Power Corporation of Canada

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Power Corporation of Canada, Inc.
Type Public
Traded as TSXPOW
Industry Conglomerate
Founded 1925
Founder(s) Arthur J. Nesbitt and Peter Thompson
Headquarters Montreal, Quebec, Canada
Key people Paul Desmarais, Paul Desmarais, Jr. and André Desmarais
Products Financial services, insurance, media and energy
Revenue Decrease CAD 29.642 Billion (2013)
Net income Increase CAD 977.0 Million (2013)
Employees 30 900 (2013)
Website PowerCorporation.com

Power Corporation of Canada is a diversified international management and holding Canadian company. Through its subsidiary, Power Financial Corporation, it has interests in companies in the financial services sector in Canada, the United States and Europe. Through its subsidiary, Square Victoria Communications Group, its holds interest in companies from the communications and media sector. Power Corporation also holds and actively manages a portfolio of investments in the United States, Europe and Asia. The company manages assets of $500 billion.[1]

The corporation is known for its active participation in Canadian politics through its relationships and the relationships of the Desmarais family with prominent politicians of all political stripes.

History[edit]

Power Corporation of Canada was formed in 1925 by stockbrokers Arthur J. Nesbitt and his partner Peter A. T. Thompson. Nesbitt served as the company's first president. Power Corporation was created as a holding company to manage their substantial investments in public utility companies involved in the electrical power industry in Quebec's Eastern Townships plus in the other Canadian Provinces of Ontario, Manitoba, New Brunswick and British Columbia. In the latter part of the 1930s, the company acquired a controlling interest in Bathurst Pulp and Paper Company Ltd. and in 1938, Canadian Oil Companies Ltd., selling the latter to Shell Oil Company in 1962.

In 1952, Arthur J. Nesbitt was succeeded as president by his son Arthur Deane Nesbitt (1910–1978). The family sold most their interest in Power Corporation to the Paul Desmarais group in 1968 and by 1970 no longer had any involvement. At that time, Paul Desmarais had already started implementing an investment philosophy which continues today: responsible management, prudent approach to risk, long-term value creation, etc.

1984 saw the creation of a diversified management and holding company, Power Financial Corporation. Global expansion for the group began in the 1970s in Europe and followed in the 1990s in Asia. The group's involvement in the finance sector continued in 2000 with the acquisition of Canada Life, Mackenzie Financial and Putnam Investments.

Power Corporation owns 100% of Square Victoria Communications Group, 66.1% of Power Financial Corporation and 4.3% of CITIC Pacific.

While it was originally established as an electric utility holding company, the company became a conglomerate with major interests in publishing and the finance industry.[2]

Corporate governance[edit]

Current members of the board of directors of the company are:[3]

Directors Emeritus of the company are:

As a holding company, the officers run the companies through the various Boards.[4]

Corporate Social Responsibility[edit]

Community Investment: Responsible management has long been a corporate value at Power Corporation. This is reflected through the corporations' community investment. Power Corporation has been a supporter of the Imagine program in Canada since 1989.[5] Its subsidiaries also support this national program which promotes corporate and public commitment in communities. In addition to promoting volunteering, the program calls for corporations to contribute to a target of 1% of pre-tax domestic profit to charitable causes,[6] threshold which Power Corporation has met year after year.

Through charitable giving and volunteering initiatives, Power Corporation has contributed to more than 800 organizations in the past. In 2013, the company has the community investments was segmented as follows :

  • Community Development (31%)
  • Health (21%)
  • Arts and Culture (20%)
  • Education (24%)
  • Environment (4%)

Frère-Bourgeois Partnership[edit]

Pargesa Holding SA[7] is held by Parjointco NV and BNP Paribas and its investment portfolio includes Lafarge (cement and building materials), Imerys (industrial minerals), Total (oil and gas), GDF Suez (electricity and gas), Suez Environnement (water and waste management) and Pernod Ricard (wines and spirits). Parjointco is indirectly owned by Power Corporation and Belgian tycoon Albert Frère.[8] The Desmarais family and Frère are shareholders in oil company Total SA, France’s largest oil company.[9] Total was the subject of a formal investigation by the United Nations in February 2010 for bribery charges concerning oil deliveries from Iraq during the rule of dictator Saddam Hussein.[10][11]

Politics[edit]

The company is controlled by Paul Desmarais, Sr.. Paul Desmarais, Jr. is one of thirty members of the North American Competitiveness Council, a group whose advice directs the policies of Security and Prosperity Partnership of North America (SPP). Additionally, the company has long been a close ally of the Liberal Party of Canada, although former or current members of other Canadian political parties have also worked for Power Corp.

The company was criticized for its links with Canadian politics,[12] and specifically for its commitment to the defense of federalism in Quebec. Indeed, several former Canadian prime ministers have worked on staff. A brief summary of the connections between Power Corp. and those with political power in Canada is below.

  • Former Prime Minister of Canada, Paul Martin, was hired in the 1960s to work for Paul Desmarais, Sr. by Maurice Strong. Martin became President of Canada Steamship Lines, a subsidiary of Power Corp., and in 1981 Desmarais sold the company to Martin and a partner. Martin went on to make his personal fortune as an owner of CSL.
  • Former Prime Minister of Canada Jean Chrétien sat on the board of Power Corp. subsidiary Consolidated Bathurst in the late 1980s before he became the leader of the Liberal Party of Canada. Chrétien's daughter France is married to the son of Paul Desmarais, Sr., André. Also Chrétien's chief of staff Eddie Goldenberg worked in the past for Power Corp.
  • Former Prime Minister of Canada, the late Pierre Trudeau, served in the mid-1990s on Power Corp.'s international advisory board. Trudeau's assistant Ted Johnson also worked for Power Corp. During the Trudeau administration Michael Pitfield held a variety of positions in government but during his time in the private sector he was at one time a Vice-Chairman of Power Corp. and is currently listed as a Director Emeritus.
  • Former Prime Minister of Canada Brian Mulroney also has a relationship with Power Corporation. Mulroney's friend Ian MacDonald described Desmarais as “Mulroney’s mentor in the business world,” and it is believed that Mulroney has done legal work for Power Corp. since the end of his term as Prime Minister. Additionally, former Mulroney Minister of Transport Don Mazankowski is currently Power Corp.'s company director.

Assets[edit]

References[edit]

External links[edit]