Michael Sabia will be the next CEO of Hydro-Québec. The man who led the Caisse de dépôt et placement du Québec, and launched the ambitious Réseau express métropolitain project, will succeed Sophie Brochu, who left her post two years before the end of her mandate, a few months after expressing her disagreement. with the orientations of the Legault government.
About two months ago, Mr. Sabia had been approached by François Legault’s chief of staff, Martin Koskinen, for this key position. He had spontaneously accepted, but set one condition: having become, at the end of 2020, Deputy Minister of Finance in Ottawa, he wanted to remain in office until the tabling of Chrystia Freeland’s budget in the Commons. This budget was tabled at the end of March.
During this time, the cabinet of François Legault always maintained that the choice of the CEO of Hydro-Québec was not stopped. Mme Brochu left his position on April 11 and the interim has since been taken over by Pierre Despars, until then Executive Vice-President, Strategies and Development. Last week, the minister responsible for the Crown corporation, Pierre Fitzgibbon, finally declared that the government had found the rare pearl, and that it would be announced shortly. His appointment should be endorsed by the Council of Ministers before the end of May.
Michael Sabia is the choice of François Legault, we confide to The Press. He has already said publicly that “when you want change, you choose strong people”. Mr. Legault paid a heartfelt tribute to the boss of the Caisse in November 2019, when he announced his unexpected departure, without notice, from the Prime Minister’s office. Ironically, during the 2012 election campaign, the leader of the Coalition avenir Québec had promised that once elected, he would have a good discussion with the president of the Caisse, and that the latter would find this meeting “difficult”. Mr. Legault found that Mr. Sabia, like Thierry Vandal, then CEO of Hydro-Quebec, was not sufficiently nationalist, did not make enough efforts to stimulate the Quebec economy.
An unknown: what will be his relationship with the influential minister Fitzgibbon? The latter sat on the board of directors of the fund from 2009 to 2012, under Sabia. At the Caisse, Mr. Sabia has forged a reputation as a boss with a very sanguine temperament, likely to cause memorable tantrums. The Minister of Health, Christian Dubé, knows him well; before returning to politics, Mr. Dubé had been vice-president of the Caisse under Michael Sabia.
Originally from Ontario, Michael Sabia will be 70 years old in September. His career in the senior federal and Quebec public service as well as in the business sector has aroused both tributes and criticism. During the 1980s and 1990s, he rose through the ranks to become the right-hand man of Paul Tellier, the first federal civil servant, Clerk of the Privy Council. It is to him, in the government of Brian Mulroney, that one entrusts the politically explosive file of the installation of the tax on the goods and services, the GST.
Having become the boss of Canadian National (CN), Paul Tellier brings Michael Sabia with him. He will play an important role in the privatization of the carrier. The company was losing $1 billion a year at the time. Mr. Sabia will also play a key role in the success of privatization. In 1999, Mr. Sabia left CN to move to BCE, he first took control of Bell Canada International. The techno bubble burst in 2000, BCE is seriously in troubled waters Jean Monty leaves in 2002, his post is split. Mr. Sabia will become CEO. It is selling assets and cutting 8,000 jobs in an attempt to return to profitability, but not fast enough to the liking of the main shareholder, Teachers’, the Ontario teachers’ pension fund. Michael Sabia then left BCE in 2008.
In March 2009, the Charest government appointed Mr. Sabia boss of the Caisse de depot et placement du Québec (CDPQ), a ten-year term, a choice that triggered a torrent of criticism. Mi. Sabia is then seen as a federal mandarin, without Quebec roots, from the conservative seraglio from which Jean Charest himself emerged. Before his arrival in 2008, the CDPQ had experienced dark times; the financial crisis and bad investments in commercial papers had resulted in a negative return of 25% for the woolen stocking of Quebecers.
Bernard Drainville, big gun of the PQ opposition under Pauline Marois, demands his head insistently. Once in power, Mr.me Marois and Mr. Drainville will be much more conciliatory with the former federal mandarin. In 2017, under the government of Philippe Couillard, it was announced that the mandate of Michael Sabia was renewed, two years before its end.
It is extended until 2021, but it leaves more quickly, in the fall of 2019, after having initiated the huge project of the Metropolitan Express Network; for the first time, the Caisse became the operator and not strictly the financier of a project. The problems that the project is currently experiencing risk tarnishing the image of the new Hydro boss.
Under his rule, the CDPQ significantly increased its participation in foreign markets, going from 36% when he arrived in 2009 to 64% when he left, 11 years later.
When he left the Caisse, François Legault had praised this “excellent manager” who had obtained “good returns” at the Caisse during his mandate. When he arrived at the Caisse, after the financial crisis of 2008, Mr. Sabia announced that his salary would be frozen until the returns were there. When he left the CDPQ, his salary was 3.9 million per year. When he arrived at the Caisse, he had also renounced a pension plan – the rules of Retraite Québec still required the payment of a pension of $29,000 per year. Since 2008, Mr. Sabia has received an annuity of nearly $1 million per year for his time at Bell Canada.
Who is Michael Sabia?
- Michael Sabia distinguished himself in the difficult missions. A senior finance official in Ottawa, he was the driving force behind the implementation of the GST.
- He played a central role in a complicated reform, the transition to the private sector of Canadian National, in 1999.
- He landed at BCE just before the bursting of the technology bubble in 2000. As boss, he made difficult cuts, which did not satisfy shareholders.
- After the commercial paper crisis, he took control of the Caisse de depot, which had just received a negative return of 25%. Under his leadership, the fund’s assets grew from $120 billion to $326 billion, and he launched the Réseau express de Montréal project.