Stephen Smith

Education and Early Career

Stephen Smith was born in Ottawa, where he attended St. Patrick’s College High School. His early interests included ham radio operating and the emerging field of computer coding. (See also Computer Science.)

In 1968, he attended Queen’s University, where he earned his Bachelor of Science (Honours) in electrical engineering in 1972. While studying engineering, he received special permission to take economics courses with renowned economists Richard Lipsey and David C. Smith.

Stephen Smith’s first jobs included work as a computer coder before deciding to pursue his Master of Science in economics from the London School of Economics and Political Science (LSE) in the United Kingdom.

While there, Smith became fascinated by the links between business decisions and public policy. After graduating in 1973, he worked variously as a market researcher, research analyst, and then as an assistant director in corporate planning for aircraft manufacturer Hawker Siddeley Canada Inc.

In 1980, Smith was fired from Hawker Siddeley for speaking his mind. “If my boss told me to do something and I didn’t think it was right, I didn’t hide that,” he recalled in 2015. “I thought I was smarter than my bosses. I was insolent, which is probably one of the characteristics of entrepreneurs.” Smith took the opportunity to change his career direction. He began to invest in real estate, renovating and then reselling triplexes. Emboldened by the experience, he began to build houses. However, as interest rates rose to unprecedented levels — causing a dramatic slowdown in the real estate market — the venture collapsed. In 1984, Smith declared personal bankruptcy. He has described this period as the toughest in his life — although he has also said he learned valuable lessons from that experience.

First National Financial

In 1988, Stephen Smith formed First National Financial, along with Moray Tawse, a manager at Guaranty Trust. Their office was atop a pub in the Yonge and Eglinton area of Toronto. Legislative changes in the 1980s opened the Canadian financial sector to more non-bank competition. Tawse and Smith partnered to sell blocks of mortgages originated by Guaranty Trust to select life insurance companies. In 1987, Canada Mortgage and Housing Corporation created National Housing Act Mortgage-Backed Securities (MBS). Spotting an opportunity, Smith and Tawse approached a life insurance company with a proposal to establish a corporation to specialize in MBS. The insurance company declined that proposal but encouraged them to establish a company to originate, underwrite and sell mortgages on a whole-loan basis — and offered to be their first customer.

First National was immediately successful in this environment, with approximately $200,000 generated in its first year by 10 employees. Its success was largely due to its competitively priced mortgages and use of computer programs to stay ahead of their rivals. An innovator in the use and development of information technology in the mortgage industry, Smith developed the mortgage software MERLIN, which became the industry’s leading mortgage approval and tracking software.

First National has grown to become Canada’s largest non-bank mortgage lender. Smith is a leader in the use and development of securitization (the transformation of illiquid assets into tradable financial assets) to finance mortgage asset growth. In 2017, First National surpassed $100 billion of mortgages under administration. At the end of 2022, First National surpassed $140 billion of mortgages under administration.

Financial Services Involvement

Under the umbrella of Smith Financial Corporation (SFC), Stephen Smith is co-owner of the Canada Guaranty Mortgage Insurance Company, a mortgage insurance provider, which he purchased from AIG in 2010. The company provides one third of all new mortgage insurance in Canada. In 2023, SFC paid $1.7 billion for Home Capital, a financial services company. As of 2023, Smith serves as chairman. Also under the auspices of SFC, Smith is the current chairman and co-owner of Fairstone Bank, a 240-branch consumer lender. Fairstone Bank is a combination of Walmart Bank of Canada, purchased in 2019 and Fairstone Financial (formerly CitiFinancial Canada), purchased in 2021. He is also chair and co-owner of Glass, Lewis & Co., a leading proxy advisor firm based in San Francisco, and chairman and a partner in Peloton Capital Management, a mid-market private equity firm specializing in the health care, consumer and financial services sectors across North America. In 2026, it was announced that Smith and SFC would purchase a 26.9 per cent stake in The Economist Group (TEG) from Lynn Forester de Rothschild. TEG is the parent company for the weekly news magazine, The Economist, which was founded in 1843. The acquisition is subject to closing conditions and approval from trustees.

Smith is also a board member of E-L Financial Corporation Limited and is largest shareholder of Equitable Bank, a publicly traded chartered bank.

Business and Social Responsibility Engagement

An advocate for the social responsibility of business, Stephen Smith is a member of the Business Council of Canada, an organization of business leaders that meets to discuss public policy issues including taxation, the environment, fiscal policy and monetary policy. He is also a member of the board of the Canada Infrastructure Bank.

A strong supporter of STEM education, Smith has also made far-reaching contributions beyond the financial services community. This is most evident in two precedent-setting donations he made to his alma mater in 2015 and 2023, totaling $150 million.

In 2015, Smith donated $50 million — the largest donation ever made to a Canadian business school — to Queen’s University to support business education. In recognition, the university renamed its school of business the Smith School of Business. His donation enabled new scholarships, faculty research chairs and professorships, thereby helping attract talented students and faculty. As part of his endowment, Smith called for “vigilant protection for the rights for freedom of speech, academic freedom, and freedom of research.”

Smith’s second donation in 2023, doubled the size of the that previous gift when he donated $100 million to the university’s faculty of engineering. In recognition, the faculty of engineering was renamed the Stephen J.R. Smith Faculty of Engineering and Applied Science. The university reported that Smith’s donation was the largest donation made to an engineering faculty in Canada.

These donations provide the most dramatic evidence of his commitment to Queen’s University and related educational causes but are nonetheless far from his first such actions. In 1997, he created an award for electrical engineering and economics students. The Stephen J. R. Smith Bursary rewards leadership, involvement and creativity and as of 2015 has helped more than 250 Queen’s students. He also funded a chair in public policy in the Queen’s Economics Department in 2013.

Community Involvement

Passionate about civic engagement, education, Canadian history and the arts, Stephen Smith is active in several cultural organizations. He is an honorary governor of the Royal Ontario Museum, a member of the board of the Rideau Hall Foundation, and board chair for Historica Canada, the organization that produces the Heritage Minutes and publishes The Canadian Encyclopedia. In 2014, Smith and his wife, Diana Blake, donated $3 million to help found the Museum of Toronto (formerly Myseum), an interactive online museum of the city of Toronto, which they have continued to fund ever since.

Smith is a director of the C. D. Howe Institute, an independent nonprofit Canadian research institute that promotes economically sound public policies. He was previously also vice-chair of Metrolinx Inc, the provincial crown agency providing public transit in the Greater Toronto and Hamilton Area.

Personal Life

A licensed pilot, Stephen Smith is renowned among friends and associates for his daredevil approach to his favourite sports, which include heli-skiing and long-distance cycling. As Charles Brindamour, president and chief executive officer of Intact Financial Corp. has said, “Stephen is a force of nature.”

Honours and Awards

• Entrepreneur of the Year, Ernst and Young Ontario Financial Services (2007)
• Queen Elizabeth II Diamond Jubilee Medal, Government of Canada (2012)
• Honorary Doctor of Laws, Queen’s University (2017)
• Companion, Canadian Business Hall of Fame (2019)
• Member, Order of Ontario (2025)