One of Power Corporation’s most significant investments in the 1950s was in Shawinigan Water and Power Co. Here, an internal view of one of Shawinigan’s hydro-electric plants, circa 1917.

One of Power Corporation’s most significant investments in the 1950s was in Shawinigan Water and Power Co. Here, an internal view of one of Shawinigan’s hydro-electric plants, circa 1917.

Effecting a Transformation

During the 1950s, Power Corporation continued to take minority positions in power companies across Canada. Most importantly, it bought shares in Shawinigan Water and Power Company, one of the largest privately owned hydroelectric producers in the world, with massive installations in Québec. Meanwhile, its successful engineering and construction divisions were engaged in designing and building innovative power projects from British Columbia to Newfoundland.

The 1960s brought dramatic change. It was forced on Power Corporation when governments in Canada’s provinces, including Québec, pushed ahead to nationalize the hydroelectric industry as an essential public service. Between 1962 and 1964, in fact, more than 80 per cent of the value of the Corporation’s portfolio was liquidated.

Now in the hands of the founders’ sons, A. Deane Nesbitt and Peter N. Thomson, Power Corporation needed a new strategy: they thus began a process of developing larger interests in more diversified companies in energy, finance, industry, and real estate.

The 1950s saw substantial change as well as substantial growth, which set the pattern for even more dramatic change in the decades to follow. For a time, Power Corporation continued to invest in power companies, taking minority positions in International Utilities in Alberta, United Towns Electric in Newfoundland, Winnipeg & Central Gas in Manitoba, and Brazilian Traction, Light and Power, a Canadian holding company with utility subsidiaries in Brazil. Most importantly, it bought shares in Shawinigan Water and Power Company, one of the largest privately owned hydroelectric producers in the world with massive installations in Québec. Power further increased its position in Shawinigan Water and Power in 1957 when it exchanged its control holding of Southern Canada Power for a special class of Shawinigan Water and Power common shares. Meanwhile, its successful engineering and construction divisions were engaged in building new power projects from British Columbia to Newfoundland.

But the financial settlement obtained by Foreign Power Securities from the French government after years of negotiation, followed by the takeover of Winnipeg Electric by the government-controlled Manitoba Hydro-Electric Board in 1953, gave Power Corporation the cash – and no doubt the incentive – to diversify its portfolio. There were fewer opportunities, and even less reason, to augment its hydroelectric holdings.

By 1952, Power had already made substantial investments in other sources of energy (Canadian Oil Companies, Anglo-Canadian Oil), finance (The Royal Bank of Canada), pulp and paper (Bathurst Power and Paper), and industry (Canadian Celanese), often by picking up shares in companies underwritten by Nesbitt, Thomson and Company.

By June 1955, following its takeover of Anglo-Canadian Oil, Canadian Oil Companies surpassed each of the big hydroelectric affiliates as the single most valuable holding, valued at $11 million in Power’s $64 million investment portfolio. Since its incorporation in 1908, Canadian Oil Companies had developed into the only fully integrated oil company owned in Canada, with producing wells in Alberta, a modern refinery in Ontario, a lubricants plant in Québec, and thousands of “White Rose” gas stations across the country, as well as a financial interest in Interprovincial Pipe Line.


In the early 1950s Power Corporation made substantial investments in Canadian Oil Companies Limited, which operated thousands of White Rose gasoline outlets throughout Canada.

A New Generation Takes Over

The winds of change only blew more strongly with the deaths of A.J. Nesbitt in 1954 and P.A. Thomson in 1956. They were succeeded as President in turn by their sons, A. Deane Nesbitt and Peter N. Thomson, who accelerated the diversification into new companies, including Trans-Canada Pipe Lines, Quebec Natural Gas, Imperial Investment Corporation, and Dominion Dairies Ltd.

List of Officers and Directors

A. Deane Nesbitt

A. Deane Nesbitt

Peter N. Thomson

Peter N. Thomson

By 1960, although it was still looked upon as a company primarily interested in electrical energy, only 39 per cent of the market value of Power’s $74 million portfolio remained in hydro power and utilities. Oil, gas, and pipelines accounted for 33 per cent, finance for 11 per cent, pulp and paper for 10 per cent, leaving just 7 per cent in other investments.

The next few years saw even greater, more dramatic changes, mostly precipitated by external circumstances. In 1961, the government of British Columbia expropriated the principal assets of British Columbia Power, paying Power Corporation some $8 million in compensation. It later bought Power’s position in East Kootenay Power as well. In 1962, Royal Dutch Shell made a takeover bid for Canadian Oil Companies and subsequently paid cash and shares worth an estimated $41 million for Power’s holding. Then, in May 1963, the government of Québec, through the Quebec Hydro-Electric Commission, paid more than $19 million in cash for Power’s shares of Shawinigan Water and Power and Canada Northern Power’s Québec subsidiary.

Between 1962 and 1964, more than 80 per cent of the value of Power Corporation’s portfolio was liquidated.

Maurice Strong joined Power Corporation in 1954 and went on to become the first Executive Director of the United Nation’s Environment Programme.

Faced with such unprecedented opportunities and challenges, Peter N. Thomson took over as Chairman and President in 1962, while A. Deane Nesbitt returned to his full time duties at Nesbitt Thomson as President and CEO, a position he had held since 1954. As his first order of business, Peter Thomson hired Maurice F. Strong, an energetic young analyst from Winnipeg, to be his Executive Vice-President. Together with the board, they forged a new corporate strategy for Power Corporation. Buoyed by the Corporation’s cash position, they began to purchase larger interests in more diversified companies. At the same time, in order to protect and foster those investments, Power sought a more active role in monitoring the management and direction of the companies in its portfolio.


Photo of the Canada Steamship Lines and Power Corporation head office, circa 1970

Using Cash Proceeds To Diversify

Having already disposed of some smaller holdings, such as Dominion Dairies and United Towns Electric, Power moved quickly to reconfigure itself. In 1963 alone, it acquired 30 per cent of Canadian Industrial Gas, increased its participation in Greater Winnipeg Gas and Laurentide Financial (formerly Imperial Investments), bought major positions in Canada Steamship Lines and P. Lawson Travel, exchanged its shares of Canadian Celanese for shares of Chemcell and then purchased additional shares worth $12 million, and went after 100 per cent of Shawinigan Industries, which held the non-utility assets of Shawinigan Water and Power and which was itself sitting at the time on more than $27 million in cash. Some of that money was promptly invested in Canadian Interurban Properties, which became Power’s realty arm, and McIntyre-Porcupine Mines.

Power Corporation’s common shares, which were trading at $87.50, were split on a ten-for-one basis early in the year 1963.
A. Frank Knowles

A. Frank Knowles, circa 1980s, joined Power Corporation from Shawinigan Industries in 1964. He served as President of Power Corporation from 1986 to 1991.

In 1964, Power raised more than $69 million by disposing of its shares in Shell, Trans-Canada Pipe Lines, and various assets of Shawinigan Industries. Several Shawinigan Industries’ employees would move to Power’s head office; most notably A. Frank Knowles, an accountant and financial officer who would ultimately rise to be the Corporation’s President from 1986 to 1991.

A year later, Power sold all or part of more than a dozen other companies, including Northern British Columbia Power, Quebec Natural Gas, and Chemcell. Though the number of companies making up over 90 per cent of Power’s portfolio dropped from 31 in 1962 to 18 just three years later, the Corporation wasn’t averse to moving into some new companies or even some new fields. Among them were Consolidated Paper, Congoleum-Nairn and Dominion Glass, Roy West Banking and Yorkshire Financial, Motels of Australia and North American Recreation Industries, the ranching company Liverpool Plains, Québec Télémédia, and Northern and Central Gas.

The period was as profitable as it was active. From 1962 to 1963, the market value of the Corporation’s investments rose from $82 million to more than $120 million, less than nine per cent of which was represented by power utilities.

And by the time Maurice Strong departed in 1966 to become Director-General of the Canadian government’s external aid program and William Turner took over as President, Power Corporation had established new records, with $214 million in assets, $7.7 million in income, and payment of $2.6 million in dividends to its common shareholders. At the end of 1967, the market capitalization of its common shares stood at $51 million.

List of Officers and Directors



The Board of Directors of Power Corporation in 1966. From left to right are A.D. Nesbitt, President, Nesbitt, Thomson and Company; A. Simard, Q.C., Chairman, Marine Industries Limited; W.E. McLaughlin, Chairman and President, The Royal Bank of Canada; D.E. Kerlin, President, Montreal Trust Company; W.I.M. Turner, Jr., President of the Corporation; W.G.E. Lannaman, C.A., Secretary of the Corporation; P.N. Thomson, Chairman of the Corporation; M.F. Strong, former president of the Corporation; W.A. Arbuckle, C.A., Chairman of the Canadian Board, Standard Life Assurance Company; R.L. Weldon, Chairman, Bathurst Paper Limited; and J.B. Woodyatt, Honorary Director. Not present when this photograph was taken: H. Butcher III, Chairman, International Utilities Corporation; J.E.L. Duquet, Q.C., Senior Partner, Duquet, MacKay, Weldon, Bronstetter, Wills & Johnson; and R.R. Moodie, Honorary Director.

Global Downturn Creates Challenges

Very quickly, however, the picture was not quite so bright. Largely as a result of the expansive fiscal policy of the United States, inflation, interest rates, and government deficits rose, precipitating a plunge in stock prices, the collapse of high-flying speculators, and a severe downturn in the North American economy. A number of Power Corporation’s major holdings were beset by difficulties, some due to the deteriorating conditions, some of their own making.

Consolidated-Bathurst, which had been created in 1966 from a merger of Power’s two largest pulp and paper investments, plunged in value as a result of problems afflicting the entire Canadian industry, including weak global markets and overcapacity, coupled with rising operating costs. Dominion Glass, a glass container manufacturer, was in a decline. Canada Steamship Lines, a transportation and shipbuilding conglomerate, was buffeted by labour disputes in its shipping operations. Inspiration Limited, Power’s construction subsidiary, was negatively affected by a slowdown in the industry and losses associated with two large contracts. And while Laurentide Financial seemed poised to recover from the crisis of confidence that had damaged Canada’s consumer finance industry in the mid-1960s in the wake of the collapse of Atlantic Acceptance Company, it was still in no position to pay a dividend on its preferred and common shares. Power’s sharp decline in earnings was only offset by the profitable sale of assets, including its entire stake in Congoleum-Nairn, a manufacturing company, and shares of Royal Bank, British Newfoundland Corporation, and International Utilities.

Consolidated-Bathurst logo

Scroll To Top