Robert Tessier, the new chairman of the Caisse de dépôt et placement du Québec, was so excited when he saw Michael Sabia’s name on the short list – more like a Post-it note – of chief executive officer candidates for the pension fund manager that he didn’t even bother interviewing the only other person recommended by the headhunters that were hired to recruit the new boss.
For the sake of Mr. Tessier and Quebec Premier Jean Charest, let’s hope that the other name on the list was Bernard Madoff.
To so quickly and easily choose Mr. Sabia, every other candidate would have to have had a résumé as tarnished as that of the king of Ponzi schemes to lose out to the ex-BCE chief for the top job at Quebec’s politically charged pension fund manager.
We pity Pierre Karl Péladeau, whose Quebecor Media is 45 per cent owned by the Caisse. Mr. Péladeau suddenly finds himself in partnership with a bitter rival whose ex-employer, BCE, will be paying the 55-year-old Mr. Sabia an annual pension of at least $935,000.
Mr. Sabia’s qualities, regardless of what thousands of angry BCE shareholders think of them, are to be highly prized in Corporate Canada. What he lacks in vision and leadership, he makes up for in his proven ability to organize and execute.
Still, it is hard to imagine a poorer fit for the Caisse than the dispassionate former federal bureaucrat. The fund manager is not some flagless multinational, indifferent to the location or multiplier effect of its investments. The Caisse has a mission and its leader must passionately embody it.
Spare us the spiel about how the Caisse should only worry about getting the best returns for the pension and insurance funds whose $120-billion it is entrusted to manage. It was never created just for that, and Quebeckers – and they have the final say, after all – see no contradiction in a Caisse mandate that also makes plenty of room for economic nationalism.
Besides, former Caisse CEO Henri-Paul Rousseau’s headstrong pursuit of returns didn’t turn out so well. The Caisse distinguished itself as the dunce of the Class of 2008, losing much more than its Canadian peers.
Spare us, too, the charges of xenophobia that greeted the clumsy outbursts from ex-Parti Québécois premiers Bernard Landry and Jacques Parizeau. Quebeckers are ready to look past Mr. Sabia’s origins (Ontario) and his mother tongue (English) – though he didn’t do himself any favours when he laboured through his first French interviews and ominously referred to the “Caisse de défauts” (the Caisse of Flaws) during a tête-à-tête on TVA.
The two retired separatist generals struck a chord, however, when they suggested that a former top federal mandarin such as Mr. Sabia could never be counted on to “choose” Quebec over Canada. The Caisse CEO must leave no ambiguity about that. The fund’s very existence reflects Quebec’s choice to opt out of the Canada Pension Plan in 1965. It has routinely clashed with Ottawa and will again.
Brian Mulroney recounts in his memoirs that his bid to win Quebec only gained traction when, as Conservative Opposition leader in 1983, he stood up to an attempt by the Pierre Trudeau-led Liberals to stop the Caisse from buying more than 10 per cent of Canadian Pacific, then Canada’s biggest company.
“The first [Quebec] demographic to respond were the owners of small and medium-sized businesses,” Mr. Mulroney writes. “They depended on the Caisse for some of their financing. But more importantly, they clearly saw the Caisse as an instrument of pride for Quebeckers, which the Liberals were seeking to diminish.”
Mr. Charest learned politics at Mr. Mulroney’s knee, but he has never demonstrated the same visceral understanding of French Quebec as the Anglo Boy from Baie-Comeau. Lacking his own Quebec antennae, the Premier was swayed to choose Mr. Sabia by his chief of staff Dan Gagnier and Paul Tellier, who was boss to both Mr. Gagnier and Mr. Sabia at the federal Privy Council Office in the early 1990s.
Mr. Charest claimed to have “depoliticized” the Caisse with a new governance law in 2004. Selecting the CEO is supposed to be the purview of the Caisse’s board. But Mr. Sabia’s appointment came only a week after Mr. Tessier arrived as chairman. And the board’s four-member selection committee included Mr. Tessier and Jean-Pierre Ouellet, who was also named a director on March 6. Mr. Ouellet, it so happens, became chief legal officer at Canadian National Railway after Mr. Tellier and Mr. Sabia arrived from Ottawa to run CN in 1993.
How did Mr. Charest seriously expect Quebeckers not to smell a rat ? Or didn’t he care ?
Luckily, Mr. Sabia has one thing going for him. He is the anti-Obama, coming into the Caisse job facing such low expectations that he only has to recover some of the billions lost under Mr. Rousseau in order to silence his critics. How hard can that be ?