Cogeco Inc CEO Louis Audet says family ownership is good for businesses and Canada

, Economic

Cogeco Inc. chief executive Louis Audet spoke at Toronto's Canadian Club on Monday.

TORONTO — Keeping businesses in the family is good for the economy and Canada should encourage it, Cogeco Inc. chief executive Louis Audet said during a speech at Toronto’s Canadian Club Monday.

The issue is in the public eye because of fellow Quebecbased, family-controlled business Bombardier Inc. Its dual class share structure, which gives the Bombardier-Beaudoin family voting control of the company, has been raised as a sticking point in negotiations for bailout money from the federal government to help it deal with financial troubles.

After the speech, Audet declined to comment on whether the federal government should provide aid to Bombardier or attach any conditions to it. But in his remarks, he pointed to Germany as an example of a country that has benefited economically from tax policies that encourage businesses to be passed down to future generations, which he said encourages diversity and competition.


“I know that this point of view does not enjoy unanimous support,” he said. “Yet, family ownership does bring persistence and long-term vision and investments and builds prosperity for a country.”

Henri Audet founded Cogeco in 1957, starting with a television station in Trois-Rivières, Que. and growing to become Canada’s fourth-largest cable company. The Audet family continues to own the holding company that controls Cogeco.


Cogeco also provides Internet, telephone and business data centre services. The company has opted to stay out of the wireless business unless it can gain access to an incumbent’s network and resell wireless services as a mobile virtual network operator, which Canada’s telecommunications regulator ruled against mandating last year.

“We won’t do wireless. On our own, we won’t. It’s way too expensive,” Audet said. “If one of the incumbents were willing to work with us, we’d be willing. But I don’t sense that’s forthcoming.”

In his speech, Audet said Cogeco seesgrowth opportunity in helping companies outsource data storage, since about three-quarters of businesses worldwide have yet to do so. Cogeco acquired Peer 1 Hosting in 2013 and now has 17 data centres serving businesses in North America, Central America and Northern Europe.

Audet also said Cogeco continues to look for independent cable operators in the U.S. to purchase. In 2012, Cogeco purchased Atlantic Broadband for US$1.36 billion and went on to acquire MetroCast Communications of Connecticut LLC for US$200 million last year.

“The U.S. potential in cable systems right now is so huge that it is far easier to do than anything else I can think of,” he said, while declining to name any specific targets. “We’re always on the lookout.”

Cogeco has managed to slow the trend of cable subscriber losses as customers switch to online video providers like Netflix Inc. buy offering TiVo PVR services that allow people to watch programs on their own schedules. Audet said it’s best to embrace technological change rather than trying to fight it.

“If you’re working in the public interest as an independent party, you welcome technology and destructive activity, because they typically take a society forward,” he said. “You can be worried, but is that really what you should be worried about?”


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