Succession planning is tough for any business, but try doing it with billions at stake and tens of thousands of jobs on the line. While young entrepreneurs are starting to supplant established names on the list of Canada’s Richest People, the average age of Canada’s wealthiest is creeping up. Sooner or later, new generations will gain control of these fortunes, and the companies that created them.
The transfer of wealth from one generation to the next is already starting to accelerate. In February, Global Group founder Saul Feldberg handed over leadership of the company he founded in 1966 to his son Joel. By all accounts, it was a smooth transition more than a decade in the making. Joel joined the firm in 2002 to learn the ropes, and only after spending some time as an associate at Toronto law firm of Osler, Hoskin & Harcourt where he specialized in mergers and acquisitions.
Joseph and Ted Burnett, who made most of their money in real estate, are now doing what many retirees do at their age: converting their portfolio to fixed income—granted, at $2.9 billion, it’s on a much larger scale than the average family’s.
Meanwhile, control of H.Y. Louie Co., which owns London Drugs among other operations, is transferring to yet another generation of its founding family. Brandt Louie is pulling back from the day-to-day business of the firm his grandfather founded 112 years ago, entrusting operations to his two sons, Stuart and Greg. The brothers are already asserting their influence by divesting the family’s luxury jet business.
In the past few years, we’ve witnessed other handovers: Paul Desmarais’s sons took over his $6.1 billion estate, which includes Power Corp., following his death in 2013 at age 86. Similarly, Danna Azrieli now controls the estate of her father, David Azrieli, the Israeli-Canadian billionaire who made a name for himself in real estate, and who died in 2014.
Not all transitions are so orderly. The bitterness between various members of the Latner family is one that’s been well documented, with adult family members filing lawsuits against each other in the same way teenagers might tussle over the TV remote. Albert Latner, the family patriarch who amassed a fortune in the construction business, died earlier this year, meaning that after years of bickering, the family will have to settle matters on their own.
Among these families alone, there is more than $16 billion shifting from one generation to the next. And as the age of the Rich 100 creeps ever higher, more of the wealthiest families in Canada will be forced to confront this challenge head-on. Even the mega-rich can’t stop the clock.