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From the archives

The Trust Spiral

Restoring faith in the media

Dear Prudence

A life of exuberance and eccentricity

Who’s Afraid of Alice Munro?

A long-awaited biography gives the facts, but not the mystery, behind this writer’s genius

Book Value

Redemption, shame and the bargain-bin sale of a cultural icon

Kenneth Kidd

The Handover: How Bigwigs and Bureaucrats Transferred Canada’s Best Publisher and the Best Part of Our Literary Heritage to a Foreign Multinational

Elaine Dewar

Biblioasis

376 pages, softcover

ISBN: 9781771961110

In 2016, while researching her new book, The Handover: How Bigwigs and Bureaucrats Transferred Canada’s Best Publisher and the Best Part of Our Literary Heritage to a Foreign Multinational, Elaine Dewar interviewed retired accountant Ronald Scott. Years earlier, while at Ernst & Young, Scott had penned an opinion on the market value of Canada’s most venerated publisher, McClelland and Stewart. Developer-turned-publisher Avie Bennett had just given a 75 percent share of the company to the University of Toronto, and Scott’s valuation would help dictate the size of the charitable receipt Bennett would get for tax purposes.

Dewar wisely brought along her copy of Scott’s opinion, the most salient point of which was that Random House was paying Bennett $5.3 million for the other 25 percent of M&S. Hence the $22.3 million valuation that Scott put on M&S as a whole, which he insisted was “a fairly conservative value,” and one that gave rise to a tax receipt of roughly $15.9 million going to Bennett’s company, First Plazas. If federal tax authorities had challenged the numbers, Scott added, “I’d have fought them tooth and nail. Because it’s defensible … It’s a warranted opinion.”

Near the end of the interview, Scott had a query of his own: “Why do you care?” Dewar confides at one point in her book: “The truth is I was no longer sure why I cared.” This comes at page 230, and readers will be forgiven for wondering the same thing much, much earlier. By this point, Dewar has already led us on a very long journey. It is full of facts initially left undisclosed by participants in the McClelland and Stewart saga, obfuscations and contradictions revealed by Dewar’s admirable doggedness in getting to the bottom of what happened. This is as much a story about getting the story as the thing itself. So we end up with lines like “This email also confirmed that Avie had told me the truth.”

To understand the “why do we care” question, and Dewar’s persistence, a little background is needed. Dewar is best known for a famous dustup over her 20,000-word Toronto Life story about the Reichmanns, which appeared in 1987. The family, of Olympia and York fame, took grave offence at Dewar’s portrayal and sued, seeking $102 million in damages. Before that case had even gone before the courts, her story was rejected as an entry for the business writing awards then sponsored by the Royal Bank of Canada. In sympathy for the principle at stake, those of us then toiling for the Globe and Mail and the Toronto Star withdrew our own entries and staged a mock event—the Royal Bunk None-of-Your-Business Awards, held in the “Prestigious East Lounge of the Spadina Hotel,” a sawdust dive with a lingering “Ladies and Escorts” entrance. The case against Dewar, whom I have never knowingly met, dragged on for years and, once the magazine’s insurance money ran out, was settled in the Reichmanns’ favour.

In 1992, inspired by Dewar’s travails and by her own tangles with the Toronto Bronfmans, former Globe journalist Kimberley Noble crafted a little book, Bound and Gagged: Libel Chill and the Right to Publish, put out by HarperCollins. In it, she described the way lawyers for the subjects of investigative stories object and stall and try to impoverish any writer or media outlet that dares look at them with critical eyes. “We get the runaround: what information we do get is jealously guarded, doled out in bits and pieces, often disguised or distorted,” wrote Noble. This game goes on, eventually via the courts, to make sure that “by the time the matter’s resolved it has gone on too long to be relevant to anybody but the people stuck with the bills.”

Libel chill was a huge issue in the 1980s, back when business stories increasingly became narratives about human nature, not simply a bland recitation of closing prices on the Toronto Stock Exchange. That chill continues, dispatched by the powerful, engendering what often amounts to a “fight or flight” response in its targets, a cold analysis of risk and reward. It has scarred many a writer.

As it happens, Dewar’s battle with the Reich­manns came at a time when Canadian book publishing was being rocked by international takeovers, a broader story that I covered for the Toronto Star. Figuring out who would end up owning which Canadian subsidiary became a weird parlour game. Fitzhenry and Whiteside, Holt, Rinehart and Winston of Canada, Les Éditions HRW, W.B. Saunders, Prentice-Hall Canada, Copp Clark Pitman, Carswell, Doubleday Canada, Bantam Books Canada, Ginn and Co.—all served as minor luggage in global takeovers. So Dewar’s book is a kind of synthesis, combining her own frustrations over corporate secrecy and libel chill with lingering worries about Canadian culture. Who will publish stories about Canadians, by Canadians? Who should control the industry, Canadians or foreign conglomerates?

The latter questions are hardly new. Since the end of the Second World War, sundry government commissions have looked at the arts in this country and proposed ways to boast Canadian content. As Dewar writes: “By the late 1960s, nationalist ideas had become very attractive to the English-speaking boomer generation—a generation so large and volatile that it decided elections.” This is a bit sloppy. According to David Foot, in Canada, the first baby boomers were born in 1947, so they were just turning 20 in Canada’s centennial year, and the voting age would not be lowered from 21 until 1970. The peak years of the baby boom were actually 1960 and 1961, so the electoral clout of those boomers would not come until much later.

But it is fair to say the boomers were a big part of the equation in the mid 1980s, when the government of prime minister Brian Mulroney brought in the so-called Baie Comeau policy. This stipulated that, should a Canadian-based publishing company or subsidiary be taken over—either directly or indirectly in the wake of an international merger—a foreign buyer must find a majority Canadian partner for the subsidiary within two years. At the time, the Association of Canadian Publishers estimated the industry was only 20 percent Canadian owned; the policy’s aim was 50 percent.

As if in punctuation, McClelland and Stewart, an ancient icon of Canadian publishing, was on the rocks yet again. It lost an estimated $1.2 million in 1985 and was rumoured to have $7 million in debt on its books, some of that guaranteed by the Ontario government. An earlier bailout, involving Bennett as the second biggest in a group of 21 investors, many of them famous authors such as Margaret Atwood, had clearly failed to save the company. But their $1.1 million infusion did give them—and Bennett—a seat at the show. There was accordingly much fanfare when, in late 1985, Bennett rescued M&S by buying Jack McClelland’s majority stake. Amid all the industry turmoil, here was a heartwarming success—a wealthy businessman doing his part to preserve a piece of Canadian cultural heritage. It had philanthropy written all over it.

At 57, Bennett was a great curiosity. Not even M&S board members knew much about him or his family’s colourful past, which suited Bennett just fine. When the Star dispatched me to write a profile of him, Bennett would grant only the briefest telephone interview. “It’s not as if I’m running for prime minister,” he said. But if Bennett craved privacy, his family had a history of bold marketing that would have warmed the heart of Jack McClelland, arguably the most flamboyant promoter ever to grace Canadian publishing. The Bennetts’ big break had come in 1927, when Bennett’s grandfather Saul persuaded F.W. Woolworth to try a new scheme. Instead of Woolworth building its own stores, the Bennetts would develop a new site, build to Woolworth requirements and then lease the property to the department store chain. By the mid 1950s, they had built more than 70 Woolworth stores across Canada and begun pioneering suburban shopping malls. Which, as I learned for my piece, is where the marketing comes in. Openings would feature pipe bands, clowns and circus daredevils. At Christmas, they once had Santas dropped from helicopters and a 20-metre Christmas tree installed at Scarborough’s Golden Mile Plaza. For the opening of Dixie Mall in Mississauga, it was Avie Bennett who came up with the idea of ordering 100,000 Dixie cups and filling them with free ice cream.

Yet trouble loomed. The company, Principal Investments, was drowning in debt as it acquired land for future development. In 1957, Bennett’s uncle, Jacob, left the firm in a major feud with his brothers. By 1963, Principal Investments was forced into receivership; Bennett was left to buy what little he could from the receivers and start again as First Plazas. It was all about redemption.

Bitter experience had made Bennett a shrewd businessman. By the time of M&S’s near collapse, he was also bored. The potential glamour of owning Canada’s elite publisher could not help but appeal. It would be the final redemptive note, and for the next 15 years, Bennett stuck it out, never making anything you could seriously call a profit, and injecting an unknown amount of cash to keep the place afloat. (When he bought M&S, he promised an initial $1 million infusion.)

By 2000, at age 72, he needed an exit strategy. The solution, in what initially seemed like another nationalist gesture, was simply to give 75 percent of the company to the University of Toronto, with Random House picking up the rest. That arrangement remained in place until 2011, when U of T sold its shares to Random House for, as Dewar discovers, a mere $1. How could M&S have been sold for so little?

Dewar’s sleuthing reveals that, from the beginning, Random House, not U of T, ran the finances of M&S. Random House could also encumber M&S with additional debt, and the multinational reserved a veto over its budget. Does that mean Random House had de facto control of M&S, even as Ottawa conveniently deemed M&S to be “Canadian” and thus eligible for government grants and the like? And why was Bennett blindsided by U of T’s sale to Random House? He only learned of the deal in August 2011, a month after U of T had notified Ottawa of its plans. Yet, in the words of one university official, Bennett was “more sad than angry.”

Most of Dewar’s readers will likely feel the same. There is no clear and obvious villain in this tale, no signal person or event to stir our moral outrage. A Canadian institution was saved from financial collapse in 1985 and, whether this was charade or not, carried on for a quarter century before being formally swallowed by the forces of globalization, making Baie Comeau seem a distant, quixotic gesture. As Dewar notes, the whole M&S saga ultimately “touches on much bigger issues, such as: the evolving idea of nationhood; how power really works in a country supposedly tamed by law; questions of identity we thought were put to rest but which have returned to bedevil us once more.”

Kenneth Kidd is a Toronto writer whose work for the Globe and Mail and the Toronto Star has garnered National Magazine and National Newspaper awards. His memoir, “Fishing ’round My Father,” was part of the anthology, Casting Quiet Waters: Reflections on Life and Fishing, edited by Jake MacDonald (Greystone, 2014).

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