Behind the name

Stephen Smith

Photography by Wade Hudson

Stephen Smith, Sc’72, LLD’17, has a new suit. It’s royal blue, with faint stripes, the perfect match to his eyeglass frames, and the sky that goes on forever behind him.

We’re up on the 20th floor of First National Financial’s downtown Toronto offices in a sleek, expansive boardroom beside a sleek, expansive lobby. Although we can’t see them, all around us are First National employees, busy managing the more than $140 billion in mortgages that Mr. Smith’s company now handles.
It's all quite the contrast to the 72-year-old’s modest upbringing in Ottawa’s Alta Vista neighbourhood. Yet if you look hard enough, you can see a clear line from that childhood to this boardroom and his remarkable $100-million gift to re-imagine engineering education at Queen’s.    

Mr. Smith’s mother was a homemaker, his father a civil servant. 

“He and I were always thinking up little businesses to start,” remembers Mr. Smith. One of their first was a paper route for the young Smith, which he did when he wasn’t learning the intricacies of ham radio or computer coding. He was, he says, “a bit of a nerdy kid, back when nerdy was not a compliment.”

One day in July 1968, Mr. Smith’s parents took him on a drive to Queen’s. They toured a residence and walked around campus. 

“Well, what do you think?” asked his father. “Looks good to me,” replied son.  

Mr. Smith showed up in Kingston that fall, an eager electrical engineering student still harbouring a fierce interest in business. It was so fierce, in fact, that he convinced the Faculty of Engineering to let him drop his first-year geology course so that he could take an economics course instead. He continued to take economics courses throughout his four years, while in the summers he worked various coding jobs to scratch his technical itch.  

After Queen’s, Mr. Smith went to the London School of Economics and Political Science to pursue a master’s degree in economics. He then worked a few corporate jobs, including at aircraft manufacturer Hawker Siddeley. In 1980, he was fired for speaking his mind. As he told this magazine in 2015: “I thought I was smarter than my bosses. I was insolent, which is probably the character of entrepreneurs.”   

Emboldened to try entrepreneurship, Mr. Smith began flipping houses in Toronto in the early 1980s. It didn’t go well. Interest rates ballooned, the real-estate market took a nose dive, and Mr. Smith’s venture collapsed. By 1984, he had declared personal bankruptcy and had moved in with his kid sister.  

It was, he says, one of the lowest points in his life. 

“When people fail, they usually say it’s bad luck, and when they succeed, they say it’s skill. I think it’s a little bit the other way around, and that failure was a lack of skill.” 

Soon, though, Mr. Smith picked himself up and put two of the big skills he learned as a Queen’s engineer to the test – problem-solving and perseverance. Teaming up with Moray Tawse in 1988, they opened a mortgage business called First National Financial above a pub in the Yonge and Eglinton area of Toronto. 

It was the perfect type of business for Mr. Smith, one where he could get his fill of economics and computer coding. And it was successful for two main reasons: he and Mr. Tawse priced their mortgages more competitively than the banks, and Mr. Smith programmed sophisticated computer software that was better than the banks’. 

Today, First National is one of the largest non-bank mortgage lenders in the country. Mr. Smith recently stepped down as CEO, but he is still actively involved as executive chairman. He is also actively involved in several other ventures, including philanthropic causes mainly in the areas of history, the arts, and education. 

During the hiring process of his CEO replacement, Mr. Smith took one of the psychometric tests they were using. One of the more fascinating findings was that unlike most CEOs, he scored high in risk taking but lower in risk aversion. His interpretation: “I think most things are too risky, but if I’m really comfortable, I’m all in.”   

He’s clearly all in on Queen’s. His 2015 donation of $50 million to support business education at Queen’s was the largest ever made to a Canadian business school. And now his $100-million investment in engineering education at Queen’s is the largest donation to any Canadian engineering school. 

“I’ve been very pleased with what’s happened at the School of Business, and that really gave me the confidence to make this gift to engineering,” he says. “I’m very comfortable with the vision behind this, and I think it’s going to help ensure that education at Queen’s is at a world-class level.”

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