Citizen Izzy

[Editor's note: This is the second of four excerpts from Marc Edge's new book 'Asper Nation: Canada's Most Dangerous Media Company'.]

Israel Harold "Izzy" Asper was many things at once, a fountain of energy who combined his passions as liberally as he mixed his martinis. He could be ruthless in business and relentless in court, yet charming socially and generous to a fault in his devotion to philanthropy. The chain-smoking, piano-playing jazz aficionado embarked on successive careers, which often overlapped. He was by turns a lawyer, a tax consultant, a university lecturer, a newspaper columnist, a best-selling author, a politician, and finally a businessman. Commerce was a field he came to only in his 40s, but it was where he had his greatest success, making deals and fighting boardroom battles. "Business was much more suited to Asper's unvarnished style," noted a 1996 Maclean's profile. "He is egotistical but unpretentious, and often unguarded. He likes to amuse and to stir the pot." On the campaign trail with Asper in 1972, Globe and Mail reporter Martin O'Malley described him in terms that might have endeared the candidate to some. Others would have found the description derogatory.

Brash. Cocky. Impudent. He is 39, drives a Firebird convertible, wears snappy tweed suits and keeps his hair moderately past his collar. He once earned $200,000 in a peak year as a tax lawyer and consultant, and now he is slugging it out, dipping into his first electoral swim after being criticized for shying away from three previous by-elections since he was elected Liberal leader in October, 1970.

The Globe and Mail's Edward Greenspon saw Asper in 1987 as "a raspy-voiced chain-smoker whose fast-talking and outgoing style turn as many people off as on." Greenspon was obviously energized by the gregarious Winnipegger. He described him in a magazine cover story the following year as "overloaded with energy, charm and brains." Trevor Cole labeled him "a work of entrepreneurial art" in 1991. "When Izzy fixes on a goal, he is like a four-year-old's windup toy racer, moving relentlessly forward, bouncing off obstacles and roaring back, until he achieves it." According to Cole, Asper was "driven by the legacy of a workaholic father . . . who was never satisfied with himself or his sons." The result was a "pitiless" work ethic. "He will work until the dark and corrugated lids of his eyes leave him slits to see through and his voice seems to rise from the centre of the earth," wrote Cole. "Then he'll sleep for a day or more."

One friend and business associate, who wished to remain anonymous for obvious reasons, called Asper "the most aggressive businessman" he knew and "a Machiavellian genius." Even before his two defining business deals, Asper warranted inclusion in Peter C. Newman's 1998 re-examination of the Canadian establishment. The dean of Canadian business journalism deemed Asper "virtually immune to criticism" and found he tackled problems "with the grace of a tank." Modesty, noted Newman, was "not one of Asper's dominant traits."

Asper is one of a kind. . . . A Titan of his own making, he is solidly of the New Canadian Establishment, but not of it. A graduate of his unique school of meritocracy, he tries hard to ignore most establishment rites, and whatever establishment still exists in Manitoba returns the favor, by trying to ignore him.

Yet in later life, after he had risen to the top of the media business in Canada, others found Asper an unlikely candidate for power and influence. Ed Pearce described him in the Ivey Business Journal as "relatively short and overweight, with a florid face and gray, thinning hair," in 2001. "He is a heavy smoker who looks uncomfortable in a suit and has an obvious disdain for ties. In short, Izzy Asper does not fit the preconceived image of an international media mogul." Gordon Pitts portrayed him in his 2002 book Kings of Convergence as a man of contradictions -- worldly yet firmly grounded by his Manitoba roots. "He is very smart but defensive, carrying a two-by-four on his shoulder about being a Westerner and, some say, a Jewish outsider."

Rural beginnings

Asper was born in 1932 in Minnedosa, Manitoba, a town of 2,000 on the Little Saskatchewan River 200 kilometres west of Winnipeg. The Lyric Theatre there was run by his father. Leon Ausereper trained as a violinist at the Odessa Conservatory of Music but fled the Ukraine in the early 1920s following the Bolshevik revolution. He changed his name to suit a new country and got into the theatre business as an orchestra conductor in Regina during the days of silent pictures. Movie sound made musicians redundant, so he became an owner instead. The hard times of the Depression paradoxically proved a boon for the movie business, as people sought refuge in the new media miracle. Izzy Asper literally spent his childhood in the theatre, taking tickets before shows and scraping gum off the seats afterward. From Minnedosa, the family moved in 1941 to nearby Neepawa, a larger town of 3,500. There a second theatre, the Roxy, was added to the budding media empire of Leon Asper. Soon the family business had grown into a thriving chain of movie houses with the addition of two more theatres in Winnipeg. It was profitable enough to move the family to a comfortable home in the city's affluent River Heights neighborhood. There Izzy Asper would plant himself in the frozen tundra, stubbornly refusing to be moved by opportunities in eastern Canada and elsewhere.

It was in Winnipeg that Asper first showed a flair for media, founding a newspaper in his senior year at Kelvin High School in 1949. Unfortunately, the Kelvin Gazette was shut down after only one issue when Asper ran afoul of the local media regulator. "In one report of a Grade 12 party, references were made to labels on whiskey bottles," Asper explained. "The principal thought the reference was to alcohol consumed at the party. He closed the paper and I was suspended from school for about a week." Larry Zolf, who shot hoops with a teenaged Asper at the Young Men's Hebrew Association, described him on the basketball court as an "aggressive fast shooter." They spent summers together at B'nai Brith Camp in Sandy Hook, where the older Asper once saved him from drowning. "Izzy rescued me from a watery grave," recalled Zolf, "pulling me out by the hair." Camp counselors Nathan Divinsky and Allan Gotlieb, a future ambassador to the U.S., were preoccupied playing chess, according to Zolf. The libertarian Divinsky would become a University of B.C. math professor and future prime minister Kim Campbell's first husband. According to Zolf, Divinsky preached the right-wing gospel of Ayn Rand to the impressionable young campers.

[Divinsky] got nowhere with me, but did make an impression on Izzy, who liked Ayn Rand's ideas of rugged individualism and unfettered freedom and certainly preferred those ideas to my North End view of street-socialist thuggery for the greatest good for the greatest number.

At the University of Manitoba, Asper studied law and excelled in debate, one year being crowned not just campus champion, but best in western Canada. He also resumed his aborted career in journalism, writing a column on music for the Manitoban student newspaper. He dabbled in political writing, but there he would again run afoul of the administration. "I remember being summoned to the president's office when I advocated a student exchange with the Iron Curtain countries," recalled Asper. "This was . . . in the heyday of McCarthyism when everyone saw a Communist saboteur behind every bush." Asper did more than just write about politics, putting his debating skills to use by running for office. His campaign in the faculty of arts was a harbinger of things to come, according to a profile years later in the Toronto Star. "His campaign slogans suggested some of the flair for self-promotion that would later become a trademark. 'Izzy clever? Izzy ever! Izzy Asper,' ran one slogan. 'Arts got a headache?' asked another. 'Get Asper-in.'"

Tax columnist

After graduating in 1957 with a Master's degree in law, Asper began practicing in Winnipeg as a specialist in taxation. He became a leading expert in the arcane world of estate planning, tax holidays, and corporate income lumping. He married his sweetheart, Ruth "Babs" Bernstein, and they started a family. David was born in 1958, followed by Gail in 1960, and finally by Leonard in 1964. As the holder of a graduate degree, Asper even found time to lecture at his alma mater. Soon, however, Asper's ambition and creativity strained against the constraints of his dull, gray area of law. He started writing a column on taxes for the Winnipeg Free Press, and his facility for turning complex and often boring issues into interesting reading was apparent. The Free Press was the flagship of FP Publications, which in the mid-1960s was Canada's largest newspaper chain. Soon Asper's column was syndicated in ten FP dailies across the country, including the Globe and Mail and the Vancouver Sun. Writing under the byline I.H. Asper, he did more than dispense advice and dissect regulations. He also commented on the wisdom of various tax provisions, often in language that reflected his libertarian influence. "The father of the present Canadian tax system wasn't Adam Smith, or John Maynard Keynes, or even John Galbraith," quipped Asper in 1971. "It was Robin Hood."

It took Karl Marx, the founder of communism, to set out the specifics of an ideal system for the Communist state. In the Communist Manifesto, Marx recommended a heavy progressive or graduated tax as an excellent method of transferring wealth from the aggressive rich to the non-aggressive masses. Canada has adopted the Marx tax system.

Pointing out that almost 70 percent of income tax was collected from only a quarter of taxpayers, Asper noted that the others had their government services subsidized. The political power of the majority, he reasoned, ensured that governments would continue to increase social services -- and taxes -- in order to get re-elected. "The present system is inconsistent with democratic principle," he argued, "in that the majority can legislate the taxes that will be paid by everybody but them." Luckily, there was a simple and fair solution to this problem, according to Asper. "A flat tax would do more than remove this danger," he wrote. "First, it would restore the incentive to work harder. Next, the middle and upper income group would have enough money left after taxes to acquire greater ownership of Canadian industry. . . . The brain drain might also be stopped. Also, the incentive to avoid taxes would be remarkably reduced."

The tax burden

The income tax system in Canada was the subject of heated debate in the late 1960s. A Royal Commission on Taxation headed by accountant Kenneth Carter reported in six volumes in 1966, finding that Canada's working poor paid more than their fair share of taxes while the wealthy exploited numerous loopholes. It proposed to tax income from the sale of assets, or "capital gains," the same as earned income. As Carter observed, "a buck is a buck." The proposed reforms would have increased the corporate tax burden in Canada by about 27 percent, noted Linda McQuaig. Opposition from the business community, however, killed most of them. A White Paper on taxation with proposals for legislation introduced by finance minister Edgar Benson in November of 1969 was a substantial retreat from Carter's reforms. Even its watered-down provisions, McQuaig noted, enraged many businessmen.

Leading the charge against shifting the tax burden onto the wealthy was Izzy Asper, who attacked the White Paper regularly in his column, in speeches, at legal conferences, and at Liberal party meetings. It was serendipity, however, that led Asper to author his seminal critique of Benson. He came down with mononucleosis and was bedridden for several months, which gave him the time and opportunity to write The Benson Iceberg. It turned out to be a best-seller. The title was a reference to Asper's theory that 90 percent of the White Paper's consequences were unseen. He claimed its provisions, if adopted, would "alter the Canadian social and economic order." Asper argued that the proposed tax changes were only a means to a larger end. "The end is the reshaping of society." The White Paper proposals, he pointed out, raised fundamental questions, including: "Should every Canadian be his brother's keeper, or just his helper?" Introduction of a capital gains tax, Asper argued, could have unforeseen consequences. In his tax practice, Asper said he had seen three projects cancelled in the months after the White Paper was introduced. "The investors concluded that in the light of the current tax proposals, the rewards for success, after taking into account the new taxes, would not be large enough to warrant the risk." Asper made his own position perfectly clear, in contrast to that of those he saw behind the movement for change.

I believe that the present and even greater social objectives can be furthered in a free enterprise economy in which private capital is maintained and is not dissipated through excessive estate taxation and capital taxation. The authors of the White Paper belong to the ever growing number of economists and academics who believe that money is more productive in the hands of government than in the private sector.

Legislation introduced in 1971, according to McQuaig, was "a pale version of the White Paper, itself a pale version of the Carter report. Business had won." Rather than shift the tax burden onto the rich, it left many of the loopholes intact. It even eliminated the estate tax that had been a significant check on the growing concentration of wealth in Canadian society. Only half of capital gains would be taxed, and capital losses would be tax deductible. The top tax bracket was lowered from 80 percent to 61.1 percent. Instead of reforming the income tax system to make it more fair to a majority of Canadians, the end result was almost exactly the opposite. "Under Finance Minister John Turner, the government introduced several new tax measures that greatly enriched corporate tax breaks," noted McQuaig. "By the time Turner quit the Cabinet in 1975, his new corporate tax breaks were saving companies close to $1 billion a year -- on top of the tax savings they were already enjoying before Turner's stint at Finance." By then, Asper was himself a Liberal politician, having assumed the leadership of the party's Manitoba branch in 1970.

Political career

Asper waged his campaign in the 1973 Manitoba election like an all-out war. Lloyd Axworthy, one of the party's few MLAs, noted his leader's zeal on the campaign trail. While most candidates would glad-hand captive voters waiting at bus stops, Asper took the opportunity for exposure to another level. "He would get on the bus, shake every hand and get off at the next stop and go back and do it again," Axworthy recalled. Asper's personal style, however, hurt the party's chances to finish anything better than third, according to Frances Russell. "Although they are fielding the best stable of candidates of all three parties," she noted in the Globe and Mail, "the outspokenness and greenness of their leader . . . has cost them credibility." Asper's opposition to a $3 billion hydroelectric project in northern Manitoba caused one of his candidates to resign and two more to run as independents. Despite being raised in small towns, Asper's image as a big-city lawyer also worked against him, as it reportedly demolished the party's base in rural Manitoba.

Asper's economic arguments were also steadily refuted by NDP premier Ed Schreyer. The Liberal leader pointed out that Manitoba had the highest rate of provincial income tax, at 42.5 percent of the federal rate. The premier countered by explaining that health care was heavily subsidized in Manitoba. Taken together, it had one of the lowest rates of provincial income tax and medicare premiums. Asper pointed to numerous examples of welfare being collected by able-bodied recipients. Schreyer produced figures that showed Manitoba had one of the lowest levels of employable welfare recipients in Canada, at 10.2 percent. According to the Globe and Mail, Schreyer took "particular delight in using every opportunity to demolish the personal credibility of Mr. Asper." The premier had taken a disliking early on to the Liberal leader, referring to him at one point as a "disgusting little shyster" with a "very big and quick mouth." Asper's daughter Gail came home from school crying one day because classmates were calling her an American. "Why were they calling her an American?" Asper recalled. "Because Schreyer had called me a Philadelphia lawyer." The assessment was prescient, as Asper would prove adept at exploiting legal technicalities, but not as a lawyer.

On election night, the NDP was returned to power with 31 seats for an increased majority while Asper's Liberals placed a distant third. They added one seat by winning five ridings, but they received only 19 percent of the popular vote. "The Liberal party got caught in a draft of polarization," Asper explained. "But we withstood the blizzard. We were not wiped out, as some predicted we would be." Asper finished in a virtual tie in the Winnipeg riding of Wolseley, being counted the winner by five votes on election night, then losing in a recount by one ballot. He retook the riding by three votes in a judicial recount a month later. The matter was not settled until September, when the Manitoba Court of Appeal upheld Asper's victory. It didn't take long, however, for Asper to realize he was not cut out for campaigning. He even admitted to a reporter that he basically hated politics. Years later, he would explain why to Peter C. Newman. "Everybody else wants to talk about paving Main Street," Asper said, "while I wanted to discuss climbing great political mountains." Another observer noted that Asper didn't quite fit the mold that was increasingly required of successful politicians. "His character, ironically, didn't suit the TV age," wrote John Stackhouse in 1990. "He talked too quickly for rural Manitobans, and his ideas, such as reducing provincial trade barriers, were too radical."

There was another barrier to Asper being elected, however, and like the proverbial elephant it went largely unacknowledged. The prejudice was noted briefly, however, in the Globe and Mail. "It's not one of the things that's mentioned on public platforms," wrote Egon Frech, "but, behind the scenes, one hears Liberal talk about the fact that Mr. Asper is a Jew, and a big-city lawyer to boot." Anti-Semitism was a fact of 1970s life in Winnipeg, noted Newman, where a small but vital Jewish community thrived. "Winnipegers knew only too well how to apply cold showers to douse the ambitions of upstart Jew boys," wrote Newman. Asper had experienced discrimination throughout his life and well understood the exclusions he faced. "It was just a given that Eaton's didn't hire Jews for summer jobs, and neither did the banks or insurance companies," he told Newman. "Local universities at the time had strict quotas, and there were no Jews allowed into the Manitoba Club." His older brother Aubrey, who went into teaching, recalled the prejudice they endured while growing up. "[It] included name calling -- 'dirty Jew,' and that kind of thing, references to our parents and to money, because we were in business." But while he learned to turn the other cheek, Aubrey said his younger brother never did. "Izzy was more combative than I was. He got into fights. He took the bait when he was baited. . . . He had a lot of nerve even then."

Asper called politics "a con" and stepped down as leader, later claiming he had been misunderstood. "Certainly I have learned that the profession of politics is the most noble, the most selfless and the most outstanding calling one can assume." The Free Press lauded Asper for having "rebuilt and rejuvenated lagging Liberal forces." Asper denied any interest in a group applying for a licence to operate a new television station in Winnipeg, the newspaper reported.

He declined to talk about his future, saying only he had received a number of offers for "very exciting possibilities." As for his reported connection with Canwest Broadcasting Ltd. of Winnipeg, which hopes to establish a third English-language television in the city. Mr. Asper said, "They are clients of mine -- that's it."

On Tuesday: Building CanWest into a media empire.