Rod McQueen's Blog, page 16

William G. Davis 1929-2021

If you were sitting in an audience that Bill Davis was addressing, you knew that no matter his topic, you were in for some fun first. As a native son of Brampton, Ont., there would be more than a few complimentary remarks about his home town, what a great place it was to live and how investors were always welcome. Next, Davis – who spoke with the speed and agility of an auctioneer – would begin to pick out people that he knew and take a few pokes at the expense of each in turn. As Davis worked his way...

Unreal estate

During the last two years, the average price for a detached house in Canada has risen 25 percent, even more in Toronto. As a result, many hopeful first-time home buyers have been priced out of the market. This go-go period is all so reminiscent of the run-up in the 1980s that was followed by a 50 percent drop in values during the recession of the 1990s. It took until the early 2000s for values to get back to where they had been.
I’m not predicting a repeat performance. This economy is stronger … at the moment. But I do think that the current situation calls for a seachange in the way houses are sold and by whom. But first, a little background on the business of real estate. With the sale of a house, it’s the vendor who pays those who helped do the deal. The price is steep; 5 percent of the sale price, or $50,000 on a $1 million property. Individual offices have different internal arrangements, but essentially the money is shared by four people: the listing agent and the listing agent’s broker as well as the selling agent and the selling agent’s broker.
Do one of those deals every month and you could be making $150,000 a year. And therein lies part of the problem. In a good market, every Tom, Dick and Harriet prepares to flee their former career by taking some courses in their spare time, doing some simulated deals and they’re ready to join the real estate business. There are more than 50,000 licensed registrants in Ontario alone.
To my mind, this process creates the potential for greedy acts by too many newcomers who may not see real estate as a long-term career that builds slowly, one client at a time. As a result, you get agents pricing a property below market value just to create the frenzy of a bidding war.
The solution is simple. First, make the licensing requirements to join the real estate business more onerous. Second, create an open bidding system so all participants clearly know what the other bids are. With both changes in place, more heightened ethics and better information will be in play. Only the greedy could disagree.

Joyce McKeough 1937-2021

For Joyce McKeough, politics was a precious part of her life. Her father, David Walker, was a member of the House of Commons, a cabinet minister in the John Diefenbaker government, and later, a senator. Her husband, Darcy, served in the Ontario Legislature for fifteen years and was Treasurer in the Bill Davis government.
Educated at Branksome Hall and Trinity College at the University of Toronto, Joyce had been presented at court to Queen Elizabeth and Prince Philip and came away with a vivid remembrance of “the devastating eyes of the Prince.” Joyce was working at an advertising agency, Ronalds-Reynolds, when she was introduced to Darcy by a mutual friend in 1964. They were married the following year. Five days ago, she died at home in Bally McKeough, where Darcy was raised. A closed funeral was held today.
As an avid gardener, Joyce helped beautify the grounds of Bally McKeough. (Bally is the Irish word for homestead or place.) The sprawling lawn at the back of the house runs to a bluff with views of Lake Erie where they built seven terraces right down to the water’s edge thirty-five feet below. Between the railway ties bloom forsythia, spirea, daffs and Russian sage. Oh, and there was one other important amendment. Having grown up in Toronto with its hills and ravines, the flatlands around Chatham bothered her so the earth dug for a new trout pond was mounded to create a “hill” nearby.
Locals kept a close watch. Once, when they were doing some remodelling to the house, a local man ran into Darcy and asked, “I hear you’re putting on an addition. Is Mrs. McKeough in the family way?” Given that she and Darcy were both in their sixties at the time, they took the query as a compliment. Jogging and skiing kept her fit. Her father’s urgings kept her involved when he said, “You can be the grovelling wife or you can make it work for you.” Entertaining Peter Lougheed, breakfast with Brian Mulroney, and tea with Margaret Thatcher were just a few of the ways she made it work.
When Darcy’s memoirs were nominated for the 2016 book award presented by the speaker of the Ontario Legislature, Joyce wanted to remain after the ceremony. “This may be the last time I’m in the Legislature for something personal, but Darcy’s tired and wants to leave,” she said. “My mother always told me, ‘Stand by your man.'” Then she paused, laughed, and said, “Mothers!” They left together. Arm-in-arm. As always.

 

 

 

 

 

 

 

 

 

 

 

 

Publish and perish

At first glance, Google appears to be doing what it should have done long ago, making global product and licensing arrangements that will pay billions of dollars for reproducing other peoples’ articles. Until now, the originating organization received no payment for what clearly has been nothing less than copyright infringement. Around the world Google has signed with the Murdoch-owned News Corp. as well as media organizations in Germany and Australia.
This week, Google announced deals with eight Canadian participants, including the Winnipeg Free Press, the Globe and Mail and Métro Média. That’s only a fraction of the organizations that exist, but Google says there are more such deals to come. We’ll see how many that actually means. Moreover, since financial details have not been made public, there’s no way of knowing how much this offering will actually benefit Canadian outlets. The federal government has been talking about forcing the likes of Facebook and Google to pay for articles they use, but that may just be so much election palaver.
Under the new deal, in addition to receiving payment for articles, the Canadian publications will be able to sell online advertising around those stories. And they can also sell digital subscriptions, something for which Canadians don’t seem to be clamouring. For all the gravitas of the Globe and Mail, for example, in some of its markets the Globe has been signing up fewer digital subscriptions than the New York Times.
Google has further committed over the next three years to train 5,000 Canadian journalists and journalism students on improving their digital skills. Google says this will be in addition to the 1,000 it has already trained. There will also be boot camps for budding news entrepreneurs as well as research projects to help publishers better serve their local communities.
I guess I should welcome all this largesse but I have to say that it does not correspond to the type of journalism that I practiced for thirty-odd years. Writing about business, as I did for most of that time, meant that I tried to conduct careful and accurate research, make sure I had sufficient knowledgable sources on every story, and above all, retain objectivity. This Google money might be welcome to publishers, but for the working stiff in the newsroom it’s just an outstretched hand trying to draw journalists ever closer to the Google orbit. The trillion-dollar company already has plenty of power. This money is meant to curry more favour, not improve an imperilled product.

Boys and their toys

We all know about type A personalities and their driven behaviour, but some senior business leaders have taken their private passions to new heights. Literally. Next month Amazon’s Jeff Bezos will take a ride to space in a reusable rocket launched by Blue Origin, his space company. This is not just any ride, this is the maiden flight with passengers. Coming along with him will be his brother, an unnamed individual who paid US$30 million for the privilege, as well as an astronaut yet to be named. In fact, the rocket, called the New Shepard, is named after Alan Shepard, who in 1961 was the first American in space. Maybe it’s Shepard who will be aboard.
The entire circuit up to 350,000 feet – almost but not quite into orbit – and down again helped by parachutes to land somewhere into the briny sea takes all of eleven minutes. Three of those minutes will, once everyone is unbuckled, provide a weightless zone where they can float about with grins wider than a crescent moon. For his part, Bezos is facing the danger despite his earthbound duties as founder, executive chair and largest shareholder of Amazon, the world’s biggest internet company.
Another modern-day billionaire, Elon Musk, has been working the same territory. Between them, Bezos and Musk are worth something like US$350 billion, a sum as astronomical as their plans. Musk’s SpaceX rockets are busy taking supplies to the International Space Station and have a contract with NASA for missions to the moon by 2024. Musk, whose tweets can move the market value of Bitcoin, also intends to colonize Mars with the first flight arriving on the red planet as early as 2026. He has admitted there are perils, saying of some of the early flights, “You might not come back alive.”
While all of this seems unlikely or impossible, or both, aren’t such adventures precisely what the human race is all about. In 1492, Christopher Columbus was looking for a faster way to get from Europe to the East Indies by heading west. Instead, he bumped into America, and became famous for finding something he didn’t know was there. But there must have been many who watched him sail away from Spain, thinking he was crazy. But without crazy people, there’d be less progress for the rest of us. May Jeff Bezos and his fellow high-flyers survive and his ideas thrive.

 

 

 

Down memory lane

For the past several days I’ve been working my way through three large cartons of family memorabilia, some of which I have never seen before. My mother must have been the initiator. Among the souvenirs is her mother’s teaching certificate from 1910. Another sign my mother was the original keeper is that the boxes contain every letter I ever wrote to my parents beginning in 1963 from Western, through my first job in Toronto, time in Ottawa and up to 1980 when I was at Maclean’s. That was the year she died. My father must have held on to everything, but added little, before his death in 1996. The next generation added photos, report cards and artwork among other items, but I never before realized the extent of the collection.
The revelations include letters exchanged by my parents in the 1930s before they were married. My mother was working for a drug wholesaler in Toronto, my father for Canadian Gypsum in Guelph. They dated as early as 1931 according to a supper club menu they both signed. There are also letters from another admirer my mother stopped seeing in 1933. Still, it wasn’t until 1940 that my father finally popped the question. There is no explanation why it took so long. Maybe he was just saving up his money living in a boarding house in the midst of the Depression. In one letter, he points to a university friend working at Eaton’s who was complaining about having no prospects and making only $20 a week.
I also was reminded of a few things about myself that I had forgotten. When I was press secretary for Robert Stanfield I wrote to my parents in March 1974 saying that the minority government of Pierre Trudeau wasn’t going to last much longer and there would likely be a July election. “Win or lose,” I said, “I’m getting out. Three-and-a-half years is long enough in a job like this.” There was indeed a July election. Stanfield lost; I left. We’ll never know what I would have done had he won.
And that leads to some lessons about life. Everything happens for a reason. If my parents had married earlier would I have been born? More obvious, you grab your opportunities when they come. And pick yourself up when you fall. Looking back, one experience seems to inexorably lead to another as if there were a plan. Would you have wanted to know what that plan was at the time? I think not.

Encore une fois

The saga of Quebec language and powers seems to have been debated for most of my adult life. Quebec has always been on the verge of eruption or separation. Following the 1976 election of Rene Levesque, Anglophone Quebecers no longer felt they had a home. Companies left the province and relocated all or part of their head offices elsewhere. The value of the C$ skidded from US$1.03 to US$0.70 during the next decade.
Referenda in 1980 and 1995 tested the appetite for separation. During the 1995 vote, many Canadians rallied in Montreal to keep Quebec in Confederation. The outcome was a narrow rejection of sovereignty by 50.6% to 49.4% Prime Minister Brian Mulroney tried valiantly to find consensus through the Meech Lake and Charlottetown Accords but could not reach accommodation with Quebec. Prime Minister Stephen Harper recognized Quebec as a “distinct society” within Canada.
The recent round of announcements from Quebec has really aroused my ire. First, Quebec will no longer allow religious symbols such as the kippa, head scarf, and turban to be worn by teachers, police and public servants. Second, all immigrants must be able to communicate with the government in French within six months of their arrival. Third, French is to be the common language of Quebec.
To do this, the Quebec government is pressing into service the “notwithstanding” clause in the Canadian Constitution. My recollection of that clause was that it was to be employed only in the most exceptional of circumstances. Now it is being used willy-nilly to deny rights and freedoms for multiple groups within Quebec. This is not what the premiers and Pierre Trudeau intended in 1982. Justin Trudeau knows that fact full well but has fallen strangely silent on the topic as have the other party leaders.
There used to be a time when concord was not only desirable but earnestly sought. Every effort was was made to maintain Quebec’s place in Canada. Such activity no longer seems either possible or palatable. Some of what Quebec is now proposing is simply racist; the rest is surely ruinous. As Pierre Trudeau used to say: “Who speaks for Canada?”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Birdland

A few weeks ago I reported on the sights and sounds of spring at the farm. As Bachman-Turner Overdrive sang, “B-b-b-baby you ain’t seen n-n-nothin’ yet.” During the past few days, we’ve been overwhelmed by the next phase of this wondrous season of the year. Plants in the garden continue to sprout, the trilliums provide a carpet in the woods, and leaves on the trees are unfolding in so many shades of green they must have come from a painter’s magic palette.
Among the more interesting new avian arrivals is a pair of eastern bluebirds that have taken up residence in one of the birdhouses we put up just for that purpose. (Note to others who might be on the way; there are still three available, each with a pond view.) The male has a vivid, almost iridescent blue back and a brick-red front. The female has similar coloration, just a little more muted.
She does all the work, gathering grasses to build their nest. He presides proudly from a perch on the birdhouse next door. Once he drove off a female red-winged blackbird who seemed bent on trouble. Now settled in, the female bluebird spends much of her time peering out of the tiny hole as if to see what’s happening in the world around. On the pond, a mallard remains, and a kingfisher flashes his crested self back and forth.
On May 14, a day earlier than usual, two ruby-throated hummingbirds appear at their feeder, hung out just the day before because they always return right around the same time. This would seem to be the same pair as last year. He is still angry with her, driving his mate away when she wants to put her long proboscis into the sweetened water and draw out a drink. Apparently she continues to allow his shenanigans. A Baltimore oriole takes a few sips, his black head and brilliant orange body a giveaway to his identity. The bird book says he likes to taste sweets, too.
Other sightings include rose-breasted grosbeak, red-bellied woodpecker, brown thrasher, and northern mockingbird. The latter’s song is unique, three trills, followed by three different trills, then a third set, all repeated over and over. In the woods are warblers, so high in the trees as to be unidentifiable. Lengthy gazes yield one of birding’s few diseases: warbler neck. It’s small price to pay for so many welcome visitors. And no masks required.

 

 

 

 

 

 

 

 

 

 

 

 

Fleeting fame

I’ve been a Blue Jays season subscriber, along with a small syndicate of others, sharing a pair of tickets since the team’s founding in 1977. Of all the players through all the years whose professional career has included Toronto, my all-time favourite is Roberto Alomar. At second base he had no equal. His range and ability to get to a ball hit anywhere near him was astounding. A lifetime .300 hitter, he was an All-Star for a dozen years, and a driving force when the Jays twice won the World Series.
So I was saddened by the news that he had been found guilty after allegations recently made by one individual of sexual misconduct in 2014. Following an investigation by Major League Baseball (MLB) he was placed on the league’s “ineligible” list which means he’s eternally damned. Alomar lost his MLB consulting contract and the Blue Jays piled on by removing his Level of Excellence designation at the Rogers Centre as well as his Hall of Fame banner. By the sounds of Alomar’s comments he has not been allowed to fully defend himself before MLB. He was quoted as saying that he hoped “this allegation can be heard in a venue that will allow me to address the accusation directly.”
Treatment by the Baseball Hall of Fame was more sanguine. Alomar’s plaque will continue to hang at the museum in Cooperstown, N.Y. The Hall of Fame takes the view that its mandate is to preserve and honour history based on the code of times past, what the world looked like when that particular player was active. Changing social mores or other recent considerations simply don’t apply.
Differing views have come to impact our opinion of other more historic figures. Sir John A. MacDonald, Canada’s founding father, has recently been found wanting because residential schools were said to be his idea. There’s no question they turned out to be hellholes for Indigenous young people but I would argue that terrible outcome was not Macdonald’s fault. However, the opposite view has come to prevail. Macdonald’s name is being scrubbed off buildings; his statues are being carted away.
I have a bust of Sir John sitting on a corner of my office desk. He’s been supervising my work for years and will carry on doing so. Alomar may not have similar commemoration in my space, but his playing career will also continue to be honoured by me. They both will always have a revered place in my heart and in my head.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patience and persistence

Regular readers know how much I enjoy a well-written memoir by a business leader. Such a book is “Lessons Learned on Bay Street: The Sale Begins When the Customer Says No,” by Donald K. Johnson. Johnson’s distinguished career as an investment banker started in 1963 at Burns Bros. and Denton and continued through various mergers until he became president of Burns Fry and then vice-chair of BMO Nesbitt Burns. Now eighty-five, he’s as active as ever.
Johnson’s grandparents, on both sides of the family, moved from Iceland to Manitoba in the 1880s as did many others after a volcanic eruption. His father died young, leaving his mother to raise four children in Lundar, 60 miles north of Winnipeg. Sensing that Donald was intelligent she moved the family to Winnipeg so he could attend university. He graduated in engineering and followed up with an MBA from The University of Western Ontario.
During his Bay Street career, Johnson adopted several one-liners including: Never give up; Laughter is the best medicine; and Never put off until tomorrow what you can do today. Some people might scoff at such simple sayings, but they work. Johnson was also told early on to keep a list of contacts; his list now numbers more than 6,000. He keeps healthy by watching his diet, walking 10,000 steps a day, doing transcendental meditation and is asleep by 9:30 p.m.
Johnson is not afraid to chase opportunities. Starting in 1994 he regularly approached Warren Buffet, attended his annual meetings, offered him deals, and even sent a CD by Paul Anka, a singer they both admired. Finally, in 2017 Johnson won over Buffet when Berkshire Hathaway invested in Home Capital Group, a struggling Toronto mortgage lender. Patience and determination, Johnson would say, citing U.S. President Calvin Coolidge.
Johnson’s only real trouble came from Jack Lawrence, his boss at Burns Fry for five years. “I disliked Jack, and I don’t think I was alone on the management team in feeling that way,” writes Johnson who found Lawrence abrasive and uninspiring. “If there was one thing I learned from him, it was how not to manage people.”
As a philanthropist, Johnson has donated to more than three hundred Canadian charities. His largest gift is $15 million to Toronto Western Hospital for the Eye Institute that bears his name. Johnson has also enabled others through his lengthy fight with Ottawa so donors can give shares in public companies to charities without having to pay capital gains taxes. Taxes were cut in half in 1997 and fully removed in 2006. Most years since, charities have received $1 billion in gifts of listed securities from individual and corporate donors. Since then, he has pushed for the exemption to include private company shares and real estate. Johnson will be monitoring the budget scheduled for tomorrow to see if that further relief is announced. If not, you can be sure his efforts will continue. If Ottawa thinks he’ll fall silent on the topic, they don’t understand the powerful force they’re up against.