The front page of the May 10, 1948, edition of the Toronto Daily Star reported the death of publisher Joseph E. Atkinson, who had transformed a struggling daily into a powerful progressive voice with the largest circulation in the country. Elsewhere on the page, readers discovered that the Star would be owned in perpetuity by the Atkinson Charitable Foundation. Atkinson intended that “the publication of the papers will be conducted for the benefit of the public in the continued frank and full dissemination of news and opinions” and that “the profits from the newspapers will be used for the promotion and maintenance of social, scientific, and economic reforms which are charitable in nature, for the benefit of the people of the province of Ontario.”
The paper’s enemies sensed an opportunity.
Near the top of that list were Progressive Conservative powerbrokers George Drew and George McCullagh. Drew had always had an icy relationship with the Star, and his mixed fortunes throughout 1948 probably didn’t help his mood. While the PCs won the provincial election in June 1948, Premier Drew lost his High Park seat to temperance advocate William Temple of the CCF (the ancestor of the NDP). He resigned the premiership and was replaced as interim leader by veteran Peel MPP Thomas Laird Kennedy. In October, he became the federal PC leader.
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A close friend of Drew, Globe and Mail publisher George McCullagh, purchased the Star’s conservative evening rival, the Telegram, in November 1948. Now that he had control of two of Toronto’s three dailies, he savoured the prospect of destroying the Star. “I’m going to knock that pedagogic rag right off its pedestal,” he boasted to Maclean’s.
On April 25, 1949, provincial treasurer Leslie Frost introduced the Charitable Gifts Act to the legislature. It proposed limiting charitable foundations and trusts to owning no more than 10 per cent of a business’s capital stock. Any excess holdings had to be disposed of within three years, through either a sale or gifts to other charities. The rules would be retroactive to April 1, 1949, and would not apply to the holdings of religious institutions.
“If it is not aimed at churches, then who is it aimed at?” asked William Dennison (CCF, St. David).
“Use your imagination,” replied A.A. MacLeod (Labor-Progressive, Bellwoods).
“Why, the Toronto Star,” answered Harry Nixon (Liberal, Brant).
Frost denied this. He said that the bill wouldn’t impose additional taxes or tax charitable foundations. The bill, he said, would “prevent the undesirable concentration of the control of business in perpetuity in charitable trusts or foundations.”
While no specific examples were mentioned, observers quickly concluded that the CGA targeted the Star. If the paper continued to operate as it did, McCullagh’s papers would suffer most. It was widely believed that he and Drew had engineered the bill to settle old scores. It also seemed curious that the bill had not been mentioned in the recent throne speech or provincial budget.
In a front-page editorial the next day, the Star argued that the act violated the right of individuals to dictate, under laws the laws that had existed at the time of their death, how their estates would be dispersed. The CGA was “so vicious in principle, so outrageous in its retroactive provisions, and so violent in its destruction of one of the primary rights of man that its passage would be a blot upon the good name not only of the government but of Ontario itself.”
Most Ontario newspapers, regardless of their political affiliation, criticized the law:
“Is the whole thing a scheme to give a government favourite a monopoly in Toronto journalism that would stifle public opinion and become a serious danger to any interests but its own? The measure should be fought to the last ditch.”— Goderich Signal-Star
“Mr. Frost is freely spoken of as the coming premier of the Ontario. We hope the Charitable Gifts Act which he is fathering is not a sample of the sort of arbitrary legislation he is going to inflict on us if or when he is elected to head the Ontario government.”—Kingston Whig-Standard
As a barefaced attempt to subvert a Canadian legislative body, this proposed law has no precedent in the annals of this dominion.”— Ottawa Citizen
“The more we examine it the less we like it.”— Ottawa Journal
“We are alarmed … by a piece of legislation which looks so much like an attempt to silence criticism of the Ontario government.”— Peterborough Examiner
“It smacks too much of petty, vindictive, and unfair discrimination against a newspaper which vigorously has opposed the Conservative party.”— Windsor Star
One question that frequently arose: Why had no previous government attacked the Telegram, which, following the will of its founder John Ross Robertson, had been run by trustees for the benefit of the Hospital for Sick Children for three decades until McCullagh bought it?
Debate over the second reading of the CGA began on March 30. Just after 4:30 p.m., CCF leader Ted Jolliffe began a filibuster against the CGA. He said that the act should be called “An Act for the Relief of George McCullagh and His Friends.” He raised concerns about press freedom, backing his arguments with citations from British law books.
At 11 p.m., Frost asked Jolliffe, who, outside of scheduled breaks, had spoken for nearly five hours, whether his speech was nearly over.
“I am near the end of a paragraph,” Jolliffe replied.
Although CCF MPPs had prepared for a long night by setting up cots in a nearby office, Jolliffe agreed to continue his speech the next day. In the end, Jolliffe spoke for seven and a half hours.
McCullagh didn’t admit to having shaped the CGA, but he was happy to be associated with it. “I relish the blame,” he told Time magazine. “Knocking out that rag is my only passion.” While a front-page editorial in the March 31 Globe and Mail claimed that the paper had “no desire to get into a dog fight,” within two sentences, it had labelled Star supporters as “Communist and Socialist stooges.” The glee with which McCullagh’s papers attacked the Star and Jolliffe’s filibuster increased suspicion about his participation in the bill.
On April 4, attorney general Leslie Blackwell proposed a pair of amendments that would extend the three-year time limit to dispose of shares and allow foundation trustees to buy up to 90 per cent of the shares they had to dispose. Blackwell couldn’t resist insulting the Atkinson Foundation, calling it “the most vicious monopoly the mind of man could conceive,” whose only reason to exist was “charity, ideology and perpetuation of the newspaper in the family until resurrection day.” Order had to be called several times as Frost and Jolliffe argued and allegations flew about Drew’s influence on the bill.
The next day, Frost’s opponent was C.H. Millard (CCF, York West). Frost contended that the papers could be given to an assortment of charities, which could then elect a board of directors. Millard wondered, “How on earth could you operate a business with 10 conflicting views and no one with a controlling interest?” Fourteen opposition backbenchers expressed their criticisms of the bill, reading editorials from small-town newspapers and reminding the legislature that Drew had frequently complained about the Star’s “evil” during his last two years in power. Frost refused to withdraw the bill.
On April 6, Eamon Park (CCF, Dovercourt) told the house that lawyer John Tory, who had worked with McCullagh on the Telegram purchase, had assisted in draft the CGA. While Frost did not deny Tory’s involvement, he insisted that Drew and McCullagh had played no part. Tory, the grandfather of Toronto’s current mayor, told the Globe and Mail that he had not been involved in crafting the bill.
“This bill makes it obvious someone has gone mad,” observed Agnes Macphail (CCF, York East), who also wondered why the government couldn’t let the Atkinson Foundation run things for five years to prove itself honourable. On the Liberal side of the legislature, Nixon had similar feelings. He also felt that Atkinson deserved more gratitude for having ensured that his business would continue to operate, instead of spending his final years living it up abroad.
Later that day, after a grand total of 26 hours of debate, the bill passed 47-33. Frost announced it would be amended in committee so that trusts would have seven years to dispose of their shares or sell the business (a period the Globe and Mail felt was too long); affected companies would discuss balance sheets and profit distribution with a public trustee.
The saga might have influenced the Star’s vicious coverage of Drew during the federal-election campaign in June 1949, which saw the former premier lose half of his party’s Ontario seats. Both the Star and McCullagh’s papers turned an October 1949 provincial byelection in Leeds into a life-or-death contest over the CGA, an issue that few in the Brockville area cared about.
Frost, who became premier in May 1949, had not enjoyed having the press turn on him and came to view McCullagh as a liability. “His interpretation of the act, which was not mine, made it extremely hard for me,” Frost later recalled. He insisted that the CGA had been in the works in his department for several months and had not been intended to punish the Star.
“I cannot say that George’s methods have ever influenced me very greatly,” Frost observed. “When I was with him I always endeavoured to give him loyal support, even though he knew that many times I was in disagreement with his methods. I never hesitated to tell him that.” A rift grew between Drew and Frost, with the latter pursuing a more modern, progressive course for the provincial Tories. McCullagh, who died in August 1952, never achieved his goal of wrecking the Star.
The Star’s trustees took the risk that the government’s desire to enforce the CGA would fade and, taking Prime Minister Louis St. Laurent’s advice, promoted the foundation’s work. In March 1958, the trustees established a new holding company and bought the Star for $25.5 million ($229 million adjusted for inflation). The deal established the structure of five controlling families, who ran the company for decades as it evolved into Torstar.
“With the co-operation of our many loyal employees,” new president Joseph S. Atkinson said after the sale received court approval, “we will endeavour to publish a newspaper worthy of the Star’s heritage of liberal thought and progressive action.”
The sentiment was echoed in this week’s announcement from NordStar Capital, which on May 26 said it had reached an agreement to buy Torstar for $52 million: “NordStar will honour the Toronto Star’s storied history by retaining its long-standing commitment to progressive positions and fearless journalism.”
Sources: Old Man Ontario: Leslie M. Frost by Roger Graham (Toronto: University of Toronto Press, 1990); J.E. Atkinson of the Star by Ross Harkness (Toronto: University of Toronto Press, 1963); the March 26, 1949, March 31, 1949, and April 5, 1949, editions of the Globe and Mail; the March 31, 1949, edition of the Goderich Signal-Star; the January 15, 1949, edition of Maclean’s; the April 1, 1949, edition of the Ottawa Citizen; the March 30, 1949, edition of the Ottawa Journal; the March 26, 1949, April 5, 1949, April 6, 1949, April 7, 1949, and May 27, 1958, editions of the Toronto Daily Star; and the November 6, 2002, edition of the Toronto Star.