Former federal cabinet minister, Navdeep Bains.Andrej Ivanov/The Globe and Mail
Bay Street has nabbed another former federal cabinet minister, with Canadian Imperial Bank of Commerce hiring Navdeep Bains as a vice-chair in its investment banking division.
Mr. Bains, who was first elected as a member of Parliament in 2004 and became a cabinet minister after Prime Minister Justin Trudeau won a majority government in 2015, most recently served as minister of innovation, science and industry. He announced in January that he would not run for re-election and stepped down from cabinet at the same time, but remained an MP.
The hiring announced Monday follows that of another former federal cabinet minister, only from the opposite side of the aisle. Lisa Raitt, who had multiple cabinet portfolios under prime minister Stephen Harper, also joined CIBC in the same role in January, 2020, and will work alongside Mr. Bains.
The bank, and Bay Street at large, have a history of embracing former politicians. In 2010, CIBC hired Jim Prentice, the late former federal cabinet minister, and, until this spring, former deputy prime minister John Manley chaired its board of directors. Other notable hires across Bay Street in years past include former premier Frank McKenna, who joined Toronto-Dominion Bank , and Brian Tobin – the former premier and federal cabinet minister – joining Bank of Montreal . They all follow former federal cabinet minister Ed Lumley, who joined BMO in the early 1990s.
But the trend is increasingly evident in recent years. In 2018, TD Securities, the investment banking arm of TD, hired former federal cabinet minister Rona Ambrose as deputy chair. A year later, BMO hired former federal cabinet minister Scott Brison as a vice-chair in its investment banking division, BMO Nesbitt Burns.
While the title “vice-chair” sounds high-ranking, it is thrown around quite loosely on Bay Street, and is used for many different situations, say bankers who spoke with The Globe and Mail.
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Sometimes veteran bankers who are quietly asked to consider retirement are moved from managing director to vice-chair as a gentle nudge out the door. In other cases, vice-chairs can be rainmakers whose expertise spans multiple industries – whereas many senior bankers focus on a single sector.
The Globe is not identifying the banking sources as they are not authorized to speak publicly on this issue.
The vice-chair role is also often broad enough that its duties can be negotiated between the politician and the bank.
At some banks, the hope is that the former politicians will offer a fresh perspective when considering potential deals. While Bay Street and Ottawa are both power centres in their own respects, politicians and bankers are ultimately responsible to different constituents – and their mindsets rarely overlap.
In 2010, bankers were salivating over the potential fees to be earned from BHP Billiton Ltd.’s $38-billion hostile takeover bid for Potash Corp. of Saskatchewan Inc. Former Saskatchewan premier Brad Wall, meanwhile, opposed the deal at the time, even though he headed the conservative-leaning Saskatchewan Party. Mr. Wall is now a special adviser at corporate law firm Osler, Hoskin & Harcourt LLP.
Former politicians also carry some clout – enough to open doors with clients. A chief executive or head of corporate development may not return a banker’s call, but they may be more willing to take a meeting with a former Ottawa power player.
While the vice-chair role can sound cushy, bankers who have worked with former politicians say being successful at it takes some work. There tends to be a honeymoon period after the politicians join, but bankers can be sharks, and after a year or two, they start to ask what exactly the high-paid former politician is bringing to the table.
Investment bankers can also be reluctant to bring someone new along to client meetings. They are paid based on what deals they deliver, and some may not want to share those fees.
Editor’s note: An earlier version of this story incorrectly stated that Scott Brison was federal finance minister. This version has been corrected.
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Tim Kiladze