trudeau’s government, Gillespie was responsible for the Foreign Investment Review Agency. Yet Gillespie’s view of FIRA differed sharply from that of other nationalists. For Gillespie, it was not about simply saying yes or no to proposals for new foreign investment in Canada, but rather FIRA was part of a bargaining process to improve the role of foreign capital in Canada’s development. This position led him into direct conflict with the editorial writers at the Toronto Star, Mel Hurtig and other prominent nationalists. Gillespie considered them “unreasonable and even irrational” on the issue of foreign investment and thought their restrictive policies “would have been destructive to Canada’s interests.” “Look at the country,” Gordon once told Gillespie. “Parliament needs businessmen as well as lawyers.” Still suffering the aftershocks of the first MBA president of the United States, George W. Bush, we might find it hard to accept a larger role for corporate executives in the political realm. Yet Gillespie showed the value of his experience in Ottawa, a city where few bureaucrats or politicians knew much about business. Gillespie’s knowledge allowed him to assess business proposals, meaning that he could review a takeover application quickly, in contrast to his successors who had difficulty with the foreign investment review process. While bureaucrats and politicians talked of a national industrial strategy, Gillespie pragmatically pursued a sectoral approach, tailoring policies to fit each industry.

Gillespie was never representative of the business community. With the notable exceptions of Brian Mulroney, Paul Martin and very few others, Canadian politics does not attract major corporate executives. Businesspeople are usually unwilling to take a large pay cut to jump into politics and lack the patience necessary to deal with the electoral process and the bureaucracy. Gillespie saw politics as a noble calling, one that was worth the sacrifices. And for Gillespie the sacrifices were real. When he ran for Parliament in 1968, he had a stock portfolio worth $1 million; when he was defeated in 1979, he discovered that it was worth half that. There were no funds in the late 1960s for members of Parliament to open constituency offices, so Gillespie paid for his out of his own pocket.

Gillespie also differed from his colleagues in the corporate world in that he favoured responsible enterprise over free enterprise. The market should be open, but corporate boards should feel an obligation to customers, employees and the community, not just to shareholders. Government should act as a countervailing force against the power of big business, particularly the multinationals. Gillespie believed that government should step in when the free market failed. In his time, the federal government bought de Havilland and Canadair from their foreign owners and held on to them until a domestic buyer could be found. Eventually, Bombardier bought Canadair, which, as Bombardier Aerospace, is now one of the largest aircraft manufacturers in the world.

As Gillespie remembers it, Trudeau was an enigma, even to his senior ministers. He gave his Cabinet members a large degree of autonomy, a latitude that must seem strange in Stephen Harper’s Ottawa. Trudeau was suspicious of nationalism, but sensitive to the political situation in the early 1970s and willing to experiment with moderate measures to deal with the challenges posed by the multinational firms. Yet, in the mid to late 1970s, Trudeau seemed to lose his interest in politics, becoming increasingly aloof. Gillespie’s description of the prime minister mirrors that in the recent best-selling biography of Trudeau by John English, who contributed the foreword to Gillespie’s book.

Throughout his political career, Gillespie succeeded in promoting both nationalism and good business principles. He bridged the divide by being neither a typical nationalist nor a typical business-person. Today, in Stephen Harper’s Canada, that brand of nationalism is a moribund force.