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Review: Elaine Dewar's The Handover explores the fate of a CanLit institution

Elaine Dewar.

Danielle Dewar

Title
The Handover
Author
Elaine Dewar
Genre
Non-fiction
Publisher
Biblioasis
Pages
382
Price
$29.95

Nothing is ever simple when it comes to McClelland & Stewart. The fabled yet troubled M&S used to style itself "the Canadian Publishers," as if all competitors were beneath its notice. That was when the flamboyant Jack McClelland succeeded his father to run the show from 1952 until 1985. And it was a show.

Possessed of abundant boyish charm and a manic flair for publicity, McClelland published most of the major Canadian authors of his generation. He promoted his writers extravagantly, made them stars and they loved him for it. Leonard Cohen called him "the real Prime Minister of Canada."

McClelland's high-flying came at a cost. His financial crises peaked in 1971 when he announced M&S was for sale – possibly to an American buyer. At a time of surging cultural nationalism, the Ontario government jumped in to refinance the company, declaring it "a national asset" and keeping McClelland in charge. M&S became the catalyst for new federal and provincial programs to grow a robust Canadian-controlled book industry.

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Ever after, the next generation of writers and publishers considered M&S an icon of what we called "cultural sovereignty." Award-winning investigative journalist Elaine Dewar is part of that generation. Thirty-two years after McClelland sold M&S to the late Avie Bennett, the Toronto property developer and philanthropist, Dewar has written The Handover. Cast as a non-fiction mystery with Dewar as the intrepid sleuth, it doesn't tell how Bennett, who died last week at 89, ran M&S but what he did afterward – when he retired after 15 years at the helm of that "albatross," as McClelland had termed it.

It bears mentioning how Bennett operated the "national asset" he'd acquired for $2-million. The literati fretted about its future under a businessman with no publishing experience, but Bennett, a proud man who had rebuilt his family's diminished fortune, proved a conscientious and committed publisher, pouring personal treasure into M&S while keeping it an industry flagship. Relying on executive editors Doug Gibson and Ellen Seligman to build the list, Bennett's M&S published fiction by Alice Munro, Michael Ondaatje, Anne Michaels, Rohinton Mistry and Guy Vanderhaeghe, and memoirs by Pierre Trudeau and Brian Mulroney. Bennett sat in on editorial decisions as one among equals. With his customary frankness, he once told me, "I was against publishing your book, but my staff outvoted me."

Meanwhile, the book industry staggered under tsunamis of change. Big-box retail chains imposed tough terms on publishers and, together with Amazon, crushed independent bookstores. The Internet fragmented the market by making every book available all at once. Publishers scrambled to digitize, creating e-book editions for all platforms. Sales of new titles declined.

By the new millennium, survival was tougher than ever, and the then-72-year-old Bennett was the first Canadian publisher with an exit strategy. In 2000, he divested himself of M&S in a most unusual deal. He donated a 75-per-cent shareholding to the University of Toronto, declaring, "To achieve the survival of one great Canadian institution, I have given it into the care of another great Canadian institution." And he sold the remaining 25 per cent to the Canadian branch of Random House, owned by German media giant Bertelsmann AG – 25 per cent being the maximum foreign ownership a Canadian publisher could have and still qualify for public funding.

Dewar shared the alarm of the deal's critics over Bennett's end-run around the spirit, if not the letter, of federal rules to prevent foreign takeovers of Canadian publishers. True, on paper, M&S would be 75-per-cent Canadian. But who would have effective control – U of T, with a majority on the board of directors but no day-to-day involvement, or Random House Canada, which took over M&S's sales, distribution and financial management, services for which it charged "market value," and even covered its losses?

But the deal was a fait accompli. Dewar describes how Bennett and his partners in the transaction travelled to Ottawa to extract advance approval from Sheila Copps, the Minister of Canadian Heritage, who affirmed in writing that the Liberal government still considered M&S Canadian-controlled. This arrangement lasted 11 years, well into the Harper era. M&S became increasingly integrated with Random House but continued to insist on its editorial independence and its eligibility for grants and tax credits. In January, 2012, however, the other shoe dropped: Random House acquired all of U of T's shares. The charade of a Canadian-controlled M&S, as Dewar and others saw it, was over.

At the time, I wrote a magazine article in which I interviewed Bennett, who wasn't happy with the deal's denouement, and Random House of Canada chief executive Brad Martin. They agreed on the main problem: Higher costs in a changed market had resulted in operating losses at M&S and a big cumulative debt to Random House. This was why the value of U of T's shares had fallen to zero – and why Random House paid only a dollar for them. Still, I wrote, after all Bennett had done to keep M&S creatively vibrant as a vehicle for Canadian authors, what fair-minded person would begrudge him a tax credit for donating his shares?

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Elaine Dewar, that's who. Dewar has the capacity for moral outrage of a good investigative reporter. Although she states "there are no villains here," she's hopping mad at the people she sees as the villains of this piece: first of all Bennett, for cleverly devising "a brilliant method to free himself of the M&S albatross, to cash out, while handing it off, piece by piece, to the largest foreign-owned publisher in the country."

Dewar is equally outraged by U of T executives for their part in the scheme, "publicly pretending to be in control of M&S" while letting it be run by Random House. And she denounces the politicians and bureaucrats who failed to enforce their own policy to ensure Canadian book businesses remain Canadian. Instead, they hollowed the policy out for the benefit of "those determined to advance their private interests."

Dewar's moral indignation is understandable but hardly unique. For years, critics have blamed successive Liberal and Conservative governments for honouring the foreign-investment rules more in the breach than the observance. What is unique is Dewar's compulsion to tear down the veils of secrecy concealing how this deal was done. Her weapons are intelligence, old-fashioned digging and sheer persistence, aided by apparently unlimited time for research.

Meeting with a Deep Throat identified only as a Toronto independent publisher (industry watchers will enjoy deducing his identity), Dewar hears dark hints of wrongdoing that stoke her outrage. This spurs her on to conduct progressively more revealing interviews with Doug Gibson, Avie Bennett himself and Robert Prichard, the mover and shaker who was U of T president when the deal was done and whom she admits to "stalking."

These interviews are the heart of her book. Dewar gets to ask all the questions industry insiders have been dying to ask for years. Some of the answers she elicits are remarkably candid. Prichard even helpfully tells her the best way to get her hands on confidential documents about the handover: Freedom of Information requests filed with U of T under Ontario law.

Gleefully parsing the dense euphemistic prose of university memos, lawyer's letters, government communications, even personal e-mails, Dewar lays bare the mysteries of the deal in mind-numbing detail. We do learn the Big Number, never before made public: For purposes of the transaction in 2000, M&S was valued at $21.2-million. This reveals the price Random House paid for its 25 per cent ($5.3-million) and the amount of Bennett's tax credit for donating 75 per cent to the university ($15.9-million).

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Describing her interview with the then-87-year-old Bennett, Dewar admits a certain ambivalence. She admires his intellectual acumen and "roguish smile" and relates that when Bennett and her mother were living in the same seniors' residence, her mother found him so charming that she invited him into her bridge group. Dewar also recalls his prediction that The Handover will be "a book no one will read."

Whether Bennett is proved right or not, The Handover spends too many of its 380-odd pages obsessively belabouring minutiae only policy wonks will care about. But in dissecting the deal's entrails, Dewar has a grander purpose: to demonstrate "things about the way Canada really works," about the way corporations, politics and academia work hand-in-glove behind the scenes to benefit the powerful. She's written a case study in public-interest journalism, showing how to break a story open by refusing to be cowed by power and refusing to take no for an answer.

The book's flaw is its lack of context. By focusing exclusively on M&S, Dewar scarcely acknowledges that too many other major Canadian publishers have fallen victim to the same economic pressures. Her Toronto-centrism leads her to equate M&S's fate with the death of our generation's dream of a defining national literature supported by public policy. She discounts the importance of the fertile indie publishing (including her own book, published by rising Windsor, Ont.-based Biblioasis) still happening across the country with public support. And she underplays the excellent Canadian publishing being done by the multinationals.

No question: It's a sad loss for our literary culture that Jack McClelland's and Avie Bennett's M&S is no longer with us. But, then, Canadian publishing, as we all must know by now, is and always has been an exceedingly perilous trade.

Roy MacSkimming's books include The Perilous Trade: Publishing Canada's Writers.

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