Why Mexicans Don't Drink Molson. Andrea Mandel-Campbell

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      3. How many were actually subsidiaries or spin-offs of foreign companies? (to be dealt with in Chapter 3)

      4. How many, despite a listing on a Canadian stock exchange, had a CEO and/or a head office located south of the border?

      The answers lead to an astonishing conclusion: an economy on cruise control, with foreigners and foreign-born Canadians at the wheel, while native-born Canadians snooze in the back seat. To begin with, almost every significant high-tech firm to come out of the Ottawa area, known in better times as Silicon Valley North, was started by a clutch of British entrepreneurs. The list includes Cognos, Corel, Zarlink Semiconductor, Mitel Networks, Tundra Semiconductor and Newbridge Networks. The exception — JDS Uniphase — was started by the beret-wearing Slovak, Josef Strauss.

      Hungarian-born Peter Munk founded Barrick Gold, while compatriot Frank Hasenfratz heads up Linamar, Canada’s second-largest auto parts company. Only Magna, the parts giant founded by Austrian-born Frank Stronach, is bigger. Two Germans, Klaus Woerner (now deceased) of ats Automation Tooling Systems, a maker of manufacturing equipment, and Husky’s Robert Schad, round out Canada’s contribution to the tool and die industry. Says Schad of the preponderance of European immigrants:

      “We had a good technical education and then flourished in this country because there was no competition.”

      The field was equally unencumbered for brash and innovative entrepreneurs like Isidore Philosophe, who emigrated from Beirut, turning a basement business into Cinram, the world’s largest manufacturer of cds and dvds; Aldo Bensadoun, the Moroccan-born owner of the Aldo shoe chain; Karl Kaiser, the Austrian co-founder of award-winning Inniskillin wines; Peter Nygärd, the high-flying Finn who launched a textile empire from Winnipeg; and Robert Friedland, the American hippie turned promoter behind the Ivanhoe energy and mining ventures. Moses Znaimer, the architect of the Toronto-based CITY TV media group, was born in Tajikistan, the son of holocaust survivors. Saul Feldberg also survived the war in Poland and went on to found the Global Group of Companies, one of the world’s largest office-furniture manufacturers. German-born Stephen Jarislowsky, the flinty-edged octogenarian heading up the multibillion-dollar investment boutique, Jarislowsky Fraser & Co., escaped from France just as the Nazis invaded in 1941. Even Galen Weston, the grocery scion, was born in Britain, whereas Mike Lazaridis, co-founder of the country’s high-tech darling, Research in Motion, was born in Turkey.

      In perhaps the most telling example of all, Canada’s most iconic brand, Roots, was started by two Americans from Detroit. In the seemingly rare instances in which companies spring from Canadian-born loins, they are rarely managed by Canadians. Scratch beneath the surface of many a Canadian company and you will likely find an American. The elite fraternity oversees such national icons as Air Canada,* CN Rail, Saskatchewan Wheat Pool,† and, until 2006, Canadian Tire.‡ Other alumni include oil company Suncor Energy, electronics manufacturer Celestica, forestry firms Abitibi-Consolidated, Tembec and West Fraser Timber, Magna International and Nortel. Our southern cousins also oversee the mining interests of Cameco, Potash Corporation of Saskatchewan, and INCO, until it was acquired by the Brazilians. Even Stelco, since emerging from bankruptcy protection in March 2006, is run by the American-born former CEO of International Steel. British-born executives run McCain Foods and Talisman Energy, while an Australian headed up Ontario’s Hydro One, the government-owned electrical utility, until resigning over a scandal involving expense accounts in December 2006.

      Some companies are even double dippers. CN, Cott,* Lions Gate Entertainment, NOVA Chemicals, Brookfield Properties (which built the iconic Montreal Forum) and Thomson Financial are not only American-run, but their CEOS all live in the United States. ati Technologies, one of the world’s largest 3d-graphics-chip designers, has the distinction of being a triple dipper. Founded by Kwok Yuen Ho, the son of a wealthy Chinese family dispossessed by the communists, ati’s top management is American, including CEO David Orton, who commutes to work from California.† It seems only fitting, then, that the Canadian Council of Chief Executives, the country’s leading corporate organization, is headed by American-born Chairman Rick George.

      ‡ To foreigners this is striking. “Canadians don’t have confidence in their own abilities. They often bring in Americans to run their companies,” says Boris Rousseff, a European trade consultant to Canadian firms. “It’s an issue of corporate culture. Canadians try to pretend they are not who they are.”

      And therein lies the root of the dilemma. Canadians are ensnared in a kind of Gordian knot: because their economy is essentially run by foreigners, they necessarily downplay or underestimate their own abilities, and by extension their own Canadian brand. And the fact that there are no Canadian brands reinforces Canadians’ suspicions that they have no value. Why is it, asks Andrew Stodart, vice-president of marketing and business development for Diamond Estates Wines and Spirits, that uniquely Canadian brands like Coffee Crisp candy bars and Molson Canadian beer were never marketed around the world? “Canadians abdicate brand building,” he says. “It comes back to the great Canadian inferiority complex.”

      Sadly, it becomes a self-fulfilling prophecy. Without the premium and protection that brands afford — not to mention the estimated 30 per cent boost they bring to a company’s stock market price — the only other option is to be a commodity. “You are condemned to be second rate,” says Stodart, competing on price instead of market position. And in today’s global market, “there’s always somebody cheaper.”

      Even the Chinese realize it’s a losing proposition. Their national champions have begun acquiring internationally recognized brands like rca televisions and IBM’s personal computer division. China’s leading car maker, Nanjing Automobile Group, has bought the design rights to the United Kingdom’s bankrupt MG Rover Group and plans to make its own high-end brand sedan, which it will sell in Europe and the United States. In 2006, a Chinese brand (telecom giant China Mobile) ranked, for the first time, among the world’s most valuable brands,* coming in fourth after Microsoft, GE and Coca-Cola. Its estimated value: us$39 billion. Beijing-based Longfa Decoration Corp., in an attempt to copy the American franchise model, launched its own furniture retailer, Mermax, in the United States. “We want to provide a full service and create a brand,” said Yan Shihong, the enthusiastic Chinese store manager of its first Chicago location. “It’s the American way, right?”⁴⁰

      Canada, in contrast, seems to have turned the normal evolution from low-cost manufacturer to value-added brander on its head. “We are a component nation,” says Jeff Swystun. “We are a bit like China in the last century going into this century. We’ve flipped it on its head. But China is sick of playing that game. And we need to get real sick of playing that game real fast.” While the no-name, behind-the-scenes nuance may be part of the Canadian character, says Swystun, “it’s not going to allow us to win on the global business playing field.” Instead, it will brand us as “the economy that stands for nothing,” a squirrel in a menagerie of tigers, dragons and elephants.

       CALL CENTRE NATION

      It’s hard to get your knickers in a knot when the economy is firing on all cylinders. For most of this decade, Canadians have basked in the glow of the best economic conditions of the past fifty years, with unemployment at historic lows, companies posting record profits and skyrocketing oil and commodity prices bringing a new sheen of respectability to the loonie. So what if we don’t have brands or that we suck as salespeople? So what if we’re not the Americans’ number one trade partner or that our companies are decidedly domestic? Our gdp per capita is higher than that of Finland, a nation that is supposedly more innovative and competitive than we are, and a shot of vodka will only cost you five dollars here, compared with fifteen dollars in Sweden.

      “Who cares,” asks Andrew Sharp, Canada’s resident productivity СКАЧАТЬ