Fednav goes to space

Federal Power in Deception Bay, picture by Martin Leduc
Mark Pathy from his LinkedIn profile

I have long been interested in the links between money, “hard work”, and power in Canada, so when I stumbled upon a story of a person paying an astronomical amount of money to be one of those space tourists, my interest was aroused. A “philanthropist” going to space has certainly been a weird trend of late, where the only thing more out there than space, is the egocentricity. This is brought home while I am driving east Hastings Street, in Downtown Vancouver, past the countless destitute to get to my ship; a ship whose owner, like many of them, seem to think that sailors, are generally a waste of skin.  

This upcoming space tourist was non-other than former shipping executive, director, and major shareholder of Canada’s Fednav, Mr. Mark Pathy. Now Chairman of Stingray (music), Mission Specialist 1 Mark Pathy, is expected to depart earth on February 21st, 2022, from Cape Canaveral, onboard a Space X Falcon 9 rocket, chartered to Axiom Space, that company’s first “mission“.

“Canadian” ?

Fednav is a family owned shipping empire, operating about 120 ships, based in Montreal, Canada, operating in all ports across Canada, even the most remote ones. Their “niche market”, representing about 35% of their business, is operating ice classed bulkers in the St Lawrence and Great Lakes. You would think with such a presence all over Canada, that they would employ Canadian seafarers. You would be wrong. Fednav has only two ships registered in Canada, flying the Canadian flag, employing Canadian seafarers, or paying Canadian taxes – the Umiak 1 and the Arvik 1 (they recently scrapped the MV Arctic).

“Bulkers” are ships designed with large holds to carry all sort of dry bulk commodities, what Canada is best known for, exporting raw resources from its territory. Maybe that’s why Fednav, as a rule, prefers to maintain a “low key” profile, and you’ve probably never heard of them.

Of all the ships Fednav operates, about half are chartered tonnage, the other half, are owned by the company. Nearly all fly the flag of the Marshall Island, a Flags of Convenience (FOC), employing virtually no Canadian seafarers – granted, like most of its contemporaries. However, I would suggest few other companies in Canada, or anywhere, enjoy such a close relationship with political power and “business” insiders.

From Wikipedia – The reasons for choosing an open register (FOC) are varied and include tax avoidance, the ability to avoid national labor and environmental regulations, and the ability to hire crews from lower-wage countries.

Granted, Fednav lists very few reported deficiencies, according to the Paris MOU database, and by all accounts is a “good” operator of ships. In my brief exchanges with peers manning these ships, the feedback has been positive – a testament to its ship managers, who are also not Canadian. Fednav has had a long relationship with Hong Kong based, Anglo Eastern Ship Management.

Of course taxes garnered from Canadian wages and local spending, such as mine, pays for the massive infrastructure costs involved in providing shipping to the exploiters of the Canadian territory – port facilities, navigational aids, traffic services, canal facilities, bridges, coast guard ships, rescue infrastructure, ice management, etc, etc, etc. I see an exceptional amount of Fednav ships in operations all over Canadian ports, where these services are plenty and expensive – the north and in particular, central Canada – the great lakes and St Lawrence Seaway. Fednav also operates numerous terminals in these regions, although that subsidiary, Federal Marine Terminals (FMT), was originally based in Chicago.

Federal Leda in Sorel, Quebec, picture by Martin Leduc

Coca Cola to the Dew                     

During the 1930s, Ladislav Pathy immigrated from Hungary, to Egypt, with his brothers, where they developed interest in shipping, insurance, cotton trading and Coca Cola. Ernest and Ladislav would then immigrate to Toronto, and on Sept. 7, 1944, established the Federal Commerce & Navigation Co. Ltd., Ship Owners, Operators & Agents; Ladislav would be the chairmen from 1966 until 1970.

Two years after the founding of the company, they bought their first ship, the Federal Pioneer. In 1953, the company moved to Montreal, but it wasn’t until 1984, that the company, as one entity, became known as Fednav. In the 1950’s, the company became a thriving arctic shipper with government / military contracts, building and supplying the DEW line in Canada’s north.

Below, from YouTube, the incredible story of the DEW line, and the tapping of skills and resources, paid for by taxes.

Laurence leverages

Laurence Pathy, photo handout

Ladislav’s son, Laurence Pathy, holding a Law Degree from Princeton, would then lead Fednav from 1970 until 2010. Based out of Montreal, its primary holdings were in shipping, but the private company had fingers in other pies including newsprint, oil and gas, etc. Laurence Pathy was reported to be one of the richest man in Canada in the late 70s.

In 1981, Laurence Pathy “loans” fellow lawyer, Paul Martin, money to “buy” Canada Steamship Line (CSL) from Paul Demarais’ Power Corp.  Power Corp, from its “humble” beginnings as a bus operator, had taken control of CSL in the late 1970s. You might know Power Corp as the current parent company of major Canadian financial players like Investor Group, Great West Life and such.

With Paul Martin at the helm of CSL, from 1981 – 1991, the launch of CSL international comes about. Using Flags of Convenience and other, “business” techniques, that empire grows, particularly in Australia. With a “willing” government, not unlike Canada’s, the dismantling of cabotage laws is honed to perfection – as a case study for what we see happening now in Canada. In 1988, Paul Martin would buy out his partner and friend, Laurence Pathy, to become sole owner of CSL.

Come here son, have a cigar!

Rt Hon. Paul Martin

Paul Martin, Power Corp, Desmarais are fascinating “animals” in their own right, expertly written about in this great piece from The Walrus – Blind Trust. It is sure to dispel any notion that Canadians live in a fully functional democracy. You can also read this 2005 article from the Globe & Mail, and this Peter Newman piece from 2013.

Paul Martin (Junior), who worked for Desmarais at Power Corp, is the son of Liberal Party Cabinet Minister, Rt. Hon. Paul Martin (Senior). Maurice Strong, who was the father’s business partner, and President of Power Corp, influenced the son to get a law degree, and hired him – nice connections hey! Junior would follow into his father’s political footsteps, and more. In 1993, Junior became Finance Minister, then in 2003 went on to become Prime Minister of Canada, for a little over two years.

Don’t thinks there any more connections to today’s Oligarch Par…. huh, Liberal Party. Trudeau Senior in the 1990s served as an Power Corp advisor, do you think that had anything to do with Junior now being Prime Minister? Think the blue bunch is better? Nope, again, Mulroney (whose daughter Caroline is now a Minister in Ontario), surprise, surprise, is also tied to Desmarais, and that’s just for starters, and goes well beyond this post.

The Order of Barbados Lobbyist

In the recently released “Paradise Papers”, leaked information from the Barbados corporate registry, list Mr. Laurence Pathy as a Director of Pathhold Investments Ltd., established in November of 1993. Barbados is listed by Investopedia as “not a pure tax haven, but it is a very low-tax environment for offshore corporations incorporated in Barbados“. November of 1993 is, coincidentally, the same time that Paul Martin became Finance Minister in Canada, and instituted special tax / profit conditions for Barbados. During his tenure as Finance Minister, Paul Martin made huge cuts to the federal budget, resulting in major service cuts, which some would argue, have hobble Canada ever since – case in point – Transport Canada’s budget.

In 2006, Mr. Laurence G. Pathy would be invested in the “Order of Canada”. The governor general’s statement :

“The President and Chief Executive Officer of Fednav Ltd., Laurence Pathy is known among his peers as a leader in the marine industry as well as an innovator in the sector of Arctic region shipping. His sustained commitment to Canada’s transportation infrastructure has helped many industries and businesses to improve their capacity to reach vast domestic and international markets. A discreet philanthropist, in 2000 he co-founded the Foundation for Charitable Excellence, which provides assistance to benevolent organizations.“

Innovator in the arctic, I didn’t know the development of the arctic needed highly connected lawyers, but okay.

It’s unclear if Laurence Pathy’s registration as an official Lobbyist of the federal government, or his prowess of Barbados corporate tax law led to his “Order of Canada”, but that is sure some nice hardware.

Records indicate that Fednav maintains a very active lobbyist team on these topics:

  • Environment
  • Industry
  • Taxation and Finance
  • Transportation

The specific topics are too long to list here, as are the government agencies reporting their dealings with Fednav’s lobbyist. As you can imagine, they involve pollution, customs, any issues involving cost recovery or other fees like pilotage, etc. you can find a list of the general areas of their lobbying here.

One of the few “non” FOC Fednav bulker Federal Hunter in Sorel, Quebec. Picture by Martin Leduc.

Hall of famer

Just last month, in September 2021, Canadian Prime Minister, The Right and Honorable Paul Martin, offered his congratulations to Mr. Laurence Pathy on his induction into the Captain John P. Wellington Great Lakes Marine Hall of Fame, with Paul Pathy, CEO of Fednav, delivering the Keynote address.

“ dedicated to the memory of those explorers, inventors, shipbuilders, sailors, and countless others who have made a contribution of exploration and development of the Great Lakes through the eras of sail, steam, and present.  Their bravery, their talents, and their ideas have powered the development of the Great Lakes transportation system, thus opening the heart of North America to settlement and commerce.  The skill and dedication of these people and thousands of others was needed to fulfill the tremendous potential of the Great Lakes.”

The Hall of Fame’s aim

The event was sponsored by :

“ Fednav, Port of Monroe Michigan, Canada Steamship Lines, Algoma Central Marine, Lake Carriers’ Association, McKeil Marine, Green Marine, Shipping Federal of Canada, Port of Cleveland, Duluth Seaway Port Authority, Western Great Lakes Pilots Association, Lakes Pilot Association and Great Lakes Towing.”

The kids take over

Paul Pathy, CEO of Fednav, photo handout

In 2010, Laurence’s two sons, Mark and Paul, take the reins of Fednav from their father, as co Chief Executive Officers, until 2016, when Mark leave the position of co-CEO, and Paul Pathy assumes the sole CEO position.

“ “While he (Mark) is resigning from his positions, he will continue to be involved in the company’s activities as a major shareholder and member of the Board,” stated Laurence Pathy, Chairman of the Board” “

 In the same 2016 news release, Fednav boasted :

“ Fednav Limited is an international shipowning and operating company headquartered in Montreal. Its principal activities involve the transport of bulk and general cargo around the world. Fednav has offices in Antwerp, Barbados, Hamburg, Rio de Janeiro, Singapore and Tokyo, as well as regional offices in Canada and the United States. Fednav also has terminals, logistics, ice analysis, and ship agency divisions. The company employs 260 office staff worldwide and more than 2,000 crew members and stevedores.

Fednav International Ltd.
FIL is the ocean freight division of Fednav Limited. It operates a modern fleet of close to 100 bulk and is the leading international user of the Great Lakes-St. Lawrence Seaway System and annually transports close to 25 million tonnes of bulk cargoes worldwide. FIL is renowned for its ice-trading expertise and boasts the world’s largest fleet of ice-class bulk vessels.”

Cabotage

Coasting Trade Act (CTA) is a law in Canada that essentially states that commerce in Canada is to be transported by Canadians. Typically that means that a vessel is built in Canada, or has to have taxes paid on it prior to importing into Canadian trade. It means that the crew is Canadian, vetted by Transport Canada and paying Canadian income taxes. The company is Canadian and paying taxes. Taxes then pay for the infrastructure of Canada, such as roads, canal seaways, ports, etc. These laws are not uncommon in the world, most nations have some variation of it – they are commonly know as cabotage laws.

Wouldn’t it be great to take advantages of the all the service that taxes pay for in Canada, yet pay no tax for yourself or that of your enterprise. What an edge over your competition. That’s what happens when you get a ship built outside Canada, flying a FOC, exploiting seafarers from poorer regions (because they don’t pay taxes) – its considerably cheaper to run. Which is in essence what Fednav does, it uses those ships to trade within a premium nation such as Canada – which is why most nations have cabotage laws. Aside from business protection, there is a real need to protect the environment and for things to not degenerate into lawless garbage dump – like a “poorer nation” with corrupt governments.

The thing is, Fednav dances right up to the line, real tight. They are not the only ones, but their deep connections into the corridors of power in Canada, can make sure that agencies overseeing Canadian laws, such as CBSA, TC, Environment, CRA, etc, are given the tools and direction by their ministers.

The CTA is quite clear; however, there are exemptions to the law which are called waivers. These waivers, meant to facilitate a special project, where highly specialized Canadian vessels may not be available. The Coasting Trade Act waivers are issued by a board made up of lawyers types, appointed by the government – you see where I am getting at.

Fednav’s MV Arctic in Deception Bay, Quebec. Built in Canada, crewed by Canadians, originally owned by Canada, later bought by Fednav, who scrapped it in 2021. Photo by Martin Leduc

Because Fednav is clearly an operator of foreign ships, and a very simple and common type of ship, the bulker, they usually don’t apply for many of these waivers. Unlike the Irving family, another highly connected family in Canada, they apply, and are and routinely given waivers for tankers and tugs. Tankers are also fairly simple and common type of ship.

I always found it funny that instead of putting pressure on companies to build and operate a Canadian ship, the board turns around and asks those same companies, if they have a Canadian ship available to do the work? A company like Fednav, then says no – because they have scrapped their Canadian ships – but reply “we do have a suitable FOC one that matches all the special criteria of this project”.

Its a bit of a merry go round, but in the end, the Canadian jobs and taxes are now turned into profit for a “foreign company”, when in fact the control and benefit is in Canada. Of course you need good government support, lobbyists, image consultants, marketing media, enveloping yourself in philanthropy and social parties in Montreal, Toronto, Vancouver, etc. to pull it off.

Two of Fednav’s vessels are flagged in Canada, and featured predominately on Fednav’s red themed website, along with a stylize maple leaf of their company logo. Apart from marketing, these ships service the Raglan Mine in northern Quebec, used to carry ore from Deception Bay, to the transhipment port of Quebec City, where the ore goes to Sudbury for refining. The ships then switch berth, and load fuel and supplies to take back to the mine – a very clear case of cabotage. When ore is transported to refiners outside Canada from Deception Bay, Fednav uses one of its FOC vessels, such as the Nunavik. Other shipping companies, such as NEAS and Desgagnes operate in the Canadian arctic, but these ships generally supplies the various northern communities with sundries and groceries, and are highly subsidized by the government.

Hon. Marc Garneau, Minister of Transport, 2015 – 2021

Appointed in 2018, by former astronaut and Liberal Cabinet Minister for Transportation, Hon. Marc Garneau, Mark MacKeigan, granted a CTA Waiver to Fednav, for the Marshall Island flagged ship, Nunavik. The waiver was issued October 18, 2021, for the MV Nunavik to take a load of equipment from Quebec City, to Deception Bay. Mark is a lawyer, who previously worked for the seaway, where Fednav boast itself as the “leading international user of the Great Lakes-St. Lawrence Seaway System”. Mr. MacKeigan has come under fire from airline watchdog groups, who highlight that his husband is a prominent lawyer for the airline association, which MacKeigan is also overseeing.

The Raglan Mine, like many similar entities in Canada, are controlled by Glencore. If you are interested in this type of post, see Marc Rich and Trafigura in particular, to read about what levels of fuckery these people will reach for money and power. Riveting, if it wasn’t so damn egotistical and harmful on so many levels.

Speaking of Transport Canada, the federal cabinet minister responsible for Transport Canada from 2015 until 2021, was the Honourable Marc Garneau. Minister Garneau is a high profile Liberal Party of Canada member; a Royal Military College trained Naval Officer, who was Canada’s first astronaut, first elected as Member of Parliament for Westmount in 2008. Westmount is 1.5 square mile neighborhood – “enclave” – of Montreal, with its own power company, and is one of the wealthiest postal code in all of Canada. It is home to the Pathy Family, as well as several directors of Fednav over the years, among other similar types of dynasties.

Glencore’s terminal at Deception Bay, for the Raglan Mine in northern Quebec, picture by Martin Leduc

“Giving Back” – To who?

Philantropy – the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.

In 2008 “…I set up a foundation called the Martin Family Initiative (MFI). It focused primarily on education, healthcare and child welfare for indigenous people.”

Prime Minister Paul Martin and close friend of Laurence Pathy

You can read here about “Charitable gifting strategies as a tax and financial planning tool“, and read from a federal government report on “Charity Industry”, philanthropy and the tax consequences – resulting government revenue shortfall – here.

With the uber rich of today, comes the uncomfortable truth that perhaps success in business leaves you a bit hollow, or seemingly lacking a soul – an image problem. This has given rise to “philanthropic work”, where carefully orchestrated financial moves can remedy the image of a soulless enrichment; stealthily achieve business goals all the while providing generous tax writes off – not to mention keep “trophies” shinning in the bright lights of galas and social calendars events.

The PFF is a private foundation based in Montreal. Our team is active in searching for projects in our areas of interest that meet our criteria for social change and impact. We do not accept unsolicited requests from the public or from organizations.

Pathy Family Foundation

The Pathy Family Foundation, is an active “Canada Not-for-profit Corporations Act” corporation, established in 1970. It shares the same address as the main Fednav address, along with a litany of other marine themed and various numbered corporations. Laurence Pathy is listed as director of many of these corporations. Jessica Pathy, spouse of Mark Pathy, of the Apathy is Boring Project, is also listed as director of several corporation including the Family Foundation.

It’s not hard to see what Fednav does in Canada, their bulk carriers carry the raw material controlled by their partners at the country club, and facilitate its export. Those resources are then processed by other country club types who exploit leaner environmental, labour standards in other jurisdiction. Wash, rinse, repeat.

However, a great deal of these resources comes from remote Canadian communities whose traditional inhabitants are indigenous. Call me cynical, but what a hero one could be, to provide token care to these “poor” people, while the mine, which you profit from and that may have made them sick, operates nearby. Then do it, all while getting a tax write off. Did you really think reconciliation is about helping those struggling on the downtown east side, or atone for massive colonial ills that made the establishment what it is today?

I am sure the PFF does good work, but I find it interesting that its focus is on indigenous affairs, and one of its prominent beneficiary is, well, you guess it, Paul Martin’s Martin Family Initiative (MFI). A gift to my longtime buddy, and a tax write off – sweet!

Pathy Family Foundation 2019 Activity Report, highlighting their work with the Martin Family Initiative

So whats the point of this post?

Well if you feel like Transport Canada is not doing anything, it isn’t, and that’s by design.

If you voted time after time, for one of the two established political parties in Canada, and nothing seems to change, you are probably correct.

Go visit Parliament Hill, walk the dark, stony halls – you will see portraits of a bunch old white men looking down at you, and those are the ones that we “voted for”, not even the ones that really hold power.

There is a strong establishment that wants no change, as it would damage the precious empires they worked so hard to control and build. No environmental causes will sway them, social justice, give me a fucking break, only the ones they choose. If they can get the little tax they contribute, further written off in exchange, or, and in most cases, for a name on a building – that’s even better.

Ocean Protection Plans, Sunny Ways, Reconciliation, Infrastructure Banks, PPP, etc. is bullshit by an army of spin doctors now in Federal Government director, and policy positions, meant to buy social license, with public funds, for specific policies that benefit a very narrow interest. It’s getting so narrow that it’s hard to hide, and even with shitty internet access, a simple sailor like me can see it.

I often hear things like the need to compete with global this and that. Canadian seafarers are too expensive, bla, bla bla. There is no such thing. Companies like Fednav and CSL, and their copies, lead the charge, set the bar globally, they profess it in their marketing. The only reason they out compete “globally” is the tight noose they have on power in Canada, through their “country clubs” buddies.

They have leveraged off the backs of Canadians, into an edge against true global competition. They are Canadian for the protection and the capital it affords, but “global” (irresponsible) when it comes to social, tax, and environmental responsibilities, among others – when it comes to this, no fucks given.

I say, go live, and set up your home office where you exploit the majority of your work force, environment or even where the majority of Canada’s raw products end up, see how smart you are then. Hell, go live in Barbados, your philanthropy will certainly be appreciated there.

So enjoy your space trip Mark, paid for by the sweat of seafarers and the musical creativity of others. No matter what happens to the social masses down here, your close friends and family, captains of industry, will be able to rise above it all, by sheer gumption, hard work and innovation! Or at least that’s what the governor general’s medal will say.

PS. In another curious side note, Stingray was launched by the publicly funded (my taxes) CBC (Canadian Broadcasting Corporation) in 1995, as an early spotify type service. It is now “private” and worth a great deal more.

When asked, “Google” defines the meaning of establishment:

The Establishment is a term used to describe a dominant group or elite that controls a polity or an organization. … One can refer to any relatively small class or group of people who can exercise control as The Establishment.

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