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Rebecca MacDonald’s long list of honours includes being named Canada’s top woman CEO for six years in a row (Clay Stang)
Rebecca MacDonald’s long list of honours includes being named Canada’s top woman CEO for six years in a row (Clay Stang)

Rebecca MacDonald’s Just Energy: Golden era over for gas marketer Add to ...

For Rebecca MacDonald, there’s no better proof that she has reached the highest echelon of Canadian business than her sprawling mansion in the Bridle Path. Here, in Toronto’s—and Canada's—toniest neighbourhood, she hosts charitable events attended by corporate royalty like Bata shoe empress Sonja Bata, philanthropist Suzanne Rogers, Tim Hortons co-founder Ron Joyce, and no-identification-needed figures like Belinda Stronach and Kevin O’Leary. Last fall, she even hosted real royalty: Prince Edward and his wife, the Countess of Wessex.

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The founder and executive chair of Just Energy Group Inc., an energy marketing company that recorded sales of nearly $3 billion in fiscal 2012, MacDonald is one of Canada’s wealthiest women—and an exemplar of the immigrant-done-good story. Profit magazine named MacDonald, 59, Canada’s top woman CEO every year from 2003 through 2008; her other honours include an Ontario Entrepreneur of the Year award from Ernst & Young and the International Horatio Alger Award. “She’s probably the smartest businessperson I know,” says James McKelvie, a former CFO of her company and the current chair of Benecaid Health Benefit Solutions Inc.

Those smarts are sales smarts above all, and MacDonald has applied them on three fronts—to a life story eagerly received by the media and the business community; to a business model that she helped pioneer; and to persuading investors to back her. She credits her success to her late husband, Pearson MacDonald. “He taught me the most important lesson—it’s all about sales,” she has said. “You could have the best idea but if you don’t sell it, you’ll never get ahead.”

But between a sales pitch and the actual goods there is always some leeway, and, for MacDonald, that gap is widening in all three areas. Once a darling among investors and Bay Street’s stock pickers for its rich returns, Just Energy is turning radioactive: Staggering under $1 billion of debt, it has chopped its dividend and seen its share price decline from a high of almost $14 last year to around $6.50 as of early May. As for the business model, Just Energy is accused of unethical sales practices and airbrushing its financial situation. The two fronts are converging in the view of forensic accountant Al Rosen. “They are paying dividends while running huge deficits and huge liabilities,” he says. “A lot of people are now pulling out.”

And even the personal story of Rebecca MacDonald herself now seems to not be exactly as advertised.

When Report on Business magazine asked MacDonald for an interview, she declined. But she’s told her life story many times, including for a 2006 cover story for this magazine.

She was born Ubavka Mitic in the former Yugoslavia, in what’s now Serbia. In her history as she’s recounted it when being interviewed by the media or when she’s received an honour, it goes as follows. Her father rose from humble origins to become energy minister in the regime of Yugoslavian dictator Marshal Tito. The minister often took young Ubavka on working trips. “I grew up with energy—coal, hydro, nukes, oil and gas,” MacDonald said. “As a child it was ingrained that the most important thing was energy.” But there were parental pressures too. Her mother pushed her to train for a career as a concert pianist—and then pushed her to go to medical school. “I had no life,” MacDonald said. “I didn’t have a childhood. I didn’t have friends. I didn’t play.” She had just completed her courses at age 22 when she snapped under the pressure, deciding to escape the country and “my own personal Communism” without telling her parents.

After arriving in Canada in 1974—with no English, no money and no job—MacDonald was stunned to learn that her medical schooling was worthless. She learned English, got a clerical job and met Pearson MacDonald, who was a door-to-door salesman. Through him, she learned how to be a salesperson, even briefly trying to be an Avon lady. “It’s the most difficult form of selling, but the most cost-effective,” MacDonald said.

After that early period, the record becomes more clear-cut. MacDonald’s career-making opportunity arrived thanks to Ontario’s decision to deregulate its natural gas industry in 1986. Utilities had long been monopolies controlling both supply and delivery of gas; deregulation was designed to introduce competition by allowing anyone to sell gas to consumers so long as they could secure a supply. Into this field alighted a new kind of company—energy commodity brokers.

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