Bay Street has arrested another former federal cabinet minister, Canada’s Imperial Bank of Commerce has appointed Navdeep Bains as vice president in its investment banking division.
Mr Bains, who was first elected as a Member of Parliament in 2004 and became a cabinet minister in 2015 after Prime Minister Justin Trudeau won a majority government, most recently served as Minister of Innovation, Science and Industry. He announced in January that he would not seek re-election and at the same time withdrew from the cabinet, but remained an MP.
The recruitment announced on Monday is that of another former federal cabinet minister, just from the opposite side of the aisle. Lisa Ritt, who held several cabinet portfolios under Prime Minister Stephen Harper, joined CIBC in January 2020 in the same role, and will work alongside Mr Bains.
The bank and Bay Street at large have a history of embracing former politicians. In 2010, CIBC hired the late former federal cabinet minister Jim Prentiss, and as of this spring, former Deputy Prime Minister John Manley chaired its board of directors. Other notable employees at Bay Street over the years have included former head Frank McKenna, who joined the Toronto-Dominion Bank, and Brian Tobin – former chief and federal cabinet minister – who joined the Bank of Montreal. They all follow former federal cabinet minister Ed Lumley, who joined the BMO in the early 1990s.
But this trend is becoming increasingly apparent in recent years. In 2018, TD Securities, TD’s investment banking arm, appointed former federal cabinet minister Rona Ambrose as deputy chair. A year later, BMO appointed former federal cabinet minister Scott Bryson as vice president at its investment banking division, BMO Nesbit Burns.
While the title “vice-chair” sounds high-ranking, it’s thrown around quite loosely on Bay Street, and used for many different situations, bankers say.
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Sometimes seasoned bankers who are asked to quietly consider retirement are thrown out the door from managing director to vice president. In other cases, vice-chairs may be rainmakers whose expertise spans multiple industries – while many senior bankers focus on a single area.
The Granthshala is not identifying banking sources because they are not authorized to speak publicly on the issue.
The role of the vice president is also often broad enough that his duties can be negotiated between the politician and the bank.
At some banks, there is hope that former politicians will offer a fresh perspective when considering potential deals. While Bay Street and Ottawa are both power centers in their respective affairs, politicians and bankers ultimately account for different constituents – and their mindsets rarely overlap.
In 2010, bankers were salivating over potential fees to accrue from BHP Billiton Ltd.’s $38 billion hostile takeover bid for Potash Corporation of Saskatchewan Inc. Meanwhile, former Saskatchewan Premier Brad Wall opposed the deal at the time, even though he led the conservative-leaning Saskatchewan party. Mr Wall is now a Special Advisor at the corporate law firm Osler, Hoskin & Harcourt LLP.
Former politicians also have some influence – enough to open doors with customers. A chief executive or head of corporate development may not return a banker’s call, but they may be more inclined to hold a meeting with a former Ottawa power player.
The role of the vice-chair may sound ludicrous, but bankers who have worked with former politicians say it takes some work to be successful. There’s a honeymoon period after the politicians get involved, but bankers can be the sharks, and after a year or two, they start asking what really high-paid former politicians are bringing to the table.
Investment bankers may also be reluctant to bring someone new to client meetings. They get paid based on the deals they offer, and some people don’t want to share those charges.
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