BAY STREET SCIONS HEAD FOR THE WOODS

Scions of a Bay Street legend go to the woods to plant their own legacy

YEARS AGO, Jack Cockwell, the Bay Street dealmaker who shaped the Brascan empire into Brookfield Asset Management Inc., gave a dark warning to his two sons. “If you kids don’t do well in school and don’t get your homework done,” he said, “you are going to end up as foresters.” Fast-forward a bunch of years and Cockwell’s dire prediction came true: both Malcolm and Gareth Cockwell are foresters. But forestry, Malcolm says, far from being the fall from grace his father might have (at least jokingly) implied, is a good place to be.

The Cockwell family’s Canadian forest adventure began in the 1980s when Jack bought Limberlost, a forest 250 kilometres north of Toronto. Malcolm was eight, when his dad’s mentor, Peter Bronfman, passed away in 1996. “All of a sudden, we were spending every weekend up at Limberlost clearing trails,” Malcolm recalls. “The way to get out of doing grunt work with a shovel and a wheelbarrow was to learn to use equipment. So I became the expert with the chainsaw and the tractor.”

The sons had so much fun in the forest, they essentially never returned to the city. Gareth, the younger son, is managing director at the family-owned, 10,000-acre Limberlost Forest and Wildlife Reserve. Malcolm, the older at 32, is a registered professional forester and a PhD candidate in forestry at the University of Toronto. A tireless optimist with a cherubic face, a shock of dirty blond hair that tends to stand straight up on his forehead and who dresses in bright orange jackets and steel toe boots, Malcolm also serves as managing director of Haliburton Forest & Wild Life Reserve Ltd. The sons may not touch the old man financially — Forbes pegs Jack Cockwell’s net worth at US$1.5 billion — but they are doing okay.

Haliburton Forest spreads for about 100,000 acres on the southwest border of Algonquin Park. Recently, the Cockwell family bought another private forest, 145,000 acres near Timmins, Ont. Haliburton operates a sawmill and recently bought a second sawmill, Almaguin Forest Products, in South River, Ont. Malcolm also serves as chairman of Cockwell-controlled, TSX-traded Acadian Timber Corp., which owns more than a million acres of forest in New Brunswick and Maine. Add it all up and Malcolm now oversees one of the largest private landholdings in Canada.

Some, of course, are pessimistic about the forest sector. The collapse of the pulp market and the softwood lumber dispute with the United States have compounded the challenges presented by fires and manpower shortages. Mills are closing and the industry feels a little passé — hewers of wood and all that. But the Cockwells are bullish, and play the long game.

“It’s a real industry making real products and working on real environmental solutions,” Malcolm says. Forest “is comparatively cheap,” he adds. “There is no reason land values will not follow the course they have since colonization. We are big believers in what will happen in the long term,” though he grants that the term is relative. “My sister Tessa is a geologist. Her version of long term is 100 million years. My definition is 120 years. Our investment window is roughly equal to a mature tree on the land.”

The heart of this enterprise, Haliburton Forest, suffered indiscriminate logging in the 19th and early-mid-20th centuries. The Schleifenbaum family of Germany bought it in 1962 for $7/acre. Peter Schleifenbaum, a forestry PhD, applied German silviculture to regenerate Haliburton; it became Canada’s first forest to earn certification by the Forest Stewardship Council. Schleifenbaum mentored Malcolm, retains an ownership in Haliburton Forest and chairs its board. (Schleifenbaum is also on Acadian’s board). Malcolm and his team of young foresters apply Schleifenbaum’s European model: cut financially mature trees and sick trees, and protect young trees to continuously improve the health of the forest.

Malcolm even turned his undergraduate research into a book, The Forests of Canada: A Study of the Canadian Forestry Sector and Its Position in the Global Timber Trade. In it, he critiqued the orthodoxy of forest management in Canada — the only western country where most forests are publicly owned. In Germany, for example, families own forests for centuries. “Landowners are more incentivized to take good care of their property, because you reap what you sow,” Malcolm wrote.

Malcolm traces his love of the great outdoors to his paternal grandmother, Daphne Cockwell of South Africa. As a small boy, he recalls, he once spent a long time with her on a public trail in the Western Cape province, watching dung beetles push poop. “She planted in my mind … a deep passion for protecting and enjoying the wilderness,” he wrote in his book. Thomas McCay, Haliburton’s forest manager, marvels at the boss’s choice of leisure activities. “Sometimes on weekends to unwind he drives the front-end loader to pile logs in the mill yard. I can’t drive a front-end loader. He can.”

Malcolm, a father of two, also serves on the board of Forests Ontario, a charity that focuses on tree planting, forest stewardship and forest education. Rob Keen, Forests Ontario CEO, said Malcolm has done a lot to instil pride in forest workers. He also helps loggers access government subsidies to bring on apprentices. “The logger is often the low man on the

We all quite happily abandoned urban life to go back to the bush

totem pole,” Keen said. “Malcolm is on the leading edge to make sure that those people on the ground are recognized and compensated.”

Forestry work may not seem glamourous — one of Haliburton’s steadiest products is railway ties — but the appeal for Malcolm is obvious. “Quite a few people here are from the city,” he says. “We all quite happily abandoned urban life to go back to the bush. When you go home, you’re not fighting traffic. You have freedom and independence.”

What value might the Cockwells unlock from the forest? In his book, Malcolm wrote, “Canada is known around the world for being rich in natural resources. Guesses at the value of these resources range from about one trillion to tens of trillions of dollars.” That adds up to lots of reasons to work in the forest — reasons that even his father can understand.