Lowe's' Stalking of RONA and the Failure of Canada's Political Institutions and Leaders to Defend Nation-Building
The U.S. giant corporation Lowe's began its campaign to seize RONA in 2012. Similar to other dominant companies in the retail sector, such as Walmart and the internet giant Amazon, Lowe's is not a company unto itself but a merged financial, industrial, commercial and real estate empire controlled by the financial oligarchy. The public rumblings of a Lowe's takeover of RONA began in earnest in July 2012 prior to a Quebec election. The noise of a U.S. takeover provoked a reaction in the mass media and amongst the cartel political parties vying for power. They all pronounced themselves in favour of "doing something" to block Lowe's takeover of RONA. The "doing something" was described in the media as "government-controlled or government-friendly financial institutions collectively but independently acquiring a blocking position in the shareholders' equity of 'strategic' companies."[1] Only a few years later in 2016, both the federal and Quebec governments and the "government-friendly financial institutions" that took an ownership position in RONA stock capitulated when Lowe's returned with an "offer they and the government of the day couldn't refuse." RONA was sold to Lowe's because without upholding principles of nation-building, pragmatism rules the day; this means those in control can find and propagate an excuse to capitulate to the power of the global financial oligarchy. Opposition parties in the Quebec National Assembly criticized the Liberal government of Phillip Couillard for allowing RONA's sale to Lowe's, with some members even predicting disaster for the regions. On the receiving end of particularly heavy abuse was Minister of the Economy Jacques Daoust, who had been President and Chief Executive of Investissement Québec (IQ) from 2008 to 2013 before entering the Liberal cartel party government as an elected member of the National Assembly in 2014. Under Daoust's direction, IQ acquired a 10 per cent stake in RONA so that -- presumably as a "government-controlled financial institution" -- it could help save RONA from a foreign takeover. However, when Lowe's offer to buy became real in 2016 the resistance caved in to pragmatism. IQ and the Liberal governments in both Ottawa and Quebec (including Jacques Daoust the Minister of the Economy) officially approved the sale.
Within two years following RONA's sale to Lowe's, the axe began to fall, described by financial analyst Yvan Allaire as, "pressure in the markets [on Lowe's CEO and Board] for lacklustre performance. Its Canadian operations [i.e., RONA] had become a drag on earnings. [...] Lowe's is listed on the New York Stock Exchange and thus must deliver on the only commitment that really counts: doing everything to maintain and drive up the price of its stock. At stake in that very real day-to-day drama are the jobs of its senior executives and the quantum of their compensation. Any hesitation or delay in taking all necessary measures to meet the shareholders' expectations will be severely and swiftly punished. That is the inexorable law of financial markets." One cannot help but comment that "at stake in that very real day-to-day drama are the jobs" of the men and women who work at RONA and the communities and local economies where the closures occur. Lowe's first wave of closures of RONA stores was announced just one month after the Coalition Avenir Québec cartel party government of François Legault took power in October 2018, with the second wave a year later for a total of 61 stores closed across Canada. The response of the CAQ in power has been quite different than when in opposition when it denounced the Liberal Party government for agreeing to the sale. The CAQ Minister of the Economy, Pierre Fitzgibbon, went so far as to blame Quebeckers for the closures, lamenting a weakening of their emotional attachment to the RONA brand since the Lowe's takeover. "There's a breakage of emotional connection between Quebeckers and RONA and I understand why," Fitzgibbon told reporters, saying he too prefers to shop at Quebec-owned stores. Fitzgibbon added that the CAQ government could do nothing because it was bound by a confidentiality agreement between Lowe's and the federal government, signed during the takeover in 2016. Some people working in RONA stores denounced Fitzgibbon for suggesting the closures were fine by him because he "prefers to shop at Quebec-owned stores." They pointed out that the workers suffering the layoffs are Quebeckers, and that the other big-box building supply store company in Quebec, Home Depot, is also not Quebec-owned.
CAQ Minister Fitzgibbon remarked that compliance
was not very
difficult: "Let's be realistic, this agreement is on a
page and a half. So the commitment on that page is kind of soft.
[...] My job is just to call the federal government to make sure
they enforce what they signed in 2016. But it's pretty soft." The impotence of the so-called liberal democratic institutions is on full display at all levels of government in this affair. The form and content of those institutions are incapable of defending the people, economy and nation-building from the ravages of the global financial oligarchy. Democratic renewal and empowerment of the people are the order of the day to defend the people's rights and interests and forge a new pro-social direction for the economy that favours the people. Note1. All quotes are from "Rona's tragedy in three acts: From Quebec's foreign takeover block, to deal with Lowe's, to store closures," Yvan Allaire, Financial Post, November 22, 2019. (With files from Radio-Canada, CBC News, CTV, Reuters, National Post.)
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The significance
of the takeover of RONA is found in the
revelation that local people and especially the working class
have no control over the direction of the economy. They do not have
control where profits go and are invested, where the commodities
a company sells are bought or sourced, how a company can be
renewed to better serve the economy and people, and fundamentally,
whether a company will live or die. Also revealed is the fact
that the people cannot find help from the so-called liberal
democratic institutions as they have proved in practice to be
impotent in the face of the attacks of the global financial
oligarchy and do its bidding.
Soon after RONA's
sale to Lowe's was announced and approved by
the Couillard government in 2016, Jacques Daoust resigned as
Minister of the Economy. Later in the year, he resigned from the
National Assembly and died suddenly in 2017 from a stroke. His
personal papers, made public after his death, reveal that in fact
he had been opposed all along to the RONA sale. According to
Daoust, Premier Couillard's Office concluded the sale
behind his back without his knowledge. In his memoir, he accuses
the Liberal government or more specifically the Premier's
Office of pressuring him, after the fact, to agree to the sale as
Minister of the Economy and then lie in public that he
participated in making the legal and political arrangements for
the sale and was in complete agreement.
Lowe's said the
closures are in compliance with the 2016
purchase agreement signed with the federal government. The
Trudeau government appears to agree and will not intervene. A
statement from the federal Ministry of Innovation, Science and
Economic Development says it closely monitors these commitments
"on an ongoing basis to ensure compliance."