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Home > Spotlight > Paul Martin
Gives Up Canada Steamship Lines |
Paul Martin and Canada Steamship Lines
This section examines background on the issues and events surrounding Mr. Martin’s
decision to divest himself of Canada Steamship Lines. Specific topics include:
- Background on Canada Steamship Lines
- Opposition questions Martin on Ownership
- Martin’s decision to gives control to his sons
- Statements made by Martin following his decision
- Important links
Background on Canada Steamship Lines
-
Organization
- Canadian Steamship Lines (CSL) Group, with subsidiaries Canadian Steamship Line
Inc. (Canada) and Canadian Steamship Lines International.
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Headquarters
- Montreal, with affiliated offices in Halifax, Winnipeg, Burlington, Boston, Singapore
and Sydney, Australia.
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Business
- Bulk cargo shipping (specializing in self-unloading bulk carriers with inland, coastal
and deep sea trading capabilities).
-
Assets
- CSL Group owns 37 vessels with annual bulk cargo movements totaling 27 million
tonnes.
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Revenue
- CSL controls assets worth $690 million and had annual revenues of $280 million
(March 2001).
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Ownership
- In 1988, Paul Martin took full control of CSL. Upon entering politics in 1994,
Mr. Martin placed the company into blind trust. In 2003, he transferred control to
his sons.
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History
- 1845 – Canada Steamship Lines (CSL) originated as a river-boat company
on the St. Lawrence river in Ontario.
1924 – CSL introduced its first self-unloader cargo vessel.
1974 – Paul Martin is appointed president of CSL
1981 – Paul Martin and Laurence Pathy purchase CSL from Power Corporation
for $189 million.
1988 – Paul Martin buys out Laurence Pathy and takes full control of CSL.
2000 – CSL Group takes a 50% interest in the shipping company Marbulk
2003 – Under intense political pressure, Paul Martin hands over control
of CSL to his three adult sons.
Opposition Questions Martin on Ownership
In early 2003, the Opposition parties attacked Martin on his ownership of Canada Steamship
Lines. Since 1994, the company has been held under blind management, an arrangement
in which Martin retains ownership of the company but is isolated from its management.
Opposition parties want questions answered about what Paul Martin knew about his business
dealing while he was finance minister. Several reports in the Ottawa Citizen newspaper
suggest Martin was given several briefing about his company's activities while in cabinet.
These briefings were legal under Canada’s Blind Management Agreement and were done in
the presence of the ethics councellor.
Opposition parties have asserted that he would face extensive conflict of interest
if he became prime minister and retained company ownership. They contend that he must
choose between one or the other. NDP leader Jack Layton stated, “I mean, he is so attached
to his ships that he can't let them go.” Conservative Leader Joe Clark said Martin has
to learn that life is full of hard choices and must choose between “running your country
or running your companies.”
Martin Gives Control to Sons
In response to Opposition attacks, Mr. Martin moved quickly to divest himself of Canada
Steamship Lines ownership by giving control to his sons. Previously, the company had
been held in a blind management agreement. Mr. Martin had held legal ownership, but
was isolated from its management.
Under the new divestment plan, Martin and his wife, Sheila, gave sons Paul, James and
David all of their common and preferred shares of Canada Steamship Lines. The result
is that Mr. Martin no longer has legal ownership and will not receive regular annual
payouts from the company. However, he will continue to receive a pension.
Statements Made by Martin
Following his decision, Martin released a public statement. The following are excepts
from that statement:
Regarding the principle of conflict of interest
“Let me say unequivocally that I recognize the importance of these questions [concerning
ownership of CSL] and the underlying principle at stake. Canadians must have confidence
that their political leaders are acting always in the public interest and on the nation's
behalf. Private gain has no place in public life. I have always believed that, and
I have always acted accordingly.”
Regarding his relationship with CSL while he was finance minister
“First, these meetings [concerning CSL] took place strictly at the discretion of
the Ethics Counsellor. He determined whether a meeting was required based on his review
of private and commercially sensitive information provided by the company itself.
Moreover, he was present at all times with the full authority to intervene or bring
the meetings to a halt. Second, the meetings were infrequent -- no more than a dozen
in nearly a decade -- and were restricted to very specific matters as determined by
the Ethics Counsellor.”
Regarding the divestiture of CSL to his sons:
“The bottom line is that I will completely sever all ties with Canada Steamship
Lines.”
“First, having relinquished control in CSL, I have been advised that any potential
for a real conflict has been removed.”
“Second, CSL's business activities will be kept 100 per cent blind to me. Having
no interest in the company, there is, of course, no reason for me to be privy to this
knowledge in any event. Furthermore, to remove any question whatsoever, protocols
would be established to ensure that no information ever shared by the company with
the federal government could ever be shared with me.”
“Third, for any period of time that I might serve as prime minister, all company
business -- including contracts, financing arrangements and other endeavours -- would
be made completely available to the new ethics commissioner. There would be no aspect
of the company's business to which he or she would be denied access.”
Important Links
Canada Steamship Lines Webpage
Paul Martin’s Statement on Canada
Steamships Lines
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