- Reaction score
- 5,751
- Points
- 1,260
Some members will recall that there was a bit of discussion, a few months back, when Gen (Ret’d) Rick Hillier joined TD.
Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s Globe and mail is an interesting article about his colleagues, the rest of the TD team:
It is important that we understand that the policy process is not neat and tidy. Policy is not made by a small coterie of bureaucrats and politicians. There are some obvious (influential) outside “players” like The Conference Board of Canada but the relative influence of some of them, like, say, The Fraser Institute and/or The Canadian Labour Council will wax and wane with he ideological proclivities of the government of the day. There are, usually, a handful of highly regarded academics (not all of them Canadians, by any means) who are also consulted on a regular basis – like some of the think tanks the relative influence of these individuals varies with the political philosophy of the government of the day. It is also important to understand that even an NDP government will consult with e.g. The CD Howe Institute and the Fraser Institute and not just The Canadian Centre for Policy Alternatives; the civil servants and political professionals know that there are limits to how much ideology can be allowed into a budget or programme. Amongst the most everlastingly influential sources of advice for governments – national and provincial – are the big Canadian chartered banks.
Ever since the fallout from the Glorious Revolution (1688) the “business” of banking and of public policy have been inextricably linked. Indeed, good banking – public and private – allowed first Holland and later Britain to dominate Europe and the world. Banks matter; they know they mater; senior civil servants and politicians know they matter. Most Canadians hate banks. Most Canadians know little to nothing about how their country is governed.
What does it matter to the military?
I think most Canadian bankers are, very broadly, classical liberals: they believe in individualism – individual rights, responsibilities, opportunities and equality – and limited government. They understand that there is a requirement for the “defence of the realm” and for a military to be used as a tool for foreign policy (what do we do about, with, to and for the rest of the world in pursuit of our own vital interests?) but they want the smallest, most economical and efficient military establishment possible.
That means that the advice they give to governments most probably involves “holding the line” on defence spending (and on foreign aid, too) unless, as is rarely the case, there is some overwhelming political requirement – of regional industrial “expansion” for example – to spend most than “just barely enough.” It is well know, I hope, that Canadian ministers of finance consult widely – much, much more widely and publicly than was the case 25 years ago – during the budget preparation process. There are few “pro-military” voices in this country and, as far as I know, very few of them take part in that consultative process. It is rare, therefore, that a minister of finance hears arguments for a an effective and efficient military force supporting a coherent national policy that is tied to a coherent national vision.
It is my belief that there is no coherent national vision in 2009 – neither in the government of the day nor in the opposition parties. (But: perhaps the BQ has one – for the dismantling of Canada.) I think Paul Martin was on the right track in the 2005 White Paper but I doubt he could have followed through – even had he managed to win the election. The country – represented by its political parties, major national institutions and the commentariat – cannot agree on even the most basic parameters of foreign and domestic policies. Paul Martin’s foreign policy vision was, categorically, rejected by the Trudeau-Chrétien-Dion wing of the Liberal Party of Canada because it was too close to te (perceived) Conservative view. It was also rejected by the Conservatives – even though it parroted much of their recent platform – because it was written by Liberals.
What the Good Grey Globe’s report tells us is that the “voices of influence” in Canada are, as they have always been, quiet, reserved, unknown to most Canadians, powerful and focused on matters other than an effective, efficient, useful Canadian military.
Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s Globe and mail is an interesting article about his colleagues, the rest of the TD team:
TD's power of persuasion
SINCLAIR STEWART AND TARA PERKINS
Globe and Mail Update
May 13, 2009 at 7:40 PM EDT
NEW YORK, TORONTO — One evening last December, Ontario Premier Dalton McGuinty strolled into Grano, a popular Italian restaurant in midtown Toronto, clutching a document that would provide the blueprint for his upcoming provincial budget.
He handed copies to two of his dinner companions: Mike Lazaridis, co-founder of BlackBerry maker Research In Motion; and Carol Stephenson, dean of the Richard Ivey School of Business at the University of Western Ontario.
The third guest, Toronto-Dominion Bank chief economist Don Drummond, didn't need to see the report. He wrote it.
Mr. Drummond's policy paper, “Time for a vision of Ontario's economy,” may have been dryly titled, but it was blunt: Ontario's days as an economic powerhouse were over. It called for bold action from the government, including spending on transit and environmental measures and – most crucially – the harmonization of the provincial sales tax with the federal GST.
A few months later, after those very recommendations were enshrined in an ambitious budget, TD sent an e-mail to select media quoting chief executive officer Ed Clark.
“The Ontario government has listened and acted on what needs to be done to create jobs and growth in the Ontario economy,” Mr. Clark said.
What he didn't say, at least not explicitly, was that Queen's Park had accepted TD's advice.
This kind of political canniness has come to characterize the ascendance of the bank, under Mr. Clark, as a lobbying juggernaut.
The Ontario budget was just the latest lobbying victory for TD – and perhaps more remarkably, the latest victory in which there appears to be no obvious prize for the bank. At least not in the immediate term.
From taxation rules in British Columbia to sales tax harmonization in Ontario to monetary policy in Ottawa, TD has become what many see as Corporate Canada's most influential player on public policy – and its most resonant voice amid the financial crisis.
Indeed, on some days, the bank can be mistaken for a shadow finance ministry.
“People used to say, ‘What's good for GM is good for America,'” concedes Scott Mullin, TD's vice-president of government and community relations. “I guess we turn that on its head and say, ‘What's good for Canada is good for TD.' So, if we're convinced that something like tax harmonization is good for Ontario, then we see that as having a positive impact ... for us.”
The clout is baked into the bank's corporate DNA, most notably in the formidable triumvirate of Mr. Clark, Mr. Drummond and Frank McKenna, three senior executives who were shaped by years of high-level government service. They remain among the most politically connected operators in Corporate Canada – particularly with the Liberal Party.
And their signature can be found on public policy files across the country.
When Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney suggested in December that the big banks weren't lending enough to consumers, it was Mr. Drummond who quickly crafted a rebuttal and sent the presentation to other banks for their feedback. Mr. Clark took the document to a meeting with Mr. Flaherty, Mr. Carney and the other bank CEOs in early January.
TD was also among the first to lobby the government to expand its CMHC mortgage purchase program, to provide banks with more flexibility to lend to consumers – an effort that was unveiled last October and has been twice expanded since then (although other banks insist they were equally involved).
At the end of April, on the eve of the Liberal Party convention in Vancouver, TD released an in-depth study on employment insurance, calling for an overhaul of the program. Two days later, Liberal Leader Michael Ignatieff (who has sought counsel from Mr. Drummond and Mr. McKenna on his economic stimulus plan) pitched a very similar proposal to the country.
And sources say Mr. McKenna, in particular, was instrumental in helping to persuade British Columbia to replace its financial institutions capital tax with a minimum tax in its budget last year.
To understand TD's pursuit of policy influence, one has to understand the career trajectory of these three men, and their transition from the public sphere to the private.
Mr. Clark, who has a PhD in economics from Harvard, was once an ideologically driven bureaucrat who helped craft the national energy program in the Trudeau years, and was vilified in the oil patch as Red Ed. In 1985, one of Brian Mulroney's first surgical moves as prime minister – to great applause in the business community – was to have Mr. Clark fired. The career bureaucrat responded by embracing the business community, and embarking on a career as an investment banker at Merrill Lynch.
Yet his policy roots haven't withered. After taking the helm of TD in 2002, and spending a couple of years fixing some of the bank's lingering issues, Mr. Clark has since carved out a singular niche among bank CEOs, proffering advice to governments not merely on mundane financial issues such as credit card fees, but on issues ranging from social housing to equalization. The more powerful TD became – as Canada's second-largest bank, and one of the largest by market value in North America, it has clout – the more powerful became Mr. Clark's ideas.
Within the bank, he has attempted to engrain the importance of participating in the political process. Three years ago, just before the federal election, he held a meeting with top senior executives to discuss making donations to both the Liberals and the Conservatives. The 10 officials agreed to contribute a combined $93,000, split equally between the parties. The move raised eyebrows, not least because only two of these people had made contributions before the meeting. But Mr. Clark insisted at the time it was important for individuals to pick up the financing slack after new rules barred companies from making direct contributions.
He declined to be interviewed for this story, but in an e-mailed statement he attempted to play down his bank's lobbying as unexceptional.
“I know my peers at the other Canadian banks do the same and I believe TD does not have any extra or special influence in this regard,” Mr. Clark wrote. “Frankly, I would be surprised if responsible businesses large and small were not reaching out to offer ideas on Canada's future success.”
Even if they are, they would have a hard time matching TD's influence, much less its connections.
Consider Mr. Drummond, a career bureaucrat in the Finance Department who some thought should have been named to the deputy minister's job, but never was. Frustrated by career limitations in Ottawa, Mr. Drummond jumped to TD in 2000, as chief economist and, in the only job pairing of its kind in Canada, head of government relations.
Less visible, but no less influential, is Mr. McKenna, the former Liberal premier of New Brunswick, who was recruited by Mr. Clark in 2006 to help win accounts for TD's investment bank. Perhaps the most skilled political networker in the country since Mr. Mulroney was at his peak, Mr. McKenna was the sort of door-opener TD needed to win top assignments during the financial boom years. He also has been put to work winning government allies during the bust.
He consulted with Ontario Finance Minister Dwight Duncan on the tax-harmonization file, sharing his first-hand experience with blending the taxes in New Brunswick in 1997.
“His advice was to do it,” Mr. Duncan recently told a Globe and Mail editorial board meeting. “His advice was that there would be political backlash to it but if you manage it properly ... you will be able to withstand the political backlash.”
Since the financial crisis began, TD's top officials have held roughly four times as many meetings with federal officials as those at RBC, the country's largest bank, according to the federal lobbyist registry.
Mr. Clark is very hands-on, and will request the name of individual bureaucrats who are writing memos to ministers so he can speak to them personally. While he and Mr. Drummond are intimately familiar with how the bureaucracy works, Mr. McKenna brought an added dimension: knowing how a first minister thinks.
TD does not have a Bay Street monopoly on national issues. Ontario's Premier has a close relationship with Gordon Nixon, CEO of Royal Bank of Canada, who formerly chaired the Toronto Region Research Alliance and has been an active promoter of technology and environmental programs in the province. And Ontario routinely consults with other top bank economists, such as Bank of Nova Scotia's Warren Jestin.
Ontario Liberal MP John McCallum, a former RBC chief economist, cautions against attributing too much clout to any single company. But he acknowledges that, among the banks, TD is now the most prominent lobbyist – and likely the most skilled, especially in the persons of Mr. Clark and Mr. Drummond.
“Between the two of them, they have huge knowledge of how the public sector works, and which are the most effective buttons to push. ... They're masters at that.”
It is important that we understand that the policy process is not neat and tidy. Policy is not made by a small coterie of bureaucrats and politicians. There are some obvious (influential) outside “players” like The Conference Board of Canada but the relative influence of some of them, like, say, The Fraser Institute and/or The Canadian Labour Council will wax and wane with he ideological proclivities of the government of the day. There are, usually, a handful of highly regarded academics (not all of them Canadians, by any means) who are also consulted on a regular basis – like some of the think tanks the relative influence of these individuals varies with the political philosophy of the government of the day. It is also important to understand that even an NDP government will consult with e.g. The CD Howe Institute and the Fraser Institute and not just The Canadian Centre for Policy Alternatives; the civil servants and political professionals know that there are limits to how much ideology can be allowed into a budget or programme. Amongst the most everlastingly influential sources of advice for governments – national and provincial – are the big Canadian chartered banks.
Ever since the fallout from the Glorious Revolution (1688) the “business” of banking and of public policy have been inextricably linked. Indeed, good banking – public and private – allowed first Holland and later Britain to dominate Europe and the world. Banks matter; they know they mater; senior civil servants and politicians know they matter. Most Canadians hate banks. Most Canadians know little to nothing about how their country is governed.
What does it matter to the military?
I think most Canadian bankers are, very broadly, classical liberals: they believe in individualism – individual rights, responsibilities, opportunities and equality – and limited government. They understand that there is a requirement for the “defence of the realm” and for a military to be used as a tool for foreign policy (what do we do about, with, to and for the rest of the world in pursuit of our own vital interests?) but they want the smallest, most economical and efficient military establishment possible.
That means that the advice they give to governments most probably involves “holding the line” on defence spending (and on foreign aid, too) unless, as is rarely the case, there is some overwhelming political requirement – of regional industrial “expansion” for example – to spend most than “just barely enough.” It is well know, I hope, that Canadian ministers of finance consult widely – much, much more widely and publicly than was the case 25 years ago – during the budget preparation process. There are few “pro-military” voices in this country and, as far as I know, very few of them take part in that consultative process. It is rare, therefore, that a minister of finance hears arguments for a an effective and efficient military force supporting a coherent national policy that is tied to a coherent national vision.
It is my belief that there is no coherent national vision in 2009 – neither in the government of the day nor in the opposition parties. (But: perhaps the BQ has one – for the dismantling of Canada.) I think Paul Martin was on the right track in the 2005 White Paper but I doubt he could have followed through – even had he managed to win the election. The country – represented by its political parties, major national institutions and the commentariat – cannot agree on even the most basic parameters of foreign and domestic policies. Paul Martin’s foreign policy vision was, categorically, rejected by the Trudeau-Chrétien-Dion wing of the Liberal Party of Canada because it was too close to te (perceived) Conservative view. It was also rejected by the Conservatives – even though it parroted much of their recent platform – because it was written by Liberals.
What the Good Grey Globe’s report tells us is that the “voices of influence” in Canada are, as they have always been, quiet, reserved, unknown to most Canadians, powerful and focused on matters other than an effective, efficient, useful Canadian military.