QUESTION PERIOD — Finance
Canada Pension Plan Fund
May 12, 2022
Honourable senators, my question is for the Government Representative in the Senate.
Senator Gold, I would like to address the lacklustre performance of our Canadian pension funds in investing in homegrown talent and businesses. Thanks to research conducted by the global investment management firm Letko Brosseau, I was recently made aware of the fact that in 1990 Canadian-listed companies and equities accounted for nearly 80% of Canada pension fund equity investments. By 2020, this proportion had fallen to only 10%. Our colleague Senator Gignac recently came out publicly on this issue, and I support his views on the matter.
This is a concerning trend that deserves some attention. If pension funds were to inject billions of dollars into Canadian companies at a greater rate, it would have the potential of increasing productivity and growth, accelerating technology, fuelling competition, attracting further investments and, perhaps more importantly, help raise the standard of living of Canadians.
Is the government aware of the current situation, and has it engaged with Canada’s major pension funds to find ways to increase private capital investments at home without necessarily regulating free enterprise?
Thank you for the question. The Canada Pension Plan Investment Board, or CPPIB, is an independent body that makes its own investment decisions. The CPPIB operates at arm’s length from both federal and provincial governments and has a mandate to invest Canada Pension Plan funds in the best interests of the 20 million Canadians who contribute and benefit from that plan. Importantly, as affirmed in the board’s 2019-20 report, the Canada Pension Plan remains secure, and the resilience of the fund should give Canadians confidence. The plan continues to meet its performance objectives and provides a foundation for retirement for Canadians, even in these times of unprecedented uncertainty.
I would like to pursue this further. I really think the government needs to properly assess the situation, find out why Canadian pension funds are reluctant to invest and what winning policies can be implemented while respecting the idea of free markets. What tool does the government have to further incentivize pension funds to invest in made-in-Canada businesses? Is the government considering making changes to the regulatory landscape that private pension funds must adhere to?
Thank you for your supplementary question. As I indicated, the CPPIB is an independent institution, and part of its effectiveness and long-term stability requires that it be independent. However, the government has and will continue to consider the many different ways it can support Canadian businesses and is grateful for the senator’s continued advocacy on this issue.
