Peter Gilgan is Canada's largest home builder. His company, Mattamy Homes, is one of the most recognizable brands in the industry. Over the past 32 years, Mattamy has built 47,000 houses, putting its stamp on communities from Ottawa to Calgary, and Phoenix to Charlotte, N.C. Mr. Gilgan, who did not go to university, trained as a chartered accountant, but was lured away by a passion for making houses and making money. He was recently honoured by Wilfrid Laurier University's business school as its outstanding business leader.
Do you regret not having a university education?
I've never stopped learning. I found the rate at which I was educated in school was not quite fast enough – if the subject interested me. If it didn't interest me, it was really too slow – you were bored to death. And I had a preference to get out and start making money.
Where does the entrepreneurial drive come from?
Mom's pretty driven – not to say my father wasn't. My dad worked at the Canadian Standards Association. He had the ambition, but he would just step back from the cliff. I recall a family meeting, when Dad was going to buy a big car wash at one point – become a car wash millionaire. He backed away from that. Another time, he wanted to start building houses. The guys who had built the house we moved into had done such a lousy job, he felt it wasn't right.
He was always a hands-on guy and, when he passed away, I asked my mom for his tools. Not that I am very good with them, but they bring back fond memories as a little kid.
So what was your motivation to get into business?
Some of us are just a little bit bent that way. It's a combination of inquisitiveness and a passion for something. In my case, it happens to be architecture. I might see a community we've built where the designs look nice relative to costs and so forth, and in its detailing, colour schemes, how the community flows. For me, it looks like a work of art, and that gets my juices going.
Good architects have such creative minds. I am not wired that way, but I appreciate the outcome. I like to think of myself as the conductor. I don't write the music and I don't play the instruments, but I try to bring it all together and make it sound nice.
What was your darkest hour?
The 1989 housing recession seemed like it was never going to end. You learn a ton from that, sharing the pain as well as the gain. You go back through your whole supply chain and look for ways to get everything shaved down to the bone.
That is where the chartered accounting thing comes in. I understood cash flow, credit risk and creditworthiness from a banker's perspective, not just my own. I can't tell you how many times I put on those CA glasses and looked at the business through them.
Is there something more recent?
A year ago, I was faced with the prospect of round two of layoffs. I don't need any more money; I've got all the cars I can drive, all the shoes I can wear, all the wine I can drink. But I promised a lot of people careers, not just jobs. The only thing standing in the way of keeping that promise was not the economy – it was government [in Ontario.]I could not get approvals to develop and go forward on land we should have had approvals on. Or municipalities decided they needed a whole lot more money at a time when we needed to reduce our costs by 15 per cent. They were looking for 25-per-cent increases and so forth in development fees.
I had to put many projects on the shelf. I had to lay off people.
But didn't municipalities feel developers in Ontario were getting a free ride?
We've always taken the position that we will pay our full and fair share, but we need government to work responsibly and transparently with us. It's kind of a moral issue to me. When someone slings mud at me and my company that is so undeserved – that is dark. The tide is turning again now. But the idea that we were getting a free ride doesn't stand the test of accounting. That's a nice statement to make. Back it up. I haven't seen anybody back it up yet.
You're in Arizona. Is that tough in this economy?
We have a small presence in Arizona. We're hoping to break even this year. It was not so good last year but it will be good again. I didn't buy land in Milton, Ont., when the market came back in 1993. I bought it before. There is a contrarian view, if you're willing to take it and take it wisely.
We're also in four eastern U.S. cities. We've lost money like every other home builder. The one city holding up in the first year of the downturn was Charlotte, but it is now suffering because of the banking crisis. All of a sudden, it's awash in inventory and some of the other markets are firming up.
Do you regret going into the U.S.?
Timing could have been better, but the one good thing about bruising your knuckles is you “learn good” that way.
You are also building homes now in Alberta. How does that compare?
I really enjoy the co-operative spirit of government, which sees business as someone to be aligned with instead of someone to be stopped. It's a refreshing change from what feels like a fairly strong attitude here in Ontario. It's invigorating.
But isn't Calgary a volatile market?
I'm not a boom rider. I hate booms. They create all sorts of unsustainable expectations on the part of everybody feeding into or off the industry. It produces discord all through. We would not go into a market because it is hot this year. I like to take a 20-year view of a marketplace.
What's left for you to do?
To be the best home-building brand in North America. That's my “BHAG” – the big, hairy, audacious goal. We wrote down that commitment eight years ago and a BHAG typically takes 20 years to do it.
What do you do when you're not working?
This morning, I was out on a bike. I'm in better shape now than when I was 40. I did one thing before I was 40 – I worked.
So, at 40, I said, “I want to live another 40-plus years, not another 20, thank you.” It was time to pay attention to some stuff. So I gave up the stogies, and started to look after myself. My sport passions are cycling, skiing – both downhill and cross country – snowshoeing [and]adventure racing.
But I'd actually like to find something else to focus on, sort of one night a week, and I haven't nailed it yet. It's something non-physical but more spiritual.
I have a lot of philanthropy going on, arguably too much, putting my name on buildings and that sort of thing. I need something more grassroots.
I don't know what it is exactly, but I'll know it when I see it. I know there is something missing.Report Typo/Error