Canadian business giant Desmarais dead at 86

Video: One of Canada’s richest men, Paul Desmarais, died Wednesday at the age of 86. Global National’s Mike Armstrong looks back at his life.

MONTREAL – Paul Desmarais, one of Canada’s most influential business tycoons and a strong federalist, has died at the age of 86.

His family said he died “peacefully” Tuesday evening at his country estate northeast of Quebec City surrounded by his family, including his wife and four children.

Born in the Northern Ontario mining town of Sudbury in 1927, Desmarais was one of Canada’s most powerful figures, straddling the worlds of business and politics.

Not only did he build Power Corp. into one of the country’s largest conglomerates, Desmarais was also a staunch defender of national unity.

Desmarais’ successful business journey began modestly in 1951 with the revival of the family’s ailing bus company.

A series of smart moves resulted in the creation of a holding company that in 1968 made a share-exchange offer with Power Corp.

With his company’s diversified holdings in insurance, transportation, paper, media, and financial services, Desmarais was one of the most notable members of his province’s business elite, often referred to as Quebec Inc.

During his final annual meeting as chief executive in 1996, Desmarais explained his federalist views.

“My profound attachment to Canada stems from the great liberty and freedom that my ancestors were able to enjoy in building their lives in a new country, the same liberty and freedom which allowed me as a young French Canadian from Northern Ontario to realize his dream in building a business in all parts of Canada and abroad.”

In a 2008 interview with French magazine Le Point, Desmarais described his identity.

“I was born a Franco-Ontarian. I chose to live in Quebec. I am Canadian. Canada is my country. Quebec is my province.”

Desmarais’ strong political views led critics to accuse him of persuading his friend, Nicolas Sarkozy, to adopt a pro-Canada foreign policy, when the French president professed his love for Canada during a recent visit to Quebec.

After Sarkozy was elected president in 2007, he awarded Desmarais the Grand Cross of the Legion of Honour, France’s highest order of merit that was established by Napoleon in 1802. Other recipients include Lech Walesa and Alexander of Russia.

“If I am the president of France today, it is thanks in part to the advice, the friendship and the loyalty of Paul Desmarais,” Sarkozy said during the 2008 ceremony.

One of the Sarkozy’s moves was to relaunch the stalled merger between the state-owned gas company and the electric and gas utility Suez SA that is partially owned by Power Financial and partner Albert Frere’s holding company.

Desmarais has been called the most powerful businessman in Canada, gaining the ear of Pierre Trudeau, Paul Martin, Brian Mulroney and Jean Chretien, whose daughter is married to Desmarais’ son, Andre.

“I respect greatly men of strong personalities. If I had to name some, I’d say Winston Churchill, Charles de Gaulle, Franklin Roosevelt, Mao Tse-Tung,” he told L’actualite magazine in 1974.

Although he had close ties with federal Liberals, he also held admiration for Conservatives.

“Mulroney really impressed me. He signed the Free Trade Accord with the United States and Mexico,” he told Le Point.

Desmarais had a special bond with Paul Martin Jr., who some say viewed Desmarais almost as a father figure and mentor.

The bond between the two Franco-Ontarians was enhanced when Martin purchased Canada Steamship Lines from Power.

Desmarais had the golden touch. He knew when to sell assets.

Asked about the key to his business success, Desmarais simply responded: “I don’t now. I seized opportunities that presented themselves.”

For example, concerns about the future of the pulp and paper industry prompted Power to sell Consolidated-Bathurst for $1.5 billion and netted more than $1 billion in the process.

Power Financial sold its shares of Montreal Trust to Bell Canada parent BCE Inc. for $547 million in 1989 because of reservations about the ability of a mid-sized company to compete with Canada’s large chartered banks.

He shed assets outside the financial sector and created a separate publicly traded company Power Financial Corp. that controls Investors Group and Great-West Lifeco Inc., which owns London Life and Canada Life.

Through Gesca Ltee, Desmarais controls several daily newspapers, including La Presse, Montreal’s prestigious broadsheet, and Quebec City’s Le Soleil.

He helped to open the door to Canadian businesses in China by leading a commercial delegation there in 1978. However, it took eight years before Power Corp. launched a business venture there. It now invests in infrastructure projects in China through its stake in CITIC Pacific Ltd.

By the time he handed daily operations of the company to his sons in 1996, Desmarais had seen Power’s assets increase to $2.7 billion, from $165 million. Net earnings increased to $209 million from $3 million, and the market value of the company’s shares increased from $61 million to $2.6 billion, for a compounded annual return of 16.4 per cent.

Canadian Business magazine ranked Desmarais as the wealthiest Quebecer and Canada’s seventh wealthiest person, with a fortune estimated at $4.4 billion.

An art lover, Desmarais has one of Canada’s largest private art collections. Two wings of Montreal’s Fine Arts Museum are named in honour of his family.

Desmarais also used his fortune to build one of the world’s most exclusive golf courses on his sprawling 75-square-kilometre Sagard estate in the mountainous Charlevoix region of Quebec.

A housewarming party in 2003 attracted political heavyweights, including Mulroney, former Quebec premier Lucien Bouchard, along with ex-U.S. presidents George H. W. Bush and Bill Clinton.

Desmarais suffered what company officials described as a “minor stroke” in 2005.

He is survived by his wife Jacqueline Maranger, sons Paul Desmarais Jr. and Andre, daughters Sophie and Louise, as well as 10 grandchildren.

A private family funeral is planned, followed by a memorial service to be announced by the Desmarais family.

Power Corp., through its Square Victoria Communications Group subsidiary, and together with the corporate parent companies of the Toronto Star and Globe and Mail newspapers owns The Canadian Press.