Paul Martin Buys CSL Group Inc.
One month later, in July, 1981 Power Corporation announced it was selling its subsidiary CSL Group for $195 million (CAD). CSL Group at this time included the shipping company, shipyards, engineering firms, and a bus service (Voyageur, previously known as Provincial Transport). The following month in August, 1981, Paul Martin and his friend Lawrence Pathy secured financing and announced their intention to purchase CSL Group Incorporated for the price advertised by Power Corporation.
On August 9, 1983 citing federal government interference in the shipping industry, Martin stated: "then... they are going to come in with some grand and glorious package that will give the government control of the industry because they don't understand private enterprise."
By the mid-1980s, CSL's only remaining shipyard (Collingwood) was undergoing financial difficulties and was closed on September 12, 1986 with the loss of 800 jobs. At the same time, CSL Group Inc.'s expansion outside of Canada was well underway. In November, 1988 President and CEO Paul Martin was elected as a Member of Parliament and stepped aside from directing the day-to-day operations of the company.
In March 1991, following changes to Canada's taxation laws regarding international earnings, CSL backed away from threats to move its headquarters outside of Canada, however in December the president who replaced Martin resigned in opposition to plans to move international operations outside the country.
Replacement management in April, 1992 formed a new CSL Group Inc. subsidiary headquartered in Massachusetts to be called CSL International Inc. Canada Steamship Lines Inc. would remain as the Canadian operation under CSL Group Inc., and the conglomerate would remain headquartered in Montreal.
In November, 1993 the newly re-elected Paul Martin was appointed to the cabinet and named Minister of Finance. On February 1, 1994 Martin placed his shares in CSL Group Inc. under a "Supervisory Agreement" to be managed by lawyers and financial advisors, although he would be allowed to intervene in company decision-making should events warrant.
In June, 2002 Martin quit the cabinet as Minister of Finance to pursue a bid for leadership of the Liberal Party of Canada. On March 11, 2003 Martin bowed to public and media pressure on his interest in CSL Group Inc. and announced that he would sell his interests in the company to his three sons, saying that his ownership would "provide an unnecessary distraction during the leadership race."
On December 12, 2003 Martin becomes the 21st Prime Minister of Canada. On January 28, 2004 the federal government, in response to opposition party and media enquiries, revealed that CSL Group Inc. had received $162 million in federal government contracts, grants and loans since Paul Martin became Minister of Finance in 1993. Earlier figures released in 2003 had suggested CSL Group Inc. had only earned $137,000 in federal government contracts during this time period.
Read more about this topic: Canada Steamship Lines
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