by Elaine Dewar
See: “Chapters Struggles to Survive” by Jane O’Hara, Maclean’s, August 14, 2000, as reproduced in the Canadian Encyclopedia at: www.thecanadianencylopedia.ca/en/arictle/chatpers-struggles-to-survive.
See: MP Mauril Belanger’s interrogation of Competition Bureau staff who appeared before the Standing Committee on Canadian Heritage, Evidence: March 30, 2000.
See: “The Challenge of Change: A Consideration of the Canadian Book Industry,” Clifford Lincoln MP Chair, Standing Committee on Canadian Heritage, June 2000.
See: U of T Bulletin story by Jane Stirling, June 26, 2000.
See: Minutes of U of T Governing Council June 29, 2000. See also minutes of Governing Council, August 22, 2007 re: office of the Governing Council Memorandum on the Authority. Under: Memo to Members of Committee on Academic Policy and Programs, Item 4.
See: Brian Bethune, “Giving Away the Store,” Maclean’s, July 10, 2000.
Email of Erin Lemon, Executive director, News & Media, the University of Toronto, to author.
Those in attendance at the June 29, 2000, meeting included: Wendy M. Cecil-Cockwell (chair), Mary Ann V. Chambers, the Honourable Henry N.R. Jackman, Chancellor, Professor J. Robert S. Prichard, President, Professor Mary Beattie, Dr. Robert Bennett, Brian C. Burchell, Professor Jack Carr, Professor John R.G. Challis, Professor W. Raymond Cummins, Dr. Shari Graham Fell, Professor Vivek Goel, Dr. Anne Golden, Dr. Robert J. Kyle, Mr. Gerald A. Lokash, Professor John. T. Mayhall, Professor Ian R. McDonald, Ahmed Rafi Mian, Professor Heather Munroe-Blum, Dr. John P. Nestor, Elan Ohayon, Rose M. Patten, the Honourable David R. Peterson, Kashif S. Pirzada, The Honourable Robert K. Rae, Professor Wendy Rolph, Dr. Joseph L. Rotman, Susan M. Scace, Professor Adel S. Sedra, Professor Kenneth Sevcik, Amir Shalaby, Robert G. Spencer, Terrence L. Stephen, Wendy Talfourd-Jones, John H. Tory, Professor Ronald D. Venter, Nancy L. Watson, Dr. Alexander R. Waugh, Judith Wilson, Vilko Zbogar, Louis R. Charpentier, (Neil Dobbs, Margaret McKone). Those absent included: The Honourable William G. Davis, Shruti Dev-Vayyar, Wanda M. Dorosz, Ljupco Gjorgjinski, Paul V. Godfrey, Peter A. Herrndorf, Brian Langille, Jacquiline C. Orange, Professor Emmet I. Robbins, and staff, including: Professor David Cook, Vice-Provost, Dr. Jon S. Dellandrea, Vice-President and Chief Development Officer, Professor Michael G. Finlayson, Vice-President, Administration and Human Resources, Professor Derek McCammond, Vice Provost, planning and Budget, Professor Ian Orchard Vice-Provost, Students, Professor Caroly Tuohy, Deputy Provost, Robert G. White, Chief Financial Officer, Professor Carl Armhein, Dean, Faculty of Arts and Science, Susan Bloch-Nevitte, Director, Public Affairs, W.G. Tad Brown, Finance and Development Counsel, Professor Ian Clark, President, Council of Ontario Universities, Matthew Cockburn, Torys, Brian Davis, Torys, Mr. Martin England, Assistant Vice-Provost, Planning and Budget, Dr. Beata FitzPatrick, Assistant Provost, Rivi Frankle, Director of Alumni and Development, Manon LePaven, President, Association of Part-time Undergraduate Students, Professor Judith Globerman, Status of Women Officer, Cathy McCauley, Executive Assistant to the President, Director of Special Events and Associate Campaign Director, Dr. Peter Munsche, Assistant Vice-president, Technology Transfer, Christine Oke, Assistant Vice-Provost, Professional Factulties, Janice Oliver, Assistant Vice-President, Operations and Services, Kasi Rao, Director of the Office of the President and Director of Government Relations, Maureen Somerville, Chair, College of Electors, Jorge Sousa, President, Graduate Students’ Union.
See: “McClelland & Stewart Owner Donates Canadian Publishing House to University of Toronto,” University of Toronto News and McClelland & Stewart, press release, June 26, 2000.
Ibid, Bethune, July 10, 2000.
See: Schedule attached to Unanimous Shareholder Agreement between McClelland & Stewart, the University of Toronto, Random House of Canada, First Plaza Inc., July 1, 2000.
See: David Foot website.
Ibid, MacSkimming, p. 374.
See: “Avie Bennett’s Master Stroke” by Scott Anderson, Quill & Quire, August 2000, and see also:“Giving Away the Store: Avie Bennett’s unprecedented donation of industry icon McClelland & Stewart brings praise—and a storm of criticism” by Brian Bethune, Maclean’s , July 10, 2000.
Ibid. Brian Bethune.
Ibid. Brian Bethune.
See: U of T Bulletin, Jane Stirling, June 26, 2000.
See: Canada Council site eligibility requirements for literary publishers at https://apply.canadacouncil.ca/AreYouEligible.aspx and see also: Canada.pch.gc.ca/eng, Canada Book Fund Support for Publishers. Date last modified, 2016–04–21.
Ibid, Bethune.
Ibid, Bethune.
Ibid, Bethune.
Ibid, Bethune.
Ibid, Bethune.
Ibid, MacSkimming, p. 374.
Ibid, Bethune.
See: “Black out: Canwest to buy 100% of National Post,” CBC News/Business, August 24, 2001, cbc.ca.
See: “The Good, the Bad and Ugly: Financial Markets and the Demise of Canada’s Southam Newspapers,” by Marc Edge, Nanyang Technological University of Singapore; and also: “Does Ownership Matter? The Effects of Ownership on the Coverage of Political Scandal in Hollinger and Canwest Newspapers,” by Lydia Miljan and Christina Howoran, paper for Canadian Political Science Association Meeting, Halifax, June 1, 2003, and see also “The Rise and Fall of Conrad Black, a Timeline,” by David Olive, Toronto Star, March 11, 2007. Black sold the remaining 50% of the National Post to Canwest in August, 2001.
The allegation was that the Prime Minister had improperly used his position to influence a federal development bank regarding a property in his riding in which he once owned an interest.
See: “Monopsony and Predatory Buying: The Canadian Landscape Is Wide Open,” by John F. Clifford and Sorcha O’Carroll, Competition Law Group, McMillan LLP.
See: “In the Matter of the Securities Act R.S.O. 1990, c.S.5, as amended, and In the Matter of Chapters Inc. and Trilogy Retail Enterprises LP, Reason for Decision” Howard Wetson, the Ontario Securities Commission, February 9, 2001.
See: Titans: How the New Canadian Establishment Seized Power, by Peter C. Newman, Penguin Books Canada Limited, 1998, pp. 235–237.
Indigo proxy circular of 2004, states Wright is an officer of controlling shareholder of Indigo, Trilogy.
“The Heather and Gerry Show,” by Marci McDonald, Toronto Life, June 2005.
Ibid, Titans, Peter C. Newman, pp. 236–237 and also Fireworks: The Investment of a Lifetime, by Andy Sarlos, pp. 142–148.
Pencer started in business running vending machines, then got into catering in Montreal. His friend, William Obront, was a butcher. The Cliche Commission, (Brian Mulroney was one of the Commissioners) inquiring into organized crime in Quebec, heard testimony that Obront had supplied Expo 67 events with tainted meat. Apparently, Obront met his mob friends in one of Pencer’s establishments, and Pencer bought Obront’s meat business out of bankruptcy. In the late 1970s, Pencer moved West, got involved with meat packer Burns Foods, which later sued him and won $600,000 as a settlement. Pencer bought real estate and car dealerships in Alberta, and in 1981 bought the ailing Financial Trust in Toronto. As Peter Newman recounts in Titans, Pencer issued to himself about $100 million worth of what became Financial Trustco’s worthless paper before the company was sold.
Ibid, Marci McDonald, Toronto Life, and Peter C. Newman, Titans, p.236–237.
Ibid, Andy Sarlos, p. 151.
See: “Publishers worry that Ottawa will allow more access to foreign firms” Kate Taylor, Globe and Mail, Dec. 31, 2000.
Ibid. Newman, Titans, p. 235.
Ibid. Newman, Titans, pp. 218–233.
Onex, Switzerland is a town just outside Geneva where numerous numbered companies are registered for the purpose of parking assets far from nosy tax officials. I called Onex to find out if the company was named after the town. There ar
e no PR people working at Onex, so I was passed on to a woman who undertook to find out. I said I wondered if it had been named for Onex as Schwartz had spent an interesting summer there many years ago. No, said the woman, after checking, the company was not named for Onex, Switzerland, it was just a name that the founder, Gerry Schwartz, happened to like.
If ever you want to read a truly fascinating description of the business aims of the leveraged buyout operators of the 1980s, read Onex’s private placement offering of 1986. You’ll have to go to a business library with a microfiche reader to find it, but it’s worth the trip. Schwartz, who signed the offering, states that Onex hoped for annualized returns of 36%. A good return from a manufacturing company then was about 15%. The document invites new investors to consider directly purchasing shares of companies Onex is interested in acquiring—in other words, to act in concert with Onex as it works to buy control of companies. The document explains that Mr. Schwartz and his managers would be paid fees for their services and Onex managers would be loaned money, interest free, to buy and hold 20% of Onex shares, loans repayable in 20 years. The document also declares that Schwartz, or the Schwartz family group, would have to be bought out at a great premium if ever the Onex board decided to part ways with Schwartz, or if he died or became incapacitated. Why? Onex’s success would hinge on Schwartz’s training and his seven years working on Wall Street. The document explains that he had many personal contacts with the then leading players among Wall Street investment banks, especially: Lazard Frères; Drexel Burnham Lambert; Lehman Brothers; Bear Stearns. Such contacts, said the offering, would be absolutely essential for a successful business. Why? In order to gain control of a company with the minimum outlay of Onex’s capital, Onex would arrange loans from these institutions guaranteed not by Onex (no recourse to Onex, is how the document puts it), but by target companies’ shares and target companies’ cash flows. The document suggests that Onex’s management had found very innovative ways to avoid tax, and a means to trade Onex units privately, though a public offering at some point was contemplated. In fact, Onex went public a little over a year later, just before Black Monday of November 1987 when stock markets crashed everywhere. The share price dived, but according to Andy Sarlos in Fireworks, Schwartz did extremely well anyway.
See: Onex website.
See: Onex management information circular of 2015.
See: Onex website and its paragraph on alignment.
See: “Canada’s Top 100 Highest-Paid CEOs” by Graham Scott, Canadian Business, Jan.20, 2015 at http://www.canadianbusiness.com.
See: http://www.onex.com
161 Bay Street 49th floor for both See Trilogy Retail LP and Onex, Indigo Management Information Circular of February 2016.
According to the Indigo Management Information Circular of February 2016, Heather Reisman owned 98,000 shares, Gerry Schwartz owned or controlled 15 million plus.
See: testimony of Larry Stevenson to Standing Committee on Canadian Heritage, April 13, 2000.
Ibid, Ontario Securities Commission, February, 2001.
See: “Government Approves Chapters-Indigo Merger,” by Leah Eichler, Publishers Weekly, June 18, 2001.
See: “Monopsony and Predatory Buying: The Canadian Landscape Is Wide Open,” by John F. Clifford and Sorch O’Carroll McMillan LLP.
See: Federal Court of Canada website, Mr. Justice Marc Nadon’s official bio, at www.fca.caf.gc.ca.
Ibid, Peter C. Newman, Titans, pp.231–232.
See: Indigo Books & Music Annual Information Form, July 29, 2003.
See: “The Heather and Gerry Show,” Marci McDonald, Toronto Life, June 2005.
See: “Martin’s family’s theatre faces wrecking ball,” by Charlie Smith, the Georgia Strait, July 28, 2005. See also: Cloak of Green, by Elaine Dewar, p. 280.
See: Report of the Competition Commissioner, 2005.
See: Indigo Books & Music Management Information Circular of May 12, 2006.
“Here Is the First Book Ever Ordered on Amazon,” by Megan Garber,
www.theatlantic.om/technology/archive/2012.
See: Testimony of Heather Reisman before Standing Committee on Canadian Heritage, March 12 and March 13, 2001.
Ibid, Testimony of Heather Reisman
See: “Indigo Sells Kobo: A Q and A with Heather Reisman,” Canadian Business, November 9, 2011.
See: Press release of Trilogy titled “Retail Enterprises LP Agrees to Sell Two Million Indigo Shares” Jan. 29, 2010.
“Booksellers take on Ottawa over Amazon’s distribution plans,” Marina Strauss and Omar El Akkad, Globe and Mail March 8, 2010.
See: “Mr. Right,” by Michael Posner, The Walrus, September 12, 2012.
See: “Amazon given green light to set up shop in Canada,” by Omar El Akkad and Marina Strauss, Globe and Mail, April 12, 2010.
See: “Industry Canada Launches Review of Investment Policy in Book Publishing and Distribution,” which appeared in the law firm Fasken & Martineau’s Antitrust/Competition & Marketing Bulletin. As the first paragraph made clear, the title was in error. It was the Minister of Canadian Heritage who announced this review and carried it forward with a discussion paper produced by the Department along with requests for submissions. www.fasken.com/investing-in-the-future-of-Canadian-books. The discussion paper is called “Investing in the Future of Canadian Books: Review of the Revised Foreign Investment Policy in Book Publishing and Distribution.” Discussion Paper of July 10, 2010.
See: July 2, 2010 Aleksandra Sagan for Canadian Press. “Debt is in tiers.” See Thestar.com “Canwest newspapers to be called Postmedia Network, Paul Godfrey says,” and see Alexandra Sagan for Canadian Press. Debt is in tiers, first group is $685 million, $950 million to pay off bank creditors owed $925 million. Thestar.com July 7, 2010.
See: theStar.com. “The US hedge fund manager backing a major newspaper merger,” by Dana Flavelle, Business. October 24, 2010.
See: Evidence, Standing Committee on Access to Information, Privacy and Ethics, November 2, 2010.
See: Evidence, Standing Committee on Access to Information, Privacy and Ethics, Testimony of Nigel Wright, November 2, 2010.
Ibid, Evidence, November 2, 2010.
See: Indigo Books & Music Annual Information Form for the Year ended April 2, 2011.
See: “Reisman Sells Kobo” Canadian Business, November 9, 2011.
See: “Has the Canadian Government Turned the Page on Its Book Policy?” by Shawn C.D. Neylan, Michael Kilby, John Leopold, Michael Gelinas for Stikeman Elliott LLP, June 2014.
In the UK it is also about 30%, but starting to slip. See Guardian.com Feb 3, 2016 “Ebook sales falling for first time.”
See: David Hume, The Life of David Hume, Esq. Written by Himself, reproduced in Dialogues Concerning Natural Religion, David Hume, The Library of Liberal Arts, Thomas Nelson & Sons Ltd., 1947, p. 234.
Avie Bennett’s biography on the Historica Canada website, an organization whose Foundation he was chairman of from 2003 to 2011, confirms this claim: “With no Canadian company interested in taking it over, and prohibited by federal legislation from selling majority control to a foreign firm, Bennett structured an innovative deal that ensured the integrity of McClelland & Stewart while raising necessary funds for continued investment.”
See: “Bertelsmann’s Nazi Past,” by John S. Friedman and Hersch Fischler, The Nation, December 29, 1998.
See: “Hitler’s Revisionist,” by John S. Friedman and Hersch Fischler, The Nation, October 21, 1999.
While Friedlander’s group went to work, another Canadian connection with Bertelsmann emerged at the same time as Random House of Canada began to manage M&S. Groupe Bruxelles Lambert is partly owned by Power Corporation of Montreal. The Groupe bought 25% of Bertelsmann AG and Andre Desmarais joined the Bertelsmann board to watch over this interest. He stayed on that boa
rd until 2006 when Bertelsmann bought the stake back from Groupe Bruxelles Lambert.
BBC News World Edition, October 8, 2002. “Bertelsmann admits Nazi Past.” See also Telegraph.co.uk. October 10, 2002,
See: “German media giant admits it backed Hitler,” Hannah Cleaver, Telegraph, October 10, 2002.
As proof, my informant offered me a scan of a 2003 Canada Council document listing titles published by McClelland & Stewart in 2002, which had qualified for support under its Block Grants Book Publishing support program. Books are categorized as new, as reprints, as fiction (novels or short stories) or as non-fiction, and different levels of support were available according to those categories. The document clearly shows that Canada: A People’s History Volume Two was classified as a novel, when it is non-fiction. Mavis Gallant’s Paris Stories and Pegnitz Junction are characterized as new short story collections, not reprints, though they are both reprints, so they were funded at 100% not 50%. See document dated 2003/05/07. He also showed me his correspondence. The Council claimed that these must be inputting errors.
And he followed up that allegation with an email, later. The tax credit offered to publishers in Ontario is calculated at 30% of eligible expenditures by Canadian owned and controlled publishers producing and marketing works by Canadian authors. The publisher must file a tax return in Ontario. The tax credit caps out at $30,000 per book for qualifying applicants. Assuming M&S got the maximum credit for an average of about 40 books published per year, its Ontario tax credit would have been about $1.2 million a year in the years from 2007 until 2011. Ontario does not publish information about who gets this tax credit or how much, it only lists the total value of applications made and the total amount of certificates given each year under its program. The totals given amount to about $3 million a year, with about two thirds of applications earning certificates. See also: email from OMDC spokesperson, George McNeillie, to author, September 30, 2015.