At 37, George Gosbee is one of the young stars of the Alberta oil patch, part of the generation of investment bankers and CEOs who have risen to prominence in the post-National Energy Program era. Mr. Gosbee has been making headlines recently, buying back his investment banking firm, Tristone Capital Inc., from a Denver company that had acquired control in 2004. He is also a non-profit player with volunteer roles that include the chairman's post at the Alberta College of Art and Design (ACAD), whose growth plans include a potential downtown Calgary campus. On the phone from Tristone's Buenos Aires office, he talks about the Calgary that his generation is building.
Are you a native Calgarian?
Actually, I was born at Queen's University in Kingston, Ont., when my father was at school there. He was from Prince Edward Island. When I was a few months old, we drove out to Calgary so he could go to medical school.
How did you end up in investment banking?
I did feel a bit of a push to go into medicine. But when I was in grade school, I had a teacher who started talking about the stock market, and I became absolutely infatuated with it. And growing up in Calgary, a lot of our neighbours were in the oil and gas industry and talked about stocks.
Then I read some articles in high school by a guy named Rob Peters. At that time Peters & Co. was really the only energy advisory firm in Calgary. I became enamoured with what he was doing and tried really hard to get hired on with them. I wanted to work with Rob really bad, and after six rejections during high school and university, I finally got on.
Now you've got your own firm and you're one of Calgary's young bucks.
I get a kick out of being called a young buck because I've been in this business more than 15 years. In the investment banking business, a lot of people get so burned out. I think I have more experience than any of the 120 people in my firm.
Are you concerned that Calgary is still seen as being in the shadow of Toronto?
Who thinks that?
Torontonians, for one.
Well, they can think that all they want.
You can't deny that Bay Street has been running the country.
I don't know about that. Our Prime Minister is from here, and he runs the country.
But you are going to see Calgary take more of a lead. We have a great oil and gas business, but we are developing a phenomenal financial centre for the world.
Alberta is pretty soon going to be the size of two Kuwaits in terms of production and it's going to be hard to ignore from a global standpoint. Not too many cities have a real global centre for an industry and Calgary is one of them.
Are you one of those people who still get hot and bothered over
the National Energy Program?
I don't know if I get hot and bothered. It was a kick in the head to Alberta, but I don't think you will ever see it again.
But you were, what, 11 years old at the time?
I remember all that about what Petro-Canada stood for: "Pierre Elliott Trudeau ripping off Canada." I saw it growing up in Calgary. This younger generation was reminded that the dollar you earn today in this business may not be the same dollar that you earn tomorrow, and make sure you save it.
Just because we didn't have the experience in the stock market doesn't mean it's not part of what we need to know to understand the history of this basin. But I think it would be very difficult to duplicate what happened then.
A few people said that the change in the royalty trust taxation was close to what happened with the NEP. No it wasn't -- it didn't come close to what the NEP did. These trusts are still surviving. They'll just metamorphose into different entities over time.
Government wouldn't dare try something like that again?
You'll see ways in which the government is going to try to take a bigger grab, especially when you have what looks to be a huge windfall in profits. But the government should know we're not enjoying the huge margins any more because costs have shot up so high. Canada is the most expensive basin in the world to find oil and gas.
I think government is aware of what's happened. You'll see things like a tax on royalties in the oil sands and they'll do some things on the environment, but you won't see any windfall tax or any Chavez-ism like a national oil company being formed again.
But governments in Ottawa and Alberta are heading into an election year, and they want to be elected. They can't cut their costs, but they've got to try to increase their revenue a bit. It all points to the oil and gas sector. Something's coming, you can count on that.
Why did you get involved with ACAD?
I really like backing individuals with vision, in the same way I approach the oil and gas business. It's about management, management, management.
At a young age, I was doing all these different charities and causes, but they didn't get my full attention because there wasn't a dynamic personality whom I could go with. What's unique about ACAD is its president, Lance Carlson, who came up from the States with a long-term vision to take this school to another level.
But the words Calgary and arts don't go together.
You're right. There are not a lot of words that go together with Calgary other than oil and gas. That's where I think I can add. ACAD is a phenomenal institution but it's always been known as that arts school up on the hill.
If you're going to set something up in Calgary to bring the arts to another level, would you back a new venture or an existing institution that has had so much success? Lance saw in a heartbeat what the city was missing, and the potential to associate Calgary and the arts together in the same sentence.
But isn't it hard to get business people to support the arts?
This city went through so many ups and down. Even after 1999, the thinking was, 'When is oil going back to $10?' The young generation, including myself, saw what our parents and neighbours went through and we were not so eager to jump in and give.
Look at Toronto and Montreal. They have diversified sources of income and constant flows of income. There are not a lot of highs and lows apart from what interest rates did in the 1980s. It was a lot easier to budget for giving money to the arts.
I think Calgary has finally arrived there. We have a more consistent stream of revenue. We all have our houses in order. Alberta is debt free; the oil and gas companies have their houses in order, it's the same on the personal side. We don't have the monster debt and the interest burden. More and more, you can budget for giving back to communities.
But traditionally people have come to Alberta to make their money and then get out.
Those people who come for the short term aren't the executives who are creating the wealth. They're the people who weld the pipe, drive the trucks or work for Tim Hortons. They're waiting to make a few dollars and once the boom is over, they'll probably head home. But that's not what underpins the economy and spirit of Calgary.
Calgary is a great city in which to always have a home.
Are you an art collector?
I guess I am. It's my wife, Karen, who is the art history expert and interior designer. I love art but there is such a big scope. I'm having trouble focusing on something like a normal collector would.
It seems we have this collection that contains everything from older European works to contemporary pieces. I think I'm going to get a little more focused or I will drive my wife crazy.
In 10 years, will we see a vibrant cultural scene in Calgary?
Absolutely, we've got all kinds of great initiatives, from buildings to galleries, to public works projects. We're definitely headed in the right direction. And you know, there is nowhere to go but up from here. We've got a bit of catch-up to do but there is a willingness and capital to do it.
George Gosbee
Title: President, chairman and CEO,
Tristone Capital Inc., Calgary
Born: Kingston, Ont., 1969
Education: Bachelor of Commerce,
University of Calgary, 1991
Career highlights:
Joined Peters & Co. Ltd. out of university
Spent three years with Newcrest Capital Inc.
2000: Founded Tristone
2004: Sold controlling stake
to Petroleum Place Inc. for reported $101-million
2007: Buys back Tristone control