Toronto’s 10 biggest financial moments of the past 50 years
To celebrate Toronto Life’s 50th year, we’re counting down the biggest Toronto moments of the last half-century. This month: a ranking of the businesses, barons and bankruptcies that mattered most. Disagree with our choice for number one? Have your say at the bottom
GARTH DRABINSKY, COOKER OF BOOKS 1998
From phantoms to fraud
10 For much of the 1980s and 1990s, Garth Drabinsky filled theatre seats across North America. His Cineplex chain revolutionized the moviegoing experience. With his theatre company, Livent, the brilliant, passionate and tyrannical Drabinsky launched Tony Award–winning shows like Kiss of the Spider Woman and Showboat, and produced a long run of Phantom of the Opera. But appearances disguised the truth: the operation was leaking money, and Drabinsky was shifting numbers to cover it up. Livent filed for bankruptcy in November 1998; a closer examination exposed the fraud and brought down a juggernaut.
THE END OF EATON’S 1999
A Canadian retail icon closes its doors
9 The notice posted on the doors of Eaton’s downtown flagship on August 23, 1999, drew a crowd: the 130-year-old department store chain was liquidating its stock under the Bankruptcy and Insolvency Act. The company, whose iconic catalogue had revolutionized the way Canadians bought products, had failed to adapt to a changing retail environment and by the turn of the century was seen as out of date. It was a stunning fall for the family many considered Canada’s homegrown aristocracy.
CONRAD BLACK’S TRIAL LATE 2000s
The baron falls to earth
8 Conrad Black was a towering figure in Toronto social and business circles, his Hollinger International at one point the world’s third-largest English-language newspaper conglomerate. Then, in 2005, shareholders initiated a revolt, demanding examination of alleged misappropriation of tens of millions of dollars. The resulting Chicago trial, in which Black was convicted of three counts of fraud (two were later overturned) and one of obstruction of justice, was a grand spectacle, the security camera footage of Black and his chauffeur removing 12 boxes from his Toronto Street offices its most indelible moment.
THE MILLION-DOLLAR MILESTONE 2014-2015
Detached homes hit the stratosphere
7 For a brief moment in April 2014, the average price for a detached home in Toronto crossed the seven-figure barrier. A year later, it happened again. A $1-million home once conjured images of domestic luxury; today, it might mean a modest two-storey house in an average neighbourhood.
THE NORTEL BOOM AND BUST 2000
The share price reaches a historic ceiling, then everything falls apart
6 Nortel, suppliers of the world’s first all-digital phone network, was the thriving offshoot of Alexander Graham Bell’s original telecommunications upstart. In July 2000, when the Brampton-based company’s shares hit a peak price of $124.50, it made up a gargantuan 33 per cent of the valuation of all companies on the TSX. The party was too good to last. The tech bubble burst and the company became an industry laggard. In October 2000, news of a revenue shortfall prompted a sell-off. Massive layoffs followed while executives drew multimillion-dollar bonuses. Three execs were charged with fraud (later acquitted). In 2009, its shares worth 39 cents, Nortel filed for bankruptcy.
SUNDAY SHOPPING BECOMES LEGAL 1992
No more rest on the Lord’s Day
5 Every Sunday morning, furrier Paul Magder opened the doors to his Spadina Avenue shop, and by day’s end police would deliver yet another summons for violating the Retail Business Holidays Act, which prohibited Sunday commerce. Over a decade, Magder received $514,000 in fines, making him the poster boy for the fight to operate a business on the Lord’s Day—a Protestant hangover bylaw with fleeting public support. Then, one day in the spring of 1992, premier Rae repealed the ban. The legal costs of the battle forced Magder into bankruptcy. His legacy endures.
RIM’S RISE AND FALL 2000s
The telecom giant’s dramatic arc
4 How popular was the “CrackBerry”? In 2007, at its peak, Research in Motion had 12 million subscribers and $1.67 billion in annual revenue. In 2009, president-elect Obama refused to give his up, and Fortune declared RIM the world’s fastest-growing company. Almost as quickly as it rose, the company spiralled. New products like BlackBerry Storm landed with a thud while the iPhone stole the public imagination. Industry prognosticators began writing the company’s epitaph. Today, RIM is a shadow of its former self—and a cautionary tale for tech companies about the pace of innovation.
PAUL MARTIN SAYS NAH 1998
The veto of two bank mergers helps Canada weather the recession
3 Faced with daunting competition from U.S. mega-banks, TD petitioned to merge with CIBC, and RBC with the Bank of Montreal. Finance minister Paul Martin vetoed both, claiming they threatened to reduce competition and give banking fat cats a dangerous degree of power over the economy. Plus, if the global markets tanked, Canada, its eggs nestled in too few baskets, would be far more vulnerable. Martin was lambasted for his conservatism, but when the recession hit a decade later, Canadians were singing his praises.
MIKE HARRIS AND THE BIG DOWNLOAD 1997
Queen’s Park flips city hall the bird
2 It was an uneven trade: in exchange for assuming educational funding, the province foisted public housing, social services and transit costs onto municipalities. The result was disastrous for Toronto. The TTC, forced to rely even more on the fare box to operate, had no choice but to cut services despite a growing ridership. The public housing repair backlog worsened. Already creaky infrastructure grew creakier. The lingering legacy of the Common Sense Revolution: city council scrambling to makes ends meet every budget season.
EXODUS FROM MONTREAL 1970s
Adieu Saint-Jacques, hello Bay
1 The Bank of Montreal and Sun Life were among the first to make the move west along the 401 in response to the new French language laws in Quebec. Toronto became the financial centre of the country, a magnet to investors, traders, high rollers and dozens of major Quebec-based companies.