Toronto-based entrepreneur Stephen Smith poses for a photograph in Toronto on, Wednesday Oct. 25, 2023. (Christopher Katsarov/The Globe and Mail)Christopher Katsarov/The Globe and Mail
Two years ago, financial services billionaire Stephen Smith quietly approached Queen’s University’s engineering school with an offer to donate $50-million, a gift aimed at better preparing graduates to solve society’s most complex problems.
Within weeks, Queen’s dean of engineering, Kevin Deluzio, came back with a blueprint for a new curriculum, with more faculty and technology to attract top talent, a new emphasis on interdisciplinary study and a beefed-up, year-long internship program. One catch: The upgrade would cost twice what Mr. Smith proposed giving. The pitch worked.
On Thursday, Mr. Smith announced the largest pledge ever made to a domestic engineering school, a $100-million gift designed to boost his alma mater to the top ranks of global programs. Just eight years ago, the 72-year-old entrepreneur gave $50-million to what’s now the Kingston university’s Smith School of Business.
“Right now, we teach engineers how to build a bridge,” Mr. Smith said in an interview. “We need to teach them to think about how that bridge impacts a community, how it impacts the environment. That’s a new approach to learning.”
Queen’s accepts 850 engineering students each year, and it is among the country’s most competitive programs. “This gift gives us the resources to reimagine the entire engineering experience,” Mr. Deluzio said in an interview. “It’s about changing how we teach, so our graduates can change the world they live in.”
Across Canada, a handful of major donors such as Mr. Smith are helping universities deal with a financial crunch. Government funding is largely frozen, and the number of graduates giving back to their schools is dropping.
Since 2019, the number of donors to postsecondary institutions fell by 4 per cent, according to a study published in March by the Canadian Council for the Advancement of Education. Less than 1 per cent of all donors – 2,044 individuals and organizations – accounted for 84 per cent of new gifts.
For universities and colleges, the good news is that many of these new donations were large – 343 donors contributed $1-million or more. The CCAE study shows the total amount of donor funding jumped to $1.5-billion last year from $1.18-billion in 2019.
Mr. Smith’s family – he and his wife, Diane Blake, have three adult children – decided to make universities and colleges their philanthropic focus more than a decade ago, in part because they saw a chronic lack of government funding for postsecondary education. Mr. Smith said: “An investment in education is an investment in Canada’s future.”
“My goal is to help Queen’s build the country’s top engineering school – one that’s recognized as among the best in the world,” said Mr. Smith, who earned an electrical engineering degree from the school in 1972. His donation also reflects the executive’s satisfaction with his previous gift to the business program, which he said “has surpassed my high expectations.”
Wanda Costen, dean of Queen’s business school, said funds from Mr. Smith and other donors allowed the university to hire and retain research-focused faculty and become an educational leader in the most competitive markets, including artificial intelligence and financial technology.
“Because of Stephen’s support, Queen’s was a leader in fintech by being the first in Canada to address a gap in fintech education,” she said. “Stephen’s gift transformed the business school.”
Mr. Smith’s donations to Queen’s are among the largest ever made to a domestic university, as entrepreneurs increase the size of their gifts to build globally competitive institutions.
To date, the largest donation was made by James Temerty, founder of green energy pioneer Northland Power Inc., who gave $250-million to the University of Toronto in 2020 to fund the medical school that now bears his name. The previous year, Onex Corp. founder Gerry Schwartz and Indigo Books and Music Inc. chief executive officer Heather Reisman gave $100-million to U of T.
Other major donors include BlackBerry Ltd. co-founder Mike Lazaridis, who gave $123-million to the University of Waterloo, and Laidlaw Inc. founder Michael DeGroote, who gifted $105-million to McMaster University’s medical school. To cap a career in the oil patch, Geoffrey Cumming gave $100-million to the University of Calgary.
In return for his gifts, Mr. Smith will have his name on both the engineering and business schools at Queen’s. A generation back, entrepreneurs could count on seeing their name on a campus building after donating $20-million.
Mr. Smith’s wealth comes from a career of backing businesses that lend to clients who, for one reason or another, don’t borrow from the big banks. After a failed venture in real estate – the executive talks openly about his struggle with depression after the business’s collapse – he built stakes in two public companies. He owns an $800-million stake in mortgage lender First National Financial Corp. and a $440-million position in EQB Inc., parent to Equitable Bank, the country’s eight largest lender.
He is also a major shareholder in the privately held Canada Guaranty Mortgage Insurance Co., one of the country’s largest mortgage insurers, and in two non-prime lenders, Fairstone Bank of Canada and Home Capital Group Inc., acquired earlier this year for $1.7-billion.
“Down the road, I expect to make another significant gift. I have no idea what it will be,” Mr. Smith said.