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Breaking News from The Globe and MailGomery testimony appalls businessBy GORDON PITTS, RICHARD BLOOM and SINCLAIR STEWART
Thursday, April 07, 2005
From Friday's Globe and Mail
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Canada's business leaders see the Gomery inquiry's explosive testimony as a serious blot on the country's international image and a potential source of damaging political instability.
“It besmirches Canada's national reputation,” said John Risley, chairman of Halifax-based Clearwater Seafoods LP, a major fish harvester and processor with large international sales.
“It's disappointing. I think it sets a terrible example,” said the head of one of the country's major banks, referring to revelations that what was presented as a project to fight Quebec separatism turned into a massive scandal of secret payments.
The chief executive officer of another Big Five bank said one of his main worries is the potential fallout in Quebec, where a strengthened Bloc Québécois could rekindle the separatist issue.
“You sit there and you say: ‘My God, we're right back into the soup,'” he said.
The comments came after Mr. Justice John Gomery partly lifted the publication ban on explosive testimony to his inquiry into the federal sponsorship scandal — details that are expected to have a devastating impact on Ottawa's governing Liberal Party.
During the inquiry, former Montreal ad executive Jean Brault gave blow-by-blow details about cash exchanges, perks, fake invoices and various other practices that had been going on for years between his company, Groupaction Marketing Inc., and Liberal organizers.
Before Thursday, that testimony had been under a publication ban so that it wouldn't prejudice criminal proceedings against him.
The Gomery inquiry has been examining how Ottawa's $250-million nationwide sponsorship program has been handled.
One of the biggest worries in Canada's boardrooms is that the devastating testimony would plunge the minority Liberal government into a quick election, creating financial costs, delays on policy decisions and a revival of the separatist threat in Quebec.
The big concern on Bay Street, one bank president said, is the lack of appealing leadership candidates within the Liberals or the other three parties. “I think what worries most business leaders is [they] query where the leadership is.
“If you'd spent half this money on supporting the Canadian Olympic team until 2010, you'd probably bring the country together more than spending it the way it has been,” he pointed out.
His counterpart at another major bank put the onus on Paul Martin, arguing that, in the face of a resurgent Bloc, the Prime Minister's instinct will be to spend more money to keep Quebec onside. “Wherever you are on that issue, it's just not a good way to run a country. It's a weak link in Canada.”
But Stephen Jarislowsky, chairman of Montreal-based investment manager Jarislowsky Fraser Ltd., said he would welcome an election now to clear the political air, and to present an alternative to the Liberals who have governed for too long in Canada.
Charlie Fischer, CEO of Nexen Inc., a Calgary oil company, warned of the danger that all business people, or at least all of the Quebec business community, will be tarred by the scandal, when it was clear that the scandal was the result of individual decisions.
But he had harsh words for Canada's political leadership, including Mr. Martin. When someone does something wrong in his company, he said, the CEO takes responsibility. But in Ottawa, “nobody is prepared to stand up and say ‘I'm responsible.'”
Mr. Risley of Clearwater Seafoods echoed the widespread concern about the Bloc's added leverage, arguing that the likely outcome of an election would be long-term deadlock in Ottawa.
In fact, the major issue of disagreement among business leaders is not the gravity of the scandal, but how long the impact will last.
William Holland, president and CEO of CI Fund Management Inc., said the revelations will have a negative short-term impact on the dollar and Canadian markets, but feels that Canada in the long term will maintain its reputation as “an ethical place to do business.”
But Tony Chapman, CEO of Toronto-based promotional marketing firm Capital C, said the news is a blow to Canada and its aspirations as a leading international player. “When you look at it from the outside in, it's politicians can be bought and politics can be bought and democracy can be bought. It's devastating news for our culture that way. It just puts a terrible taste in your mouth.”
A senior executive in Canada's oil patch echoed those concerns, calling the testimony “a black mark on this country.” More critical, he said, was the ability of the political crisis to delay overdue policy moves, such as pending decisions on northern pipelines and the agenda for Kyoto mandates.
But John Bragg, the president of Oxford Frozen Foods Ltd., a Nova Scotia food processor, said Mr. Martin could still rise above the issue by arguing that, after all, he appointed Judge Gomery as his commissioner.
He also echoed the view of some observers that this would not be seen as a Canadian national scandal but as a fallout from Quebec's distinct political scene.
One of the senior bankers acknowledged that the allegations are troubling, but suggested it would be a mistake to think that advertising relationships with the federal government have not been plagued by similar problems in the past.
“It is another nail in the coffin, but we've had a series of these nails and we shouldn't overdramatize that this is out of keeping with what went on in lots of forms before. You clearly have evolving standards of what's appropriate behaviour.”
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BREAKING NEWS Thursday, April 07 at 11:33 PM
Gomery testimony appalls business‘It besmirches' Canada's reputation
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