Canada’s Business Families...Economic progress occurred by luck, when “fortune smiled”7 or...
Transcript of Canada’s Business Families...Economic progress occurred by luck, when “fortune smiled”7 or...
THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY Business Families: Building a Brighter Future | 1
building a brighter futureBusiness families:
Research commissioned by Creaghan McConnell Group assessing the impact of privately controlled businesses on Canada’s economy.
Canada’s Business Families
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ContentsI n t r o d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
T h e v a l u e o f b u s i n e s s f a m i l i e s . . . . . . . . . . . . . . . . . . . . . 5
H i g h l i g h t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B u i l d i n g a n a t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
R e v e n u e : w h e r e t h e m o n e y c o m e s f r o m . . . . . . . . . . 8
R e v e n u e : i n v e s t i n g i n t h e f u t u r e . . . . . . . . . . . . . . . . . . . 9
R e v e n u e : t r a i n i n g a n d i n n o v a t i o n . . . . . . . . . . . . . . . . . 1 0
Ta x e s : w h e r e t h e m o n e y g o e s . . . . . . . . . . . . . . . . . . . . . 1 1
Ta x e s : w h o p a y s t h e m o s t . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2
E m p l o y m e n t : w h e r e C a n a d i a n s w o r k . . . . . . . . . . . . . 1 3
E m p l o y m e n t : q u a l i t y o f w o r k l i f e . . . . . . . . . . . . . . . . . . 1 4
C o r p o r a t e c i t i z e n s h i p : r e s p o n s i b l e p r a c t i c e s . . 1 5
C o r p o r a t e c i t i z e n s h i p : c o d e s o f c o n d u c t . . . . . . . 1 6
P h i l a n t h r o p y : s p r e a d i n g t h e w e a l t h . . . . . . . . . . . . . . 1 7
C h a r i t i e s : s t r e n g t h e n i n g t h e n a t i o n . . . . . . . . . . . . . . 1 8
I n s t i t u t i o n s : h e a l t h a n d c u l t u r e . . . . . . . . . . . . . . . . . . . 1 9
S p o r t s : p r e s e r v i n g C a n a d a ’s g a m e . . . . . . . . . . . . . . . 2 0
E d u c a t i o n : t r a i n i n g f u t u r e b u s i n e s s l e a d e r s . . . 2 1
M e d i a : c o n n e c t i n g t h e p u b l i c . . . . . . . . . . . . . . . . . . . . . . 2 2
C o n c l u s i o n : s e e k i n g c o r p o r a t e c h a m p i o n s . . . . . 2 3
A p p r o a c h t o t h e r e s e a r c h . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4
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They are boldly ambitious, yet �ercely private.
Most Canadians have heard of the people who
make up Canada’s leading business families,
but know little about them. Many come from
humble origins, and erected empires in a single
generation. Today, their businesses generate
huge revenues, pay considerable tax, and provide
signi�cant employment. They’ve helped shape
the economic fabric of the country.
Indeed, they nurtured a nation. Canada’s business
families are the titans who organized the means of
production, primed the pump of enterprise, built
the factories, and kept the wheels in motion.1
Now, they’re the corporate champions who create
jobs, offer training, and spawn innovation.2
They’re ensuring Canada meets the challenge
of a changing global economy.3
INTRODUCTION
This report describes the contributions of Canada’s
500 wealthiest “business families,” or those families
or individuals who started a business, watched it
grow, and for the most part continue to have a
controlling share (although often with non-family
executives now running the day-to-day operations).
The families studied, and the companies they
founded, were identi�ed via publicly available
databases, information from Statistics Canada and
Industry Canada, and several mainstream sources
including books, magazine and newspaper articles,
and online sources. This research was conducted
over the spring and fall of 2014.
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In recent years, wealth disparity has become a
prominent topic in popular media. Conversely,
the economic and cultural contributions of
business leaders are commonly overlooked.
Abroad, much fanfare was paid to the Occupy
Wall Street movement and associated protests
decrying the wealthiest “one percent.” In
Canada, high-pro�le books have been produced
documenting growing inequality.4 One author
describes the disparity as a global phenomenon
that started in the late 1970s.5 Even earlier,
renowned journalist Pierre Berton wrote
extensively about wealth imbalance and
a perceived smug, or sel�sh, Canadian elite.6
Similarly, business families gain little favour in
historical writings. Prosperity is attributed to the
work of politicians. Economic progress occurred
by luck, when “fortune smiled”7 or Canada was
THE VALUE OF BUSINESS FAMILIES
“blessed”8 with growth, or bene�tted simply from
“good times.”9 Commerce is magic. A popular
account of 50 Canadians who “changed the
world” includes just one corporate titan, Mike
Lazaridis, co-founder of BlackBerry. The rest are
activists, politicians, scientists, entertainers, artists
and hockey players.10
This report tells a different tale. It provides a
“snapshot” of how Canada’s leading business
families have stimulated prosperity and wellbeing.
Their contribution and in�uence extend
throughout the corporate world and beyond.
Business families play a role in many walks of life:
corporate and social responsibility, philanthropy
and charities, education, media and sports. Many
were included in a recent list of the business
people with the greatest in�uence on national
politics and policy. They touch our lives daily.
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❱ Companies controlled by the 500 wealthiest business families account for 23% of the revenue of all medium and large enterprises in Canada, or $313 billion.
❱ In 2012, the 22 largest �rms of business families generated $280 billion, or 30% of the revenues of Canada’s 100 largest �rms.
❱ In 2012, three of these �rms were responsible for half the spending on R&D of the top 10 private sector spenders.
❱ In 2010, the top 1% of income earners paid over 20% of all federal and provincial income tax collected, and the top 10% paid almost 55% of all taxes.
❱ In 2012-2013, the �rms of business families contributed 20% of federal corporate tax or $6 billion.
❱ These �rms account for nearly 15% of all private sector employment in Canada, or nearly 1.6 million positions.
HIGHLIGHTS
❱ The largest of these �rms pay an average annual wage of $64,000, or well above the Canadian average, and provide better bene�ts in areas such as pensions and vacations.
❱ Several large family businesses rank among the top 50 corporate citizens in Canada, according to criteria that include environmental performance, innovation and safety.
❱ Canadian corporations – including those controlled by family businesses — give over $2.3 billion annually in charitable donations.
❱ Canada’s independent private foundations, many of them founded by business families, distribute $1.5 billion annually to an array of charity programs.
the top1%paid over 20% of all federal and provincial income tax collected, and the top 10% paid almost 55% of all taxes.
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They exert tremendous in�uence on Canadian
life. From the Irvings in the east, to the
Richardsons on the prairies, to the Pattison
empire on the west coast, Canada’s top business
families have not only shaped most major sectors
— think Bombardier, Loblaw, Magna, McCain,
Shaw — but contributed in many other ways.
They’ve strengthened communities and improved
living standards. By committing to the region of
their upbringing, they counteracted the nation’s
imbalance in economic development.
Most had modest beginnings. They started
companies in basements and small towns, in
media, manufacturing, the service sector and
transportation. If they had one driving force
in common, it is the belief that what can be
BUILDING A NATION
conceived can be created.11 Like their American
counterparts, they attribute their success to hard
work and ingenuity.12
As described in detail by Peter C. Newman,
the country was built on the evolution of family
�rms into national institutions.13 George Weston
bought a bread delivery route. John Molson
founded a brewery. Ted Rogers created a radio
station. Roy Thomson bought a newspaper. John
Sobey opened a grocery store.14 All of them, and
many more, converted these modest beginnings
into enormous and renowned Canadian
companies. Today, the bene�ts persist across
the country.
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Companies use this revenue not just to pay taxes,
but to spur the reinvestment, diversi�cation,
and training necessary for growth and greater
employment. In their 2014 analysis of Canada’s
economic prospects, Brave New Canada, Derek
Burney and Fen Osler Hampson note that many
major Canadian �rms are risk-averse, shying away
from investments in innovation and training.
This conservative approach leads to foreign
REVENUE: WHERE THE MONEY COMES FROM
L I N A M A R G O E S G L O B A L
Since 1966, when Frank Hasenfratz launched his company from the basement of his
Guelph, Ontario home, Linamar has grown to employ 17,000 people and now operates at
40 facilities in 10 countries. Focused on high-quality precision machining, the company
carved out a niche-market by investing in its workforce, training workers to meet the
specific standards and needs of clients. What began as an autoparts maker now builds
components for several industries, including the oil and gas sector, wind and solar energy,
and agriculture.19
In Canada, family-controlled businesses account for 23% of operating revenue for all medium and
large Canadian enterprises, or over $313 billion.15 Moreover, family-controlled companies generate
about $280 billion or over 30% of all revenues earned by Canada’s largest 100 firms.16 Large firms in
Canada make up 0.3% of all enterprises but generate one-third (29.6%) of all revenue.17
takeovers and stagnation, bringing Canada ever-
closer to a “branch of�ce” economy.18 Burney and
Hampson cite some of Canada’s largest family-
controlled businesses as exceptions to the trend;
their innovations, investments and diversi�cation
are what make these companies succeed.
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However, for the largest family-controlled
businesses, R&D has proven integral to success.
Many of these businesses spend generously
on research and development. In 2012, they
allocated nearly $3 billion to R&D, or over half
the total of the top 10 spenders.21 In fact, just 75
large �rms account for half of all private-sector
R&D spending in Canada.22
REVENUE: INVESTING IN THE FUTURE
Canadians have long lagged behind other major industrialized countries in spending on research and
development. Since 2005, R&D spending by business as a percentage of GDP has shrunk by more
than 1% per year. On an OECD scale, Canada has fallen from 18th to 25th out of 41 countries, and is
the lowest of the G7.20
B O M B A R D I E R ’ S L O N G G A M E
Joseph-Armand Bombardier launched a snowmobile company in Valcourt, Quebec in 1942.
Today, Bombardier is the world’s third-largest commercial aircraft manufacturer, generating
revenues of over $16 billion in 2012 and employing over 70,000 people worldwide.24 In their
book, Burney and Hampson credit the success of Bombardier to a committed long-term
strategy. They note that “the Bombardier family has historically held a large stake in the
firm,” ensuring the long-term strategy necessary for sustained growth.25
R&D leads to innovative product development,
new employment, and spin-off bene�ts for
smaller �rms. At the very least, it prevents
Canada from falling further behind. Without
R&D investments and consequent global success
of “�agship companies,” smaller �rms will also
suffer and the economy deprived of innovation
and growth.23
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70+30+yREVENUE: TRAINING AND INNOVATION
Where Canada’s private sector falls short in training and innovation, business families are picking up
the slack. Canadian companies spent 40% less on employee learning and development in 2011 than
they did in 1993.26 The common view is: why spend thousands improving employee skills only to have
an ambitious competitor poach them away? Similarly, as detailed in a 2012 report by the OECD, despite
Canada’s high level of education and significant public investment, our innovation record falls short.27
To offset this lacklustre performance,
Canada needs champions. The nation’s
top business families are reversing
this complacency. They exemplify the
success that can come from innovation,
diversi�cation, and a commitment to
their people. Burney and Hampson
point to Bombardier, GardaWorld and
Linamar as examples showing the way.
F O L L O W I N G T H E M O N E Y AT G A R D A W O R L D
Starting in 1995 by taking a second mortgage on his Montreal home, Stephan Crétier has grown GardaWorld
into a worldwide company with 45,000 employees and annual global revenues of $1.4 billion. His vision was
to create a customer-friendly, one-stop shopping business model in security, where you call just one number
for every related service. Through improved training and enhanced codes of conduct, the firm has become
the leading cash-logistics provider in North America, surpassing Brinks.
REVENUES OF CANADA’S 100 LARGEST FIRMS
GENERATED BY BUSINESS FAMILIES
30%
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TAXES: WHERE THE MONEY GOES
Canada’s business families contribute a sizeable proportion of the taxes needed to support the
country. Their contributions fund infrastructure, education and health, old age security, public safety,
employment insurance, defence, and social welfare. In 2012-2013, income tax and corporate tax
made up 63% of the $257 billion the federal government took in.28
In 2010, the top 1% of income earners (those
earning over $250,000) paid over 20% of all
federal and provincial income tax collected. The
top 10% paid almost 55% of all taxes. By contrast,
the bottom 50% of Canadian income earners
contributed 4% towards the collective personal
tax bill.29 If property taxes were included, the
proportion of the 1% would be even higher.30
Researchers have documented a growing income
disparity.31 Others contend that when all variables
are accounted for, the disparity is not nearly so
TA X I N G T H E 1 %
In Tax Me I’m Canadian, Mark Milke contradicts the impression that Canada’s wealthy aren’t paying their
share of tax. He points to the 2011 Occupy Wall Street movement as the wellspring of demands for higher
taxes and greater redistribution. But Canadians earning over $100,000 are already paying half of all tax.
The 21% who fall into the middle class (those earning $50,000 to $100,000) pay 37%, while the remaining
73% of Canadians (below $50,000) pay 17%.35 While government is responsible for ensuring equitable
redistribution through transfers and social programs, Canada’s wealthiest are providing much of the revenue
that contributes to this redistribution.
pronounced.32 In 2012, the top 1% of earners took
home over 10% of all income earned.33 But their
share has been declining since 2006.34
A M O U N T F R O M
I N C O M E A N D
C O R P O R AT E TA X
6 3 %
G O V E R N M E N T I N C O M E
$ 2 5 7 B I L L I O N
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TAXES: WHO PAYS THE MOST
In 2012-2013, the federal government took in about $35 billion in corporate tax. Large firms make
up 6.6% of all corporate tax filers but contribute 73% of the tax,36 or $26 billion. Given that family-
controlled businesses generate 23% of revenue for medium and large firms, they are roughly
responsible for at least $6 billion, or just under 20% of federal corporate tax.
In 2014, the Canadian Council of Chief
Executives (CCCE) conducted a survey to
determine if Canada’s largest companies are
paying enough tax. Several of Canada’s largest
family-controlled businesses are among the
CCCE’s members. The study found that, when all
forms of tax are tallied, 63 of the country’s 150
largest companies (those for which numbers
were available) actually paid over $40 billion in
tax in 2012.
C O R P O R AT E W E L FA R E
In Canada, many corporations benefit from federal subsidies. Several noted bailouts occurred in recent years
that reinforce the impression Canada is awash in corporate welfare. However, family-controlled businesses
receive little in subsidies. In 2011, of Canada’s 25 largest firms by employee, most family businesses
received no subsidies.39 These companies have grown and provided hundreds of thousands of jobs on the
strength of their own revenues and innovation.
This brought the total tax rate paid by these
companies to 33.4% for that year, or over double
the federal corporate tax rate.37 For every $1 of
corporate income tax paid, there was another
$0.94 in taxes borne such as employment taxes,
sales taxes and property taxes. The study found
that these �rms allocate about 38% of revenue
to government in taxes and other payments,
29% to employees, and 33% to shareholders and
reinvestment.38
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EMPLOYMENT: WHERE CANADIANS WORK
In Canada, businesses controlled or founded by Canada’s 500 wealthiest families provide nearly
15% of all private sector jobs, or 1.6 million positions.40 In fact, the 0.3% of firms that make up large
enterprises in Canada account for one-third of all jobs, or about 3.5 million positions.41 Between 2001
and 2011, just 0.2% created an astounding 46% of all new employment in Canada.42 Many of these
employees work at the largest companies in the land, including many family-controlled businesses.
In September 2014, Statistics Canada reported
that 11 million of the 18 million employed
Canadians work in the private sector.43 Of
Canada’s 25 largest companies by employees,
10 are family-controlled businesses that together
employ over one million people,44 equivalent
to the entire population of Saskatchewan. In
2011, the largest private employers were Onex
Corp., George Weston Ltd., Loblaw Companies,
and Magna International. Rounding out the
top 10 were Bombardier Inc., Thomson Reuters
Corp., Empire Company, Power Corp., Rogers
Communications and GardaWorld. These 10
companies are responsible for close to 10% of
Canada’s entire private sector employment. Onex
Corp., founded by Winnipegger Gerry Schwartz,
today employs 230,000 people worldwide.45
Loblaw, Canada’s largest grocery chain, has
over 190,000 employees nationwide, and is the
country’s largest private-sector workforce.46
millionjobs in Canada are provided by family-controlled businesses
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EMPLOYMENT: QUALITY OF WORK LIFE
For Canada’s largest family-controlled businesses, investing in people is a top priority. Their success
illustrates the value of this approach. The human resources firm Knightsbridge notes that the best-
managed companies in Canada put great emphasis on their workers. These companies strive to create
a strong sense of family and transparency in order to drive employee empowerment and passion, which
fuels these companies’ strong customer focus, entrepreneurial spirit, and results-oriented approach.47
Large �rms, many of them family-controlled businesses,
typically provide better bene�ts. Insurance and pension
coverage at large �rms is roughly four times that of small
�rms. Workers at large �rms enjoy better fringe bene�ts,
such as vacation pay, sick leave and bereavement leave.48
The survey by the Canadian Council of Chief Executives
found that the country’s largest �rms pay an average
annual wage of over $64,000, well above the Canadian
average of $58,000.49 This means a couple with one
member earning the average at a large �rm and one
earning the Canadian average would rank within the
top 10% of income-earning families in Canada.50
R E W A R D I N G W O R K AT W E S T O N
At Weston Foods and Loblaw, Galen Weston ensures employees receive generous
compensation and benefits. They can take advantage of a variety of alternative work
arrangements, including flexible hours, compressed work weeks and telecommuting.
Weston also manages an academic scholarship program for children of employees who
attend post-secondary institutions. The company also helps cultivate high-potential
employees with leadership training and formal mentoring, and offers career planning
services to support their long-term development.51
people a top priority
family-controlled businesses make investments in
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Such corporate citizenship bene�ts the business.
A survey found that 90% of Canadians are
more likely to purchase goods and services
from a company they believe to be socially and
environmentally responsible.53 Business families
are heeding the call. According to an annual
survey conducted by Corporate Knights, several
of Canada’s largest family-controlled businesses
are among the top 50 corporate citizens in the
country. The criteria include environmental
CORPORATE CITIZENSHIP: RESPONSIBLE PRACTICES
Increasingly, consumers and employees in Canada expect corporations to embrace a broader
sense of values.52 To stay in business, firms must not only honour their economic responsibility but
also account for the ethical or social impact of their operations. Employee rights and opportunities,
customer relations, respect for the environment, and the rule of law internationally have all taken on
greater prominence.
E N V I R O N M E N TA L R E S P O N S I B I L I T Y AT S A P U T O
Launched by Lino Saputo in 1954 in Montreal, Saputo has become the largest dairy
producer in Canada, with over 12,000 employees. Saputo is committed to environmentally
responsible business practices. The firm annually assesses, and improves, its
environmental performance according to a set of key indicators established in 2011.
Saputo participates in the EnergyStar Challenge, a US government program that
encourages manufacturing facilities to reduce their energy intensity by at least 10% from
an established baseline within five years.56
performance, taxes paid, innovation, pension
fund, safety performance, and employee turnover.
The ranking assesses how well companies
demonstrate responsible business practices.
Bombardier, Cascades, Rogers Communications
and Loblaw Companies are among the privately
controlled enterprises on the 2014 list.54 In
2014, Bombardier ranked 24th out of the
100 top companies worldwide for corporate
sustainability.55
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Many family businesses have made codes of
conduct central to their mandate. Sobeys,
the national food company that began as a
meat delivery business in 1907, has a code
of conduct that includes a commitment
to a working environment of trust, respect
and safety. The company supports national
initiatives that enhance health and wellness,
as well as community events and causes in the
neighbourhoods where its employees reside.58
CORPORATE CITIZENSHIP: CODES OF CONDUCT
In Canada, corporate codes of conduct and ethics have become common, spelling out a firm’s
commitment to ethical conduct in the workplace, in business relationships, and with the community.
Many of Canada’s business families have embraced this approach. Maclean’s magazine ranks some
of the largest family firms in the top 50 for social responsibility, based on treatment of employees,
environmental initiatives, and impact on local communities.57
A H I S T O R Y O F S U S TA I N A B I L I T Y AT C A S C A D E S
Cascades was reared on sustainability: the recovery of waste paper. The Lemaire brothers
founded the paper products manufacturer in 1964 in Kingsey Falls, Quebec. It has grown
to employ over 12,000 at 100 locations in North America and Europe. Cascades develops
unique three-year sustainable development reports that measure the company’s
progress on 18 indicators, from energy consumption to effluent discharge to worker
health and safety.59
Roots Canada, the clothing wear company
founded in 1973 by Michael Budman and Don
Green, has developed a workplace code of
conduct, which sets forth minimum requirements
suppliers must meet to do business with the
company. Under the code, Roots expects its
suppliers to act reasonably in all respects and
to do their best to ensure that no abusive,
exploitative or illegal conditions exist at their
workplaces.
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PHILANTHROPY: SPREADING THE WEALTH
Canada’s business families are engaged in an array of philanthropic and community-building
activities, such as sponsorship, charitable work, volunteerism, community investments, and
environmental sustainability. They donate to numerous causes and organizations, including
educational institutions, community groups, service clubs, civic projects, arts and culture groups,
athletic organizations, and environmental groups.
Donations range from thousands to millions.
Recently, Charles Bronfman sold off 900 works
from the Bronfman “Claridge” art collection at
Waddington’s auction house, and donated the
proceeds to Historica Canada, a promoter of
Canadian history.60
Annually, Canada’s corporations make more than
$2.3 billion in charitable donations, according
to Imagine Canada, a national organization
committed to supporting the country’s charities.61
C O M M U N I T Y C O M M I T M E N T AT P O W E R C O R P O R AT I O N
Power Corporation, founded in 1925 by Arthur J. Nesbitt and Peter A. T. Thompson and
brought under the leadership of Paul Desmarais in 1968, is an international management
company with over 30,000 employees. The firm has a strong community focus, making
corporate donations and investments, and encouraging employee volunteer initiatives.
It supports organizations and initiatives in arts and culture, environment, education and
health, including the Canadian Paralympic Committee, the National Theatre School of
Canada, and the Nature Conservancy of Canada.64
A 2006 study showed that 80% of all private-
sector charitable donations came from large
�rms and 79% of large �rms engage in ongoing
charitable initiatives, as compared with 22% of
all Canadian �rms.62 Imagine Canada’s ‘Caring
Company Program’ consists of companies
committed to championing community
investment projects.63 Its members include such
large family businesses as James Richardson &
Sons, Loblaw Companies, Power Corp. and Rogers
Communications.
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CHARITIES: STRENGTHENING THE NATION
Many of Canada’s business families have established their own foundations for charitable work.
These charities support projects in many diverse areas, including the arts, education, the health
sector, public policy research, environmental sustainability, international development and social
services. Canada’s independent private foundations distribute $1.5 billion annually to an array of
charity programs.65
The Weston Foundation, for example, undertakes
programs in education, land conservation,
science and neuroscience.66 In Calgary, the
Carthy Foundation — created thanks to support
from Coril Holdings, founded by Ron Mannix —
supports youth and environmental initiatives.67
The One Drop Foundation represents another
ambitious undertaking. Guy Laliberté founded
the entertainment company Cirque du Soleil,
which has enjoyed tremendous success, in 1984.
Laliberté launched the One Drop Foundation in
2007 with the ambitious goal of ensuring everyone
in the world gains access to clean drinking water.
The foundation makes use of the circus arts,
folklore, popular theatre, music, dance and the
visual arts to promote education, community
involvement and public awareness of the need
to improve water supplies. The foundation also
supports technical projects in developing countries
that will improve access to water and enhance
related elements of community life, such as food
security and gender equality.68
billionin annual charitable donations given by Canadian corporations
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Business Families Report FINAL.indd 18 17/02/2015 10:26:32 AM
INSTITUTIONS: HEALTH AND CULTURE
Many iconic cultural institutions and programs in Canada owe their existence to business families,
who recognize that wealth carries a civic obligation.69 Across the country, Canada’s wealthiest
citizens have donated millions to hospitals, opera companies, ballet troupes, theatres, and other
cultural and scientific institutions.70 In 2014, the Rogers family made the single largest monetary gift
in Canadian history, donating $130 million to establish the Ted Rogers Centre for Heart Research.71
Other examples abound. In Montreal, the
Bronfman family built the Segal Centre for
Performing Arts, originally named the Saidye
Bronfman Centre for the Arts. In Toronto, Roy
Thomson Hall was built thanks to a donation
from the Thomson family. In Winnipeg, the
recently opened Canadian Museum for Human
Rights was the brainchild of media mogul Izzy
C E L E B R AT I N G G R E AT W R I T I N G
Literature needs benefactors. Some of Canada’s greatest literary prizes are the creation of business families.
Sponsored by Rogers Communications, the Rogers Writers’ Trust Fiction Prize is an annual award for
Canada’s best work of fiction. The 2014 winner is Manitoba writer Miriam Toew’s family tragedy All My Puny
Sorrows. The Hilary Weston Writer’s Trust Prize is awarded to the best work of non-fiction, which in 2014
was This Changes Everything, Naomi Klein’s examination of the relationship between capitalism and
climate change. These prizes have helped some of Canada’s strongest burgeoning writers gain widespread
public attention.
Asper and built through the donation and efforts
of the Asper Foundation. In Calgary, the Riddell
Family Charitable Foundation is a key supporter
of Canada’s Sports Hall of Fame. Clay Riddell is
founder of Calgary-based Paramount Resources.
In 2014, Riddell made an enormous donation to
the Alberta Children’s Hospital, where his wife,
now deceased, worked for over three decades.72
in annual charitable donations given by Canadian corporations
THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY Business Families: Building a Brighter Future | 19
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20 | Business Families: Building a Brighter Future THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY
SPORTS: PRESERVING CANADA’S GAME
Canada’s greatest pastime owes much to the nation’s business families. As with other professional
sports, hockey is a private-sector endeavour that requires leaders of industry to step up. In Canada, many
of our wealthiest entrepreneurs have made huge commitments to the ownership and operation of hockey
franchises, ensuring “our” game continues to be played in many venues across the country.
In 2008, Daryl
Katz purchased the
Edmonton Oilers,
and demonstrated his
commitment to the
team by negotiating
with the city the
construction of a new
$480-million downtown
arena.
In 2009, the Molson
family, renowned
for Molson Brewery,
reacquired ownership
of the storied Montreal
Canadiens, vowing to
maintain the team’s
proud traditions.
In 2011, David Thomson
helped bring the Jets
back to Winnipeg,
providing the real estate
necessary to build a new
15,000-seat arena in
exchange for a partial
stake in the team.
In 2014, Rogers acquired
the rights to most
NHL games broadcast
in Canada, and even
took ownership of the
iconic Hockey Night in
Canada program and
the renowned “Coach’s
Corner” segment
starring Don Cherry and
Ron MacLean.
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THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY Business Families: Building a Brighter Future | 21
EDUCATION: TRAINING FUTURE BUSINESS LEADERS
Canada’s business families have contributed to the development of some of the top business
schools in Canada. In 2014, the Schulich School of Business and Rotman School of Management
were ranked among the Corporate Knights 100 most-sustainable MBA programs worldwide. The
rankings are based on how well the schools have integrated sustainability into the learning process.73
In 1995, the Faculty of Administrative Studies at
York University changed its name to the Schulich
School of Business upon receiving a substantial
donation from entrepreneur Seymour Schulich.
Today, the Schulich MBA program is ranked No. 1
in the world by the Aspen Institute (a leadership
institute based in Washington, D.C.) for doing the
best job of preparing future business leaders for
the environmental, social and ethical complexities
of modern-day business.74
Also in 1995, at the University of Toronto, the
School of Business was renamed the Rotman
School of Management in honour of graduate
and donor Joe Rotman, founder of the Clairvest
Group. The School is ranked ninth worldwide by
the Financial Times for faculty research.75 Both
schools are ranked among the top seven business
schools in Canada.76 The list also includes the
Sauder School of Business at the University of
British Columbia, one of the world’s leading
business schools. In 2003, the university’s
business school was renamed after receiving a
substantial donation from William L. Sauder,
founder of Sauder Industries.77
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MEDIA: CONNECTING THE PUBLIC
Pick up the newspaper, turn on the television, or send an email, and you’re likely to use the product of a
company founded by one of Canada’s business families. Many of the largest Canadian media enterprises
were launched decades ago by business families, including those of Ted Rogers, Roy Thomson, and J.R.
Shaw.
Rogers Communications provides millions with
broadcasting, publishing, internet and cellular
services. The company owns several Canadian
magazines, including the popular weekly current
affairs publication, Maclean’s.
Similarly, Thomson Reuters is a major
multinational mass media �rm created by the
purchase of the Reuters Group by the Toronto-
based Thomson Corporation, which grew from
a single newspaper purchased by Roy Thomson
Pick up the newspaper, turn on the television, or send an email, and you’re likely to use the product
of a company founded by one of Canada’s business families. Many of the largest Canadian media
enterprises were launched decades ago by business families, including those of Ted Rogers, Roy
Thomson, and J.R. Shaw.
in 1934 into a global media empire that includes
ownership of the Globe and Mail and Reuters
News Agency.
Calgary-based Shaw Communications provides
telephone and Internet services and has
ownership in television networks, including
Global. Shaw was launched in 1966 by J.R. Shaw
as a cable television company that grew to have
media interests across Canada and in the US.
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THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY Business Families: Building a Brighter Future | 23
CONCLUSION: SEEKING CORPORATE CHAMPIONS
In 2014, over a dozen founders and senior
executives of family-controlled businesses
ranked among the top 50 corporate leaders with
the greatest in�uence in politics and policy in
Canada.79 Without these hard-working risk takers
– Canada’s “builders” – the Canadian economy
would likely have become the branch plant
economy so feared by many. Canadians are wary
of such a development, expressing concern about
head of�ces being “hollowed out” by foreign
acquisitions.80
Their influence persists. The legacy of our business families permeates the top business topics of the
day. In a recent issue of The Globe and Mail, a random selection of business stories makes the point:
stories on Rogers Communications’ efforts to reach a younger audience, Bombardier’s assessment
of international investments, Maple Leaf Foods’ plans for restructuring, and Thomson Reuters’
position on acquisitions.78
Canadian business families create the revenue,
taxes, and employment that puts Canadians
to work, at home, in local communities, where
people want to live, raise their families, and retire.
Canada’s business families support the charities
and institutions – in the arts, education, and
sports – that the population holds dear. They
are the entrepreneurs who take risks, diversify,
innovate, compete, and persevere. Each day, in
all facets of Canadian life, their legacy lives on,
while their determination forecasts the future of
the nation.
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24 | Business Families: Building a Brighter Future THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY
The original research of this report covered
revenues and employment �gures for Canadian
family-controlled businesses. This information
was sought out through publicly available
information provided by Statistics Canada and
Industry Canada. For revenues, available annual
corporate returns for 2009 to 2011 were used,
as well as data published in the Globe and Mail’s
Report on Business Top 1,000 Public Companies
and Top 350 Private Companies. For taxation
statistics, available data for 2009-2011 were used
from the Financial and Taxation Statistics (FTS)
table. For labour force estimates, available data for
2011-2013 from Labour Force Survey estimates
(LFS) were used.
BUSINESS FAMILIES:
BUILDING A STRONGER NATION
November 21, 2014
Prepared for
Craig Postons and Creaghan McConnell Group Ltd.
by David Wylynko, West Hawk Associates Inc.
Contents
INTRODUCTION 4
THE VALUE OF BUSINESS FAMILIES 5
HIGHLIGHTS 6
BUILDING A NATION 7
REVENUE: WHERE THE MONEY COMES FROM 8
REVENUE: INVESTING IN THE FUTURE 9
REVENUE: TRAINING AND INNOVATION 10
TAXES: WHERE THE MONEY GOES 11
TAXES: WHERE THE MONEY GOES 12
EMPLOYMENT: WHERE CANADIANS WORK 13
CENTREPAGE FOLD OUT MAP 14
EMPLOYMENT: QUALITY OF WORK LIFE 15
CORPORATE CITIZENSHIP: RESPONSIBLE PRACTICES 16
CORPORATE CITIZENSHIP: CODES OF CONDUCT 17
PHILANTHROPY: SPREADING THE WEALTH 18
CHARITIES: STRENGTHENING THE NATION 19
CULTURE: INSTITUTIONS AND PROGRAMS 20
SPORTS: PRESERVING CANADA’S GAME 21
EDUCATION: TRAINING FUTURE BUSINESS LEADERS 22
MEDIA: CONNECTING THE PUBLIC 23
CONCLUSION: SEEKING CORPORATE CHAMPIONS 24
APPROACH TO THE RESEARCH 25
CANADA’S BUSINESS FAMILIES:
BUILDING A STRONGER NATION
INTRODUCTION
They are boldly ambitious, yet �ercely private. Most Canadians have heard of the people who make up Canada’s leading business families, but know little about them. Many come from humble origins, and erected empires in a single generation. Today,
their businesses generate huge revenues, pay considerable tax, and provide signi�cant employment. They’ve helped shape the economic fabric of the country.
Indeed, they nurtured a nation. Canada’s business families are the titans who organized the means of production, primed the pump of enterprise, built the factories, and kept the wheels in motion.1 Now, they’re the corporate champions who create jobs,
offer training, and spawn innovation.2 They’re ensuring Canada meets the challenge of a changing global economy.3
This report describes the contributions of the largest 500 companies controlled by Canadian ‘business families,’ or those families or individuals who started a business, watched it grow, and for the most part continue to have a controlling share (although
often with non-family executives now running the day-to-day operations). The families studied, and the companies they founded, were identi�ed via publicly available databases, information from Statistics Canada and Industry Canada, and several
mainstream sources including books, magazine and newspaper articles, and online sources. This research was conducted over the spring and fall of 2014.
THE VALUE OF BUSINESS FAMILIES
They’re enviable, but scorned. Increasingly, the super-rich are popularly portrayed as wholly self-serving. This characterization gained wide appeal during the 2011 Occupy Wall Street movement, which drove public protests in many countries over income
inequality. Recently, the sentiment was reinforced in books by such high-pro�le Canadian authors as Linda McQuaig4 and Chrystia Freeland.5 Decades earlier, well-known writers like Pierre Berton were already questioning the integrity of Canada’s
wealthiest citizens.6
Canadian historians, meanwhile, give business families little credit for nation-building. They attribute prosperity to the work of politicians. Economic progress occurred by luck, when “fortune smiled”7 or Canada was “blessed”8 with growth, or bene�tted
simply from “good times.”9 Commerce is magic. A popular account of 50 Canadians who “changed the world” includes just one corporate titan, Mike Lazaridis, co-founder of BlackBerry. The rest are activists, politicians, scientists, entertainers, artists
and hockey players.10
This report tells a different tale. It provides a “snapshot” of how Canada’s leading business families have stimulated prosperity and wellbeing. Their contribution and in�uence extend throughout the corporate world and beyond. Business families play a role
in many walks of life: corporate and social responsibility, philanthropy and charities, education, media and sports. Many were included in a recent list of the 50 business people with the greatest in�uence on national politics and policy. They touch our
lives daily.
HIGHLIGHTS
Companies controlled by business families account for 23% of the revenue of all medium and large enterprises in Canada or $313 billion.
In 2012, the 22 largest �rms of business families generated $280 billion or 30% of the revenues of Canada’s 100 largest �rms.
In 2012, these �rms were responsible for half the spending on R&D of the top 10 private sector spenders.
In 2010, the top 1% of income earners paid over 20% of all federal and provincial income tax collected, and the top 10% paid almost 55% of all taxes.
In 2012-2013, the �rms of business families contributed 20% of federal corporate tax or $6 billion.
The top 500 of these �rms account for nearly 15% of all private sector employment in Canada, or nearly 1.6 million positions.
The largest of these �rms pay an average annual wage of $64,000 or well above the Canadian average, and provide better bene�ts in areas such as pensions and vacations.
Several large family businesses rank among the top 50 corporate citizens in Canada, according to criteria that include environmental performance, innovation and safety.
Canada’s largest family businesses are among the Canadian corporations that give over $2.3 billion annually in charitable donations.
Canada’s independent private foundations, many of them founded by business families, distribute $1.5 billion annually to an array of charity programs.
BUILDING A NATION
They exert tremendous in�uence on Canadian life. From the Irving’s in the east, to the Richardson’s on the prairies, to the Pattison empire on the west coast, Canada’s top business families have not only shaped most major sectors — think Bombardier,
Loblaw, Magna, McCain, Shaw — but contributed in many other ways. They’ve strengthened communities and improved living standards. By committing to the region of their upbringing, they counteracted the nation’s imbalance in economic
development.
Most had modest beginnings. They started companies in basements and small towns, in media, manufacturing, the service sector and transportation. If they had one driving force in common, it is the belief that what can be conceived can be created.11 Like
their American counterparts, they gained success through hard work and ingenuity.12
The country was built on the evolution of family �rms into national institutions.13 George Weston bought a bread delivery route. John Molson founded a brewery. Ted Rogers created a radio station. Roy Thomson bought a newspaper. John Sobey opened a
grocery store.14 All of them, and many more, converted these modest beginnings into enormous and renowned Canadian companies. Today, the bene�ts persevere across the country.
REVENUE: WHERE THE MONEY COMES FROM
In Canada, family-controlled businesses account for 23% of operating revenue for all medium and large Canadian enterprises or over $313 billion.15 Of the 100 largest �rms in Canada by revenue, 22 are family-controlled companies that, in 2012, generated
about $280 billion in revenue or over 30% of all revenues earned by the top 100 �rms.16 Canada’s large �rms make up 0.3% of Canadian enterprises but generate almost half (48.5%) of all revenue.17
Companies use this revenue not just to pay taxes, but to spur the reinvestment, diversi�cation, and training necessary for growth and greater employment. In their 2014 analysis of Canada’s economic prospects, Brave New Canada, Derek Burney and Fen
Osler Hampson note that many major Canadian �rms are risk-averse, shying away from investments in innovation and training. This conservative approach leads to foreign takeovers and stagnation, bringing Canada ever-closer to a “branch of�ce”
economy.18 Burney and Hampson cite some of Canada’s largest family-controlled businesses as exceptions to the trend; their innovations, investments and diversi�cation are what make these companies succeed.
BOX STORY: LINAMAR GOES GLOBAL
Since 1966, when Frank Hasenfratz launched his company from the basement of his Guelph, Ontario home, Linamar has grown to employ 17,000 people and now operates at 40 facilities in 10 countries. Focused on high-quality precision machining, the
company carved out a niche-market by investing in its workforce, training workers to meet the speci�c standards and needs of clients. What began as an auto parts maker now builds components for several industries, including the oil and gas sector,
wind and solar energy, and agriculture.19
REVENUE: INVESTING IN THE FUTURE
Canadians have long lagged behind other major industrialized countries in spending on research and development. Since 2005, R&D spending by business as a percentage of GDP has shrunk by more than 1% per year. On an OECD scale, Canada has fallen
from 18th to 25th out of 41 countries, and is the lowest of the G7.20
However, for the largest family-controlled businesses, R&D has proven integral to success. Many of these businesses spend generously on research and development. In 2012, they allocated nearly $3 billion to R&D, or over half the total of the top 10
spenders.21 In fact, just 75 large �rms account for half of all private-sector R&D spending in Canada.22
R&D leads to innovative product development, new employment, and spin-off bene�ts for smaller �rms. At the very least, it prevents Canada from falling further behind. Without R&D investments and consequent global success of “�agship companies,”
smaller �rms will also suffer and the economy deprived of innovation and growth.23
BOX STORY: BOMBARDIER’S LONG GAME
Joseph-Armand Bombardier launched a snowmobile company in Valcourt, Quebec in 1942. Today, Bombardier is the world’s third-largest commercial aircraft manufacturer, generating revenues of over $16 billion in 2012 and employing over 70,000 people
worldwide.24 In their book, Burney and Hampson credit the success of Bombardier with a committed long-term strategy. They note that “the Bombardier family has historically held a large stake in the �rm,” ensuring the long-term strategy necessary
for sustained growth.25
REVENUE: TRAINING AND INNOVATION
Where Canada’s private sector falls short in training and innovation, business families are picking up the slack. Canadian companies spent 40% less on employee learning and development in 2011 than they did in 1993.26 The common view is: why spend
thousands improving employee skills only to have an ambitious competitor poach them away? Similarly, as detailed in a 2012 report by the OECD, despite Canada’s high level of education and signi�cant public investment, our innovation record falls
short.27
To offset this lacklustre performance, Canada needs champions. The nation’s top business families are reversing this complacency. They exemplify the success that can come from innovation, diversi�cation, and a commitment to their people. Burney and
Hampson point to Bombardier, GardaWorld and Linamar as examples showing the way.
BOX STORY: FOLLOWING THE MONEY AT GARDAWORLD
Starting in 1995 by taking a second mortgage on his Montreal home, Stephan Crétier has grown GardaWorld into a worldwide company with 45,000 employees and annual global revenues $1.4 billion. His vision was to create a customer-friendly, one-stop
shopping business model in security, where you call just one number for every related service. Through improved training and enhanced codes of conduct, the �rm has become the leading cash-logistics provider in North America, surpassing Brinks.
TAXES: WHERE THE MONEY GOES
Canada’s business families contribute a sizeable proportion of the taxes needed to support the country. Their contributions fund infrastructure, education and health, old age security, public safety, employment insurance, defence, and social welfare. In
2012-2013, income tax and corporate tax made up 63% of the $257 billion the federal government took in.28
Income Tax
In 2010, the top 1% of income earners (those earning over $250,000) paid over 20% of all federal and provincial income tax collected. The top 10% paid almost 55% of all taxes. By contrast, the bottom 50% of Canadian income earners contributed 4%
towards the collective personal tax bill.29 If property taxes were included, the proportion would become even higher.30
Many believe the wealthy should pay more tax, due to a perceived income disparity.31 Others contend that when all variables are accounted for, the disparity is not nearly so pronounced.32 In 2012, the top 1% of earners did well, taking home over 10% of
all income earned.33 But their share has been declining since 2006.34
BOX STORY: TAXING THE 1%
In Tax Me I’m Canadian, Mark Milke contradicts the impression that Canada’s wealthy aren’t paying their share of tax. He points to the 2011 Occupy Wall Street movement as the wellspring of demands for higher taxes and greater redistribution. But
Canadians earning over $100,000 are already paying half of all tax. The 21% who fall into the middle class (those earning $50,000 to $100,000) pay 37%, while the remaining 73% of Canadians (below $50,000) pay 17%.35 While government is
responsible for ensuring equitable redistribution through transfers and social programs, Canada’s wealthiest are providing much of the revenue that contributes to this redistribution.
TAXES: WHERE THE MONEY GOES
Corporate Tax
In 2012-2013, the federal government took in about $35 billion in corporate tax. Large �rms make up 6.6% of all corporate tax �lers but contribute 73% of the tax,36 or $26 billion. Given that family-controlled businesses make up 23% of medium and large
�rms, they were roughly responsible for at least $6 billion or just under 20% of federal corporate tax.
In 2014, the Canadian Council of Chief Executives (CCCE) conducted a survey to determine if Canada’s largest companies are paying enough tax. Several of Canada’s largest family-controlled businesses are among the CCCE’s members. The study found
that, when all forms of tax are tallied, 63 of the country’s 150 largest companies (those for which numbers were available) actually paid over $40 billion in tax in 2012.
This brought the total tax rate paid by these companies to 33.4% for that year, or over double the federal corporate tax rate.37 For every $1 of corporate income tax paid, there was another $0.94 in taxes borne such as employment taxes, sales taxes and
property taxes. The study found that these �rms allocate about 38% to government in taxes and other payments, 29% to employees, and 33% to shareholders and reinvestment.38
BOX STORY: CORPORATE WELFARE
In Canada, many corporations bene�t from federal subsidies. Several noted bailouts occurred in recent years that reinforce the impression Canada is awash in corporate welfare. However, family-controlled businesses receive little in subsidies. In 2011, of
Canada’s 25 largest �rms by employee, most family businesses received no subsidies. Many of these �rms have never received federal subsidies, including Onex Corp., George Weston Ltd., Thomson Reuters Corp., Empire Company, Power Corp., Rogers
Communications and GardaWorld Security.39 These companies have grown and provided hundreds of thousands of jobs on the strength of their own revenues and innovation.
EMPLOYMENT: WHERE CANADIANS WORK
In Canada, the 500 largest family-controlled businesses provide nearly 15% of all private sector jobs, or 1.6 million positions.40 In fact, the 0.3% of �rms that make up large Canadian enterprises account for one-third of all jobs, or about 3.5 million
positions.41 Between 2001 and 2011, just 0.2% created an astounding 46% of all new employment in Canada.42 Many of these employees work at the largest companies in the land, including many family-controlled businesses. In September of 2014,
Statistics Canada reported that 11 million of the 18 million employed Canadians worked in the private sector.43
BOX STORY: PUTTING CANADA TO WORK
Of Canada’s 25 largest companies by employees, 10 are family-controlled businesses that together employ over one million people,44 equivalent to the entire population of Saskatchewan. In 2011, the largest private employers were Onex Corp., George
Weston Ltd., Loblaw Companies, and Magna International. Rounding out the top 10 were Bombardier Inc., Thomson Reuters Corp., Empire Company, Power Corp., Rogers Communications and Garda World Security. These 10 companies are
responsible for close to 10% of Canada’s entire private sector employment. Onex Corp., founded by Winnipegger Gerry Schwartz, today employs 230,000 people worldwide.45 Loblaw, Canada’s largest grocery chain, has over 190,000 employees
nationwide, and is the country’s largest private-sector workforce.46
CENTREPAGE FOLD OUT MAP
This centre spread will consist of a map of Canada, identifying iconic institutions that have
bene�tted from investments or the philanthropic work of leading Canadian business families.
10 Examples:
Musquash Estuary (west of Saint John)
Segal Centre for Performing Arts (Montreal)
National Theatre School of Canada (Montreal)
Roy Thomson Hall (Toronto)
Rotman School of Management (Toronto)
Schulich School of Business (Toronto)
Museum of Human Rights (Winnipeg)
Carthy Foundation (Calgary)
Canada’s Sports Hall of Fame (Calgary)
Sauder School of Business (Vancouver)
EMPLOYMENT: QUALITY OF WORK LIFE
For Canada’s largest family-controlled businesses, investing in people is a top priority. Their success illustrates the value of this approach. The human resources �rm Knightsbridge notes that the best-managed companies in Canada put great emphasis
on their workers. These companies strive to create a strong sense of family and transparency in order to drive employee empowerment and passion, which fuels these companies’ strong customer focus, entrepreneurial spirit, and results-oriented
approach.47
Large �rms, many of them family-controlled businesses, typically provide better bene�ts. Insurance and pension coverage at large �rms is roughly four times that of small �rms. Workers at large �rms enjoy better fringe bene�ts, such as vacation pay, sick
leave and bereavement leave.48 The survey by the Canadian Council of Chief Executives found that the country’s largest �rms pay an average annual wage of over $64,000, well above the Canadian average of $58,000.49 This means a couple with one
member earning the average at a large �rm and one earning the Canadian average would rank within the top 10% of income-earning families in Canada.50
BOX STORY: REWARDING WORK AT WESTON
At Weston Foods and Loblaw, Galen Weston ensures employees receive generous compensation and bene�ts. They can take advantage of a variety of alternative work arrangements, including �exible hours, compressed work weeks and telecommuting.
Weston also manages an academic scholarship program for children of employees who attend post-secondary institutions. The company also helps cultivate high-potential employees with leadership training and formal mentoring, and offers career
planning services to support their long-term development.51
CORPORATE CITIZENSHIP: RESPONSIBLE PRACTICES
Increasingly, consumers and employees in Canada expect corporations to embrace a broader sense of values, beyond just pro�t.52 To stay in business, �rms must not only honour their economic responsibility but also account for the ethical or social impact
of their operations. Employee rights and opportunities, customer relations, respect for the environment, and the rule of law internationally have all taken on greater prominence. Such corporate citizenship bene�ts the business. A survey found that 90%
of Canadians are more likely to purchase goods and services from a company they believe to be socially and environmentally responsible.53
Business families are heeding the call. According to an annual survey conducted by Corporate Knights, several of Canada’s largest family-controlled businesses are among the top 50 corporate citizens in the country. The criteria include environmental
performance, taxes paid, innovation, pension fund, safety performance, and employee turnover. The ranking assesses how well companies demonstrate responsible business practices. Bombardier, Cascades, Rogers Communications and Loblaw
Companies are among the privately controlled enterprises on the 2014 list.54 In 2014, Bombardier ranked 24th out of the 100 top companies worldwide for corporate sustainability.55
BOX STORY: ENVIRONMENTAL RESPONSIBILITY AT SAPUTO
Launched by Lino Saputo in 1954 in Montreal, Saputo has become the largest dairy producer in Canada, with over 12,000 employees. Saputo is committed to environmentally responsible business practices. The �rm annually assesses, and improves, its
environmental performance according to a set of key indicators established in 2011. Saputo participates in the EnergyStar Challenge, a US government program that encourages manufacturing facilities to reduce their energy intensity by at least 10%
from an established baseline within �ve years.56
CORPORATE CITIZENSHIP: CODES OF CONDUCT
In Canada, corporate codes of conduct and ethics have become common, spelling out a �rm’s commitment to ethical conduct in the workplace, in business relationships, and with the community. Many of Canada’s business families have embraced this
approach. Maclean’s magazine ranks some of the largest family �rms in the top 50 for social responsibility, based on treatment of employees, environmental initiatives, and impact on local communities.57
BOX STORY: SERVING THE COMMUNITY AT SOBEY’S
From its humble origins as a meat delivery business in 1907, Sobey’s has grown into a
nation-wide food company, and as part of Empire Inc. has 1,500 corporate and franchised
stores across Canada and 85,000 employees. Sobey’s has a code of conduct that includes
a commitment to a working environment of trust, respect and safety. The company supports
national initiatives that enhance health and wellness, as well as community events and causes
in the neighbourhoods where its employees reside.58
BOX STORY: A HISTORY OF SUSTAINABILITY AT CASCADES
Cascades was reared on sustainability: the recovery of waste paper. The Lemaire brothers founded the paper products manufacturer in 1964 in Kingsey Falls, Quebec. It has grown to employ over 12,000 at 100 locations
in North America and Europe. Cascades develops unique three-year sustainable development reports that measures the company’s progress on 18 indicators, from energy consumption to ef�uent discharge to worker
health and safety.59
PHILANTHROPY: SPREADING THE WEALTH
Canada’s business families are engaged in an array of philanthropic and community-building activities, such as sponsorship, charitable work, volunteerism, community investments, and environmental sustainability. They donate to numerous causes and
organizations, including educational institutions, community services, service clubs, civic projects, arts and culture groups, athletic organizations, and environmental groups. Donations range from thousands to millions. Recently, Charles Bronfman
sold off 900 works from the Bronfman “Claridge” art collection at Waddington’s auction house, and donated the proceeds to Historica Canada, a promoter of Canadian history.60
Annually, Canada’s corporations make more than $2.3 billion in charitable donations, according to Imagine Canada, a national organization committed supporting the country’s charities.61 A 2006 study showed that 80% of all private-sector charitable
donations came from large �rms and 79% of large �rms engage in ongoing charitable initiatives, as compared to 22% overall.62 Imagine Canada’s ‘Caring Company Program’ consists of companies committed to championing community investment
projects.63 Its members include such large family businesses as James Richardson & Sons, Loblaw Companies, Power Corp. and Rogers Communications.
BOX STORY: COMMUNITY COMMITMENT AT POWER CORPORATION
Power Corporation, founded in 1925 by Arthur J. Nesbitt and Peter A. T. Thompson and brought under the leadership of Paul Desmarais in 1968, is an international management company with over 30,000 employees.
The �rm has a strong community focus, making corporate donations and investments, and encouraging employee volunteer initiatives. It supports organizations and initiatives in arts and culture, environment,
education and health, including the Canadian Paralympic Committee, the National Theatre School of Canada, and the Nature Conservancy of Canada.64
CHARITIES: STRENGTHENING THE NATION
Many of Canada’s business families have established their own foundations for charitable work. These charities support projects in many diverse areas, including the arts, education, the health sector, public policy research, environmental sustainability,
international development and social services. Canada’s independent private foundations distribute $1.5 billion annually to an array of charity programs.65 The Weston Foundation, for example, undertakes programs in education, land conservation,
science and neuroscience.66 In Calgary, the Carthy Foundation — created thanks to support from Coril Holdings, founded by Ron Mannix — supports youth and environmental initiatives.67
BOX STORY: ONE DROP FOUNDATION
Guy Laliberté founded the entertainment company Cirque de Soleil in 1984, which gained tremendous success. In 2007, Laliberté launched the One Drop Foundation with the ambitious goal of ensuring everyone in the world gains access to clean drinking
water. The foundation makes use of the circus arts, folklore, popular theatre, music, dance and the visual arts to promote education, community involvement and public awareness of the need to improve water supplies. The foundation also supports
technical projects in developing countries that will improve access to water and enhance related elements of community life, such as food security and gender equality.68
BOX STORY: SKOLL FOUNDATION
Jeff Skoll, the president of eBay, founded the Skoll Foundation in 1999, with a mandate to drive large-scale change by investing in social entrepreneurs. The Foundation has awarded over $350 million to nearly 100 entrepreneurs and 80 organizations on �ve
continents. The foundation co-produces the annual Skoll World Forum on Social Entrepreneurship with the Skoll Centre for Social Entrepreneurship at the Saïd Business School at the University of Oxford. Skoll’s Capricorn Investment Group supports
electric cars, solar panels and rice plantations in Tanzania, while the Skoll Global Threats Fund is tackling climate change, water scarcity, pandemics, nuclear proliferation and the Middle East con�ict.69
CULTURE: INSTITUTIONS AND PROGRAMS
Many iconic cultural institutions and programs in Canada owe their existence to business families, which recognize that wealth carries a civic obligation. Across the country, Canada’s wealthiest citizens have donated millions to universities, hospitals, opera
companies, ballet troupes, theatres, and other cultural and scienti�c institutions.70 In 2014, the Rogers family made the single largest monetary gift in Canadian history, donating $130 million to establish the Ted Rogers Centre for Heart Research.71
Other examples abound. In Montreal, the Bronfman family built the Segal Centre for Performing Arts, originally named the Saidye Bronfman Centre for the Arts. In Toronto, Roy Thomson Hall was built thanks to a donation from the Thomson family.
In Winnipeg, the recently opened Canadian Museum for Human Rights was the brainchild of media mogul Izzy Asper and built through the donation and efforts of the Asper Foundation. In Calgary, the Riddell Family Charitable Foundation is a key
supporter of Canada’s Sports Hall of Fame. Clay Riddell is founder of Calgary-based Paramount Resources. In 2014, Riddell made an enormous donation to the Alberta Children’s Hospital, where his wife, now deceased, worked for over three decades.72
BOX STORY: CELEBRATING GREAT WRITING
Literature needs benefactors. Some of Canada’s greatest literary prizes are the creation of business families. Sponsored by Rogers Communications, the Rogers Writers’ Trust Fiction Prize is an annual award for Canada’s best work of �ction. The 2014 winner
is Manitoba writer Miriam Toew’s family tragedy All My Puny Sorrows. The Hilary Weston Writer’s Trust Prize is awarded to the best work of non-�ction, which in 2014 was This Changes Everything, Naomi Klein’s examination of the relationship between
capitalism and climate change. These prizes have helped some of Canada’s strongest burgeoning writer’s gain widespread public attention.
SPORTS: PRESERVING CANADA’S GAME
Canada’s greatest pastime owes much to the nation’s business families. As with other professional sports, hockey is a private-sector endeavour that requires leaders of industry to step up. In Canada, many of our wealthiest entrepreneurs have made huge
commitments to the ownership and operation of hockey franchises, ensuring “our” game continues to be played in many venues across the country.
In 2003, Eugene Melnyk purchased the Ottawa Senators, rescuing the team from bankruptcy, and since then vowing to keep the franchise in Ottawa.
In 2008, Daryl Katz purchased the Edmonton Oilers, and demonstrated his commitment to the team by negotiating with the city the construction of a new $480-million downtown arena.
In 2009, the Molson family, renowned for Molson Brewery, reacquired ownership of the storied Montreal Canadiens, vowing to maintain the team’s proud traditions.
In 2011, David Thomson helped bring the Jets back to Winnipeg, providing the real estate necessary to build a new 15,000-seat arena in exchange for a partial stake in the team.
In 2014, Rogers acquired the rights to most NHL games broadcast in Canada, and even took ownership of the iconic Hockey Night in Canada program and the renowned “Coach’s Corner” segment starring Don Cherry and Ron McLean.
EDUCATION: TRAINING FUTURE BUSINESS LEADERS
Canada’s business families have contributed to the development of some of the top business schools in Canada. In 2014, the Schulich School of Business and Rotman School of Management were ranked among the Corporate Knights 100 most-sustainable
MBA programs worldwide. The rankings are based on how well the schools have integrated sustainability into the learning process.73
In 1995, the Faculty of Administrative Studies at York University changed its name to the Schulich School of Business upon receiving a substantial donation from entrepreneur Seymour Schulich. Today, the Schulich MBA program is ranked No. 1 in the
world by the Aspen Institute (a leadership institute based in Washington, D.C.) for doing the best job of preparing future business leaders for the environmental, social and ethical complexities of modern-day business.74
Also in 1995, at the University of Toronto, the School of Business was renamed the Rotman School of Management in honour of graduate and donor Joe Rotman, founder of the Clairvest Group. The School is ranked ninth worldwide by the Financial Times
for faculty research.75 Both schools are ranked among the top seven business schools in Canada.76 The list also includes the Sauder School of Business at the University of British Columbia, one of the world’s leading business schools. In 2003, the
university’s business school was renamed after receiving a substantial donation from William L. Sauder, founder of Sauder Industries.77
MEDIA: CONNECTING THE PUBLIC
Pick up the newspaper, turn on the television, or send an email, and you’re likely to use the product of a company founded by one of Canada’s business families. Many of the largest Canadian media enterprises were launched decades ago by business
families, including those of Ted Rogers, Roy Thomson, and J.R. Shaw.
Rogers Communications provides millions with broadcasting, publishing, internet and cellular services. The company owns several Canadian magazines, including the popular weekly current affairs publication, Maclean’s.
Similarly, Thomson Reuters is a major multinational mass media �rm created by the purchase of the Reuters Group by the Toronto-based Thomson Corporation, which grew from a single newspaper purchased by Roy Thomson in 1934 into a global media
empire that includes ownership of the Globe and Mail and Reuters News Agency.
In Calgary, Shaw Communications provides telephone and Internet services and has ownership in television networks, including Global. Shaw was launched in 1966 by J.R. Shaw as a cable television company that grew to have media interests across
Canada and in the US.
CONCLUSION: SEEKING CORPORATE CHAMPIONS
Their in�uence persists. The legacy of our business families permeates the top business topics of the day. In a recent issue of The Globe and Mail, a random selection of business stories makes the point: stories on Rogers Communications’ efforts to reach a
younger audience, Bombardier’s assessment of international investments, Maple Leaf Foods’ plans for restructuring, and Thomson Reuters’ position on acquisitions.78
In 2014, over a dozen founders and senior executives of family-controlled businesses ranked among the top 50 corporate leaders with the greatest in�uence in politics and policy in Canada.79 Without these hard-working risk takers – Canada’s “builders” –
the Canadian economy would truly have become the branch plant economy so feared by many. Canadians are wary of such a development, expressing concern about head of�ces being “hollowed out” by foreign acquisitions.80
Canadian business families create the revenue, taxes, and employment that puts Canadians to work, at home, in local communities, where people want to live, raise their families, and retire. Canada’s business families support the charities and institutions
– in the arts, education, and sports – that the population holds dear. They are the entrepreneurs who take risks, diversify, innovate, compete, and persevere. Each day, in all facets of Canadian life, their legacy lives on, while their determination forecasts
the future of the nation.
APPROACH TO THE RESEARCH
The original research of this report covered revenues, tax �lings and employment �gures for Canadian family-controlled businesses. This information was sought out largely through publicly available information provided by Statistics Canada and Industry
Canada. For revenues, available annual corporate returns for 2009 to 2011 were used, as well as data published in the Globe and Mail’s ROB1000 and ROB350. The ROB data is not comprehensive as it covers only the top 1,000 and 350 companies; but
this distinction is accounted for in the text of this report. For taxation statistics, available data for 2009-2011 were used from the Financial and Taxation Statistics (FTS) table. For labour force estimates, available data for 2011-2013 from Labour Force
Survey estimates (LFS) were used.
To convert these data into the “story” of the contribution of Canada’s business families, additional research was undertaken that consisted, initially, of a thorough search through current and historical materials, beginning with books obtained from
university and public bookstores, from libraries, and downloaded from online sources. Other materials used included magazines, newspapers articles, and reports accessed online from the websites of Canadian, American and European think tanks and
research institutions. Materials were also sourced from many of the websites of the companies researched.
Original Research: CMG Group Ltd.
Supplemental research and writing: David Wylynko, West Hawk Associates
Design and layout: Lisa XXXXXXXXX, XXXXXXXXX
(Endnotes)
1
APPROACH TO THE RESEARCH
To convert this data into the “story” of the
contribution of Canada’s business families,
additional research was undertaken that
consisted, initially, of a thorough search through
current and historical materials, beginning
with books obtained from university and public
bookstores, from libraries, and downloaded from
online sources. Other materials used included
magazines, newspapers articles, and reports
accessed online from the websites of Canadian,
American and European think tanks and
research institutions. Materials were also sourced
from many of the websites of the companies
researched.
Original Research: Creaghan McConnell Group Ltd.
Research and writing: David Wylynko, West Hawk Associates
Design and layout: Lisa Peter Ross, Hill Street Ad & Design
Business Families Report FINAL.indd 24 17/02/2015 10:26:36 AM
THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY Business Families: Building a Brighter Future | 25
1 Newman, Peter C., 1988. Titans: How the New Canadian Establishment Seized Power (Toronto: Viking), p. 5.
2 Canadian Council of Chief Executives, 2014. Leadership is...Annual Report 2014. Ottawa, p. 17.
3 Burney, D. and F.O. Hampson, 2014. Brave New Canada (Montreal & Kingston: McGill-Queen’s University Press), pp. 155-172.
4 McQuaig, L. and N. Brooks, 2010. The Trouble with Billionaires (Toronto: Penguin Canada).
5 Freeland, C., 2012. Plutocrats: the Rise of the New Super-Rich and the Fall of Everyone Else (Toronto: Doubleday).
6 Berton, P., 1968. The Smug Minority (Toronto: McClelland & Stewart).
7 Bothwell, R., 2006. The Penguin History of Canada (Toronto: Penguin Canada), p. 404.
8 Conrad, M., 2012. A Concise History of Canada (New York: Cambridge University Press), p. 226.
9 Morton. D., 2006. A Short History of Canada (Toronto: McClelland & Stewart), p. 335.
10 McGoogan, K., 2013. 50 Canadians Who Changed the World (Toronto: HarperCollins Publishers).
11 Newman, p. 12.
12 Forbes Magazine. 2014. Volume 194 Number 5, Oct. 20, 2014, p. 33.
13 Newman, p. 29.
14 Sobeys Corporation, 2014. http://corporate.sobeys.com/history/. Accessed November 2014.
15 The Globe and Mail, 2013. “Top 1000: Exclusive rankings of Canada’s most pro�table companies.” www.theglobeandmail.com/report-on-business/rob-magazine/top-1000/top-1000/article12829649. Accessed November 2014.
16 Creaghan McConnell Group (CMG). Top 500 (Excel �le unpublished), 2014. The Globe and Mail, 2013. Top 1000. Accessed November, 2014. The Globe and Mail, 2013. Canada’s 50 biggest private companies http://www.theglobeandmail.com/report-on-business/top-1000/article12832820/. Accessed November, 2014.
17 CMG, 2014.
18 Burney and Hampson, pp. 156.
19 Burney and Hampson, p. 159-160.
20 Burney and Hampson, p. 165.
21 Research Infosource, 2013. www.researchinfosource.com/pdf/Top%20100%202013%20-Final%20Article.pdf. Accessed November 2014.
22 Canadian Council, p. 14.
23 Burney and Hampson, pp. 158-159.
24 Burney and Hampson, p. 167.
25 Burney and Hampson, p. 164.
26 Burney and Hampson, p. 170.
27 Burney and Hampson, p. 166.
28 Department of Finance, 2014. www.�n.gc.ca/tax-impot/2013/html-eng.asp. Government of Canada. Accessed November 2014.
29 Golombek, Jamie, 2013. “Here’s what the wealthiest of the wealthy in Canada earn — and pay in taxes.” Financial Post, March 16, 2013.
30 Milke, M., 2013. Tax Me I’m Canadian: a taxpayer’s guide to your money – and how politicians spend it (Calgary: Thomas & Black), p. 111.
31 Yalnizyan, A. 2010, The Rise of Canada’s Richest 1% (Ottawa: Canadian Centre for Policy Alternatives), p. 3.
32 Burkhauser, R. V., J. Larrimore, and K. I. Simon, 2012. “A ‘Second Opinion’ on the Economic Health of the American Middle Class,” National Tax Journal 65, 1 (March 2012): pp. 7-32.
33 Milke, p. 111.
34 Statistics Canada, 2014. http://www.statcan.gc.ca/daily-quotidien/141118/dq141118b-eng.htm
35 Milke, pp. 110-111.
36 Canadian Council, p. 26.
37 Canadian Council, p. 5.
38 Canadian Council of Chief Executives, 2014. Total Tax Contribution: Surveying the Canadian Council of Chief Executives. Ottawa, p. 21.
39 Milke, p. 58.
40 CMG, 2014.
41 Burney and Hampson, p. 167.
Endnotes
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26 | Business Families: Building a Brighter Future THE IMPACT OF PRIVATELY CONTROLLED BUSINESSES ON CANADA’S ECONOMY
42 Canadian Council, p. 18.
43 Statistics Canada, 2014 http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labr66a-eng.htm. Government of Canada. Accessed November 2014.
44 Milke, p. 58.
45 Power & In�uence, 2014. “The 50 Business Leaders.” Fall 2014 Volume 3 Number 3, p. 36.
46 Power & In�uence, p. 60.
47 Knightsbridge, 2014. http://kbrs.ca/node/229. Accessed November 2014.
48 Canadian Council, p. 19.
49 Canadian Council, p. 22.
50 Hunter G., M. Sanchez, and F. Douglas. 2012. Incomes of the One Percent (and everyone else) in Canada (Regina: University of Regina), p. 6.
51 George Weston Limited, 2014. http://www.weston.ca. Accessed November 2014.
52 Sexty R.W., 2014. Canadian Business and Society: Ethics, Responsibilities & Sustainability (McGraw Hill Education), p. 18.
53 Sexty, p. 14.
54 Corporate Knights, 2014 www.corporateknights.com/wp-content/reports/2014_Best_50.pdf. Accessed November 2014.
55 Global 100, 2014. http://global100.org. Accessed November 2014.
56 Saputo, 2014. www.saputo.com/futures-candidates/environment/default.aspx?langtype=4105. Accessed November 2014.
57 Maclean’s, 2014. “Top 50 socially responsible corporations: 2014.” Maclean’s, June 5, 2014. www.macleans.ca/work/bestcompanies/top-50-socially-responsible-corporations-2014. Accessed November 2014.
58 Sobeys Corporation, 2014. www.sobeyscorporate.com/en/Our-Company/History.aspx. Accessed November 2014.
59 Cascades, 2014. www.cascades.com/en/sustainable-development/overview. Accessed November 2014.
60 Canadian Business, 2013. “Canada’s 100 Wealthiest people.” Canadian Business, Nov. 21, 2013. http://www.canadianbusiness.com/companies-and-industries/richest-people-in-canada-2013-2. Accessed November 2014.
61 Sexty, p. 170.
62 Canadian Council, pp. 24-25.
63 Imagine Canada, 2014. www.imaginecanada.ca/our-programs/caring-company-program. Accessed November, 2014.
64 Power Corporation, 2014. www.powercorporationcommunity.com/en. Accessed November, 2014.
65 Sexty, p. 174.
66 Weston Foundation, 2014 www.westonfoundation.org. Accessed November, 2014.
67 Carthy Foundation, 2014. www.carthyfoundation.org. Accessed November, 2014.
68 One Drop. 2014. http://www.onedrop.org/en/projects/projects-overview.aspx. Accessed November 2014.
69 Newman, p. 123.
70 Newman, p. 123.
71 Maclean’s, 2014: http://www.macleans.ca/society/rogers-family-donates-130-million-to-heart-research/
72 Canadian Business, 2013. www.canadianbusiness.com/companies-and-industries/richest-people-in-canada-2013-2. Accessed November 2014.
73 Corporate Knights. 2014. The Green Graduate: The Global 100 Sustainable MBAs (Toronto: Corporate Knights), p. 42.
74 Schulich School of Business, 2014. http://schulich.yorku.ca/client/schulich/Schulich_-LP4W_LND_WebStation.nsf/page/School+Overview?OpenDocument. Accessed November 2014.
75 Rotman School of Management, 2014. www.rotman.utoronto.ca/Connect/AboutRotman/History.aspx. Accessed November 2014.
76 Eduniversal Ranking, 2014. www.eduniversal-ranking.com/business-school-university-ranking-in-canada.html. Accessed November 2014.
77 Sauder School of Business, 2014. www.sauder.ubc.ca/About. Accessed November 2014.
78 Dobby, Christine. 2014. “Bad language and leather: Roger-Vice partnership targets millennials.” The Globe and Mail, Oct. 31, 2014.
79 Power & In�uence, p. 4.
80 Burney and Hampson, p. 148.
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Alofs, Paul, 2012. Passion Capital: The World’s Most
Valuable Asset. Toronto: Random House of Canada.
Berton, Pierre, 1968. The Smug Minority. Toronto:
McClelland & Stewart.
Black, Conrad, 2014. Rise to Greatness: The History
of Canada from the Vikings to the Present. Toronto:
McClelland & Stewart.
Bothwell, Robert, 2006. The Penguin History of
Canada. Toronto: Penguin Canada.
Burney, Derek H., and Fen Osler Hampson, 2014.
Brave New Canada. Montreal & Kingston: McGill-
Queen’s University Press.
Canadian Council of Chief Executives, 2014.
Leadership is…Annual Report 2014. Ottawa:
Canadian Council of Chief Executives.
Classon, George S., 1988 (Signet edition). The
Richest Man in Babylon. New York: Signet.
Conference Board of Canada, 2013. Sharing
our Impact: Annual Report 2012-2013. Ottawa:
Conference Board of Canada.
Conrad, Margaret, 2012. A Concise History of
Canada. New York: Cambridge University Press.
Hunter, Garson, Miguel Sanchez and Fiona
Douglas, 2012. Incomes of the One Percent (and
everyone else) in Canada. Regina: University of
Regina.
Mackenzie, Hugh, 2015. Glory Days: CEO Pay in
Canada Soaring to Pre-Recession Highs. Ottawa:
Canadian Centre for Policy Alternatives.
Further Reading
McQuaig, Linda and Neil Brooks, 2010. The
Trouble with Billionaires. Toronto: Penguin Canada.
Milke, Mark, 2013. Tax Me I’m Canadian: a
taxpayer’s guide to your money – and how politicians
spend it. Calgary: Thomas & Black.
Morton, Desmond, 2006. A Short History of
Canada. 6th ed. Toronto: Random House of
Canada.
Newman, Peter C., 1975. The Canadian
Establishment. Vol.1. Toronto: McClelland and
Stewart.
Newman, Peter C., 1978. Bronfman Dynasty: The
Rothschilds of the New World. Toronto: McClelland
and Stewart.
Newman, Peter C., 1981. The Acquisitors:
The Canadian Establishment. Vol. 2. Toronto:
McClelland and Stewart, 1981.
Newman, Peter C., 1998. Titans: How the New
Canadian Establishment Seized Power. Toronto:
Viking.
Piketty, Thomas, 2014. Capital in the Twenty-
First Century. London: Belknap Press of Harvard
University Press.
Sexty, Robert W., 2014. Canadian Business and
Society: Ethics, Responsibilities & Sustainability.
McGraw Hill Education.
Yalnizyan, Armine, 2010. The Rise of Canada’s
Richest 1%. Ottawa: Canadian Centre for Policy
Alternatives.
Business Families Report FINAL.indd 27 17/02/2015 10:26:37 AM
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