The Story Never Told

Annual Meeting June 1st, 2006

The complete story on how CFIB was created has never been told. My article on the CFIB website is accurate but leaves out the critical role my father played in creating a voice for small business. In honouring him to night, I honour all our members, because his values are your values and your values are CFIB values: Family, Employees, Customers and Country

My Father Father left Belfast in 1928 at age 20 to work in the wheat fields of Saskatchewan, following up on an offer by the Canadian government to pay his passage in lieu of one years service. But he had almost followed his friends to Rhodesia where they had joined the Rhodesian Mounted Police. Rhodesia, now Zimbabwe, was a critical part of CFIB history--a story never told.

Father went to work at Eatons in Winnipeg after his year on a farm outside Regina and then on to Toronto's new prestige Eaton's College street store. He had apprenticed in the woolen business in Belfast and had a passion for good woolens and clothing. That passion never left him during his lifetime. He started dating my mother who worked in the linen department. Mother was Jewish and father's boss, John David Eaton, in the context of 1930, said that 'if he married that girl he would never get promoted at Eatons'. He was deeply angered, of course, and vowed to leave Eatons and start his own business when he was 30. He and mother married secretly with my mother putting her wedding ring on a string around her neck where it could not be seen. These were the days of the great depression and once on pay day and completely out of cash, he had to borrow 10 cents from a neighbour to get to work. He started John Bulloch Limited in 1938. I was five years old, running about while my father and his neighbour were building the shelves that lasted for over 40 years.

Father saw the war coming in 1938 and borrowed $500 from his father to buy up all the gold braid he could get his hands on. He decided he would specialize in the manufacture and sale of officers' uniforms. A $200 credit given to officers by the Federal government to buy their uniforms wherever they chose really influenced his politics. It made his business possible since he could not get an operating loan from the bank. He took me to the camps on the weekend to take measurements and pick up credit vouchers. I proudly told my friends at school that I was helping my dad fight the war. He made 80% of all the officers' uniforms in the second World War.

No one could touch his value for $200. And those uniforms are in family trunks all across the nation. He pioneered the concept of editorial advertising where he mixed the sale of men's clothing with editorial comment on politics and religion. The readership of his ads on page two of the Globe and Mail was higher than the readership of the editorial page. He was the original fighter. I just followed in his footsteps. He was much loved by his staff even though he made heavy demands on them for quality and productivity. The unions used his wage and benefit levels to get better conditions for their members. He never laid anyone off and in bad times would live off his savings before he would ask for sacrifices from his staff. I went to the funeral of his forman when I was 12, and saw my father cry for the first time. I thought only mothers cried. All of my childhood is associated with working in the family business. It created my lifetime love affair with small business.

My first venture into public life was the creation of the Canadian Council for Fair Taxation. I was teaching Finance as a member of the staff of the Ryerson Polytechnic Institute, now a University, and reacted when the Benson White Paper on Tax Reform was introduced in November 1969. I did read it in the bathtub and a photo appeared of me in the bathtub on the cover of Weekend Magazine, an insert that went into half of all the dailies across Canada. It proposed to tax small business corporations at a rate of 50% when the effective tax rate for large corporations was 25%, after their capital incentives where applied--something which the government was not going to touch. Also a capital gains tax rate of 50% on top of succession duties and estate taxes was proposed that would severely inhibit accumulation of capital and succession in small firms. I placed a letter I had written to Finance Minister, Edgar Benson, in one of my father's ads and all hell broke loose.

Rallies held across Canada in all the major cities were held under the banner of the Canadian Council for Fair Taxation and drew enormous public support and media attention. This led to Trudeau announcing around June of 1970 that the White Paper was dead. We had killed about 80% of the proposals. A decision to create a permanent voice for small business was made in September 1970. I had to tell Ryerson then whether I was coming back to my teaching job at the end of the year. I also had to get out of my present location which was part of the offices of one of our key Board members. I did not own any furniture or other assets but had $50K in the Council bank account. As one would expect I had some interesting offers to enter politics. But with my father's support I decided instead to create a permanent voice for small firms under the existing Council umbrella, focusing on government spending and taxation. My father guaranteed the lease for the new location, and guaranteed a small operating loan from the Bank and, most importantly, pledged to protect my salary if I was short of cash.

For four months I renewed Council members under the newly widened umbrella. The first 1000 members I sold myself and about 200 are still in the membership today. There was no media announcement of the permanent objectives of the Council because I was already speaking on every business issue, and had the highest public profile in the country next to Prime Minister Trudeau. But putting any kind of value on my time, the system of membership sales was not workable. I was also being asked to comment on issues where I did not know with any certainty where the membership stood. I did, however master all the tricks of politics in dealing with the media and became a good quote. I learned to speak in 20 second clips using both word pictures and one-liners and answering your own questions rather than reporters questions. A strategic part of my national media strategy in those early days was made possible by an early supporter in B.C. and a later CFIB governor for 25 years, Bob Morrow. We partnered in our media work and had news stories crossing the country from both BC and from Toronto. This gave the media and the public the impression of a huge political machine.

Despite the high profile, building membership through rallies and telemarketing that worked in a crisis atmosphere of a tax protest was not going to work on a long-term basis. That is when I decided to create the Canadian Federation of Independent Business which would be based on two solid principals:

1. That the members would provide direction on public issues through the Mandate and other survey techniques, and
2. That we would create a permanent field force calling on every member once a year that would, besides the sales function, collect solid information on the members themselves and their priorities.

Today those two principals and the ongoing leadership of Catherine Swift are the reason why CFIB is twice the size of any comparable organization in the world. I created a national Board of Governors in early 1971 although the CFIB was not incorporated until August 1971. They were friends who had helped me organize Council Rallies across Canada and they allowed me to use their offices as CFIB virtual offices. So the image was of a powerful national organization. The reality was a family business financed with the help of my father that was soon to deplete its cash reserves and line of credit. What I thought would be viable after ten months took eighteen months, and the feelings of sheer terror associated with failure lived with me each day during that eight month period. Failure would have been a national news story.

Like most small business owners trying to create something new, you are a 'Jack of all Trades'. I took off the monthly trial balance, wrote Mandate questions and articles often working through the night at the Toronto Star library, and then sold memberships every Friday to pay my own income. And on top of all this, commenting to the media on every public issue, when half the time I did not really know what I was talking about. Mary and I used to come over to the office at night. She vacuumed the rugs and I cleaned the washrooms. To save the cost of an envelope, the first Mandate ballot, was designed to be something members could fold over and staple. How was I to know members would put close to ten staples on each ballot to ensure no one saw how they voted? This created the first big function at CFIB--taking the staples out of the ballots which were sprinkled over the floor of our offices. I can still hear the sound of staples being sucked up by Mary's vacuum cleaner.

My first insight into the dirty world of real politics, came early in 1972. It had a profound impact on the future of CFIB. In 1972, my father started a campaign in his editorial ads in support of the regime of Prime Minister Smith in Rhodesia. He thought Mugabee, one of the rebel leaders at the time and the anticipated future PM would destroy the country. This was not a racial issue with him, rather more about his love of the country through his many Rhodesian friendships. He dialogued with black Senators and black leaders in Rhodesia, Prime Minister Smith and his own network of Rhodesian-Canadian friends.

He called me one day to say the Globe and Mail under pressure from the government was cutting off his volume discount because his ads were in conflict with government policy. His ads would now cost $133K a year rather than $100K. I told my father that 90% of the politicians and the media thought we were the same person so that what they thought they were doing was exerting polical pressure on CFIB. He said that trying to cut off free speech was morally wrong. And when he said something was 'morally wrong' he was using a Belfast Code word 'to start a good fight'. Father proceeded to hire my PR consultant to write ads attacking the integrity of the Globe and Mail. The Globe after two months of this assault gave him back his volume discount.

It seemed obvious that if a Government will attempt to shut CFIB down so early in its history that we had better have an unassailable model for political action that would survive over the long-term. I decided that we would need to become opinion moulders so that the voice of small business would be something all Canadians could identify with; that we would have to be non-partisan, and stay away from government or corporate funding; and most importantly, we would have to be ruthless in building reserves so we could fight for keeps, if necessary.

I was quickly tested and shortly after was offered $500,000 to launch a fight on behalf of a group of major corporations against proposed changes to the Combines Investigation Act-now called the Competition Act. And we received an offer from the Government of Quebec to pay CFIB $10,000 and provide 1000 government suppliers as CFIB members. But, in return, the Premier's Office would be given the right to appoint one of its people to the CFIB Board.

The rest is history. And this year we celebrate our successes together over 35 years which in reality is 36 years. Father collapsed with an aneurysm at the clothing store in January 1980 at age 71. The staff put him on the cutting table and called me to take him to the hospital. He was conscious for only a short-time after his operation and signaled to me to let him write a note. He wrote, "Tell staff, jobs OK". He died the next day. Today, I honour him for the untold contribution he made to our history and in honouring him I honour his values, which are your values and CFIB values: Family, Employees, Customers and Country.

John F Bulloch Founder, CFIB .

Word Version