Canada’s wealthy families – a dying breed

Nothing has altered the power structure of Canadian business more profoundly than the near disappearance of family run and owned enterprises that once dominated the commercial sector.

It may not have been as efficient an arrangement as the contemporary conglomerates but the Great Family Dynasties provided the fountainheads of the nation’s productivity. While profit was their motive, much harshness was leavened because they took local conditions into account, and operated with a distinct bias toward community priorities. This country was builton the evolution of family firms into national institutions. At their best, these local firms became a form of family trusts. At their worst, the families provided a handy path to succession through self-perpetuation, which often proved to be their downfall.

It is inevitably the Eaton’s brand that comes up whenever vanished family empires are mentioned, but it was only the most prominent of the onetime contenders who moved out of contention. Lousy decisions (such as shutting down the profitable catalogue division) were mostly to blame, but so was the fact that John David Eaton failed to choose a leader among his four sons. With authority split between warring siblings, no one was in charge of the shop, and it floundered into bankruptcy.

Many of Canada’s other bedrock brands also vanished or slipped from family control, endangering the existence of the entire sector. They include Gersteins’ Peoples Credit Jewellers; the Hermants’ Imperial Optical; the Creed family’s fur salons; the Kofflers, who turned corner drug stores into shopping plazas; the Burtons, whose Simpson department stores once rivalled Eaton’s; and the Steinberg supermarket empire that expired through inter-family quarrels. And the list goes on: the Crosbies, Romans, Blackburns, Bronfmans, Bassetts, and Quebec’s once dominant Roland family—all gone as significant family clusters.

But the shift away from the once all-powerful family enterprise was most dramatically illustrated in Diane Francis’s 1986 bestseller Controlling Interest. She determined that 32 Canadian families, along with five privately owned conglomerates, held sway over one third of the country’s corporate assets. At the time, their combined annual income was $43 billion larger than the revenue of the federal government.

Those days are gone forever. Families do not lend themselves to reporting charts or the compulsory isolations between corporate and private spending. With a few dwindling exceptions, their glory days are behind them. Their next generation will take orders from hired hands—replaceable professionals who obey bottom lines instead of family loyalties.

Peter C. Newman’s latest book is called When the God’s Changed: Death of Canadian Liberalism (Random House Canada, 2011).

This article was originally published on capitalmagazine.ca.