Rather than tackle the pressing question as to why pension funds have decreased the their investments in Canada from 28% in 2000 to 3% today, a gaggle of milquetoast business leaders is demanding that Ottawa force those pension funds to invest within Canada despite lower returns. It’s as if these Wesley Mouch types believe that a depressed business climate is an unalterable fact of nature.
Government has the right, responsibility and obligation to regulate how this savings regime operates,” says the letter signed by dozens including BlackBerry Ltd founder Jim Balsillie, Metro Inc. chief executive Eric La Flèche, the CEOs of telecommunications companies Telus Corp., Rogers Communications Inc. and Quebecor Inc., and former Bank of Nova Scotia and Air Canada CEOs Brian Porter and Calin Rovinescu.
“We think the government does have some right to have an influence over the regime” in which these large funds operate, he said. “But we’re not suggesting the government tells these pension funds exactly where to invest.”
Trying to force these corporations into bad investments like our current politicians have been doing with a technology that is inferior and dangerous in Canada.
AC to DC energy isn’t advisable as wires need to be much denser.
Pickles anyone?
Would any sane person invest in a shithole ?
Between Indigenous Land Claims and a sudden Endangered Species complaint, you can loose everything investments.
Can’t even lap our trees which aren’t killing them…
Look at areas totally flattened in the World Wars and the trees are all regrown and healthy.
And yet our politicians and government keep protecting more land that we haven’t even used or even explored.
Look at the list of the business leaders arguing for this change. If Canadian pension funds are forced to invest more of their assets in Canada – the supply/demand for their companies’ share prices will increase due to the additional supply of capital trying to purchase Canadian shares. And which of this list of business leaders will get gob-smacking sized bonuses due to these increases in share prices – without them having done anything to make their company more valuable. A case of self-interest (and self-wealth-generation for these executives, perhaps)?
I think that is the point of the request, create a captive source of cheap capital.
There was a 30% foreign limit on registered money the Liberals removed that in 2005.
I increased my foreign investments in Feb. 2022.
Wesley mouch is an apt description.
The CPP is creation of the federal government but the money belongs to Canadian employees and retirees who contributed to the CPP. If it’s going to become yet another slush fund for the Trudeau government to hand out to consultants and corporations who pay lobbyists to “convince” the federal government to give them our pension money…then that’s a really good argument for provinces to move their share of the CPP out of federal control.
Everyone who is not hopelessly naive know that the Trudeau government will, in addition to kickbacks for themselves, use the CPP as a political tool to reward their friends and punish their enemies ( Alberta and Saskatchewan) if this CPP policy goes through. The Trudeau Liberal-NDP government has corrupted every institution and program they’ve touched. They cannot be trusted.
Your comments are spot on, but this is about private pensions. Do you remember when RRSP’s had foreign content limits? They want to go back to that world.
Could have sworn I read the enhanced CPP fund was, by policy, investing more heavily in Canada than the main CPP investment fund and that the returns were significantly lower in the enhanced fund.
But, point taken, at the moment Canadian corporate welfare queens appear to be lobbying for the federal government to interfere in private pension decisions.
This is what I read about the enhanced CPP (and the source of my error):
“Lest there be any doubt, the Canada Pension Plan Investment Board has (inadvertently) been running a natural experiment. The board administers the assets of the base CPP and the enhanced CPP – the top-up pension plan launched in 2019 – separately. The enhanced CPP has a much greater Canadian weighting; the strategic portfolio framework envisions it with 44 per cent of assets in Canada compared with just 8 per cent for the much larger base CPP. (The actual weighting for each isn’t disclosed.)
And what has been the result of that natural experiment? As of the end of fiscal 2023, the base CPP had a five-year net return of 8 per cent. The enhanced CPP had a significantly lower net return of 5.6 per cent. Or to put it another way, the plan heavily weighted to Canada did only 70 per cent as well.”
https://www.theglobeandmail.com/opinion/editorials/article-handcuffing-pension-funds-is-not-the-answer-to-canadas-economic-woes/
The same rent seekers that decry fleeing capital likely consider ESG the Holy Grail. Capital is being directed at “clean” big tech with earnings in the 50 to 100 times price while the Canadian Oil and Gas and Mining sectors with PEs under 10 languish.
“Corporate Welfare Bums”, as former federal leader NDP David Lewis – who I can’t believe I’m quoting (but these are strange times) – once said.
This is pure “Pension Fund Socialism” as the late great Peter Drunker wrote about
Behind virtually all Canadian MSM-lauded “National Champion” is a uncompetitive, rent-seeking, taxpayer-fleecing, subsidy-sucking corporatist parasite, wrapping itself in the flag and pleading poverty and oppression. And it dovetails nicely with how many of the more “pragmatic” Liberals think, and far too many Conservatives as well.
Re: Jim Balsillie (a buffoon whom I thought we’d heard the last of), short the stock of any company whose CEO is spending his time trying to buy a hockey team while Steve Jobs is in the process of eating the former’s lunch. Please DO shut up Jim.
*Peter Drucker
yep. one thing D Lewis got spot on. the tax breaks shyt is STILL going on.
a ballyhooed EV battery plant that ‘creates zhobs’ to the tune of some ridiculous
1/4 mill apiece or whatever.
Why invest in a country that despises private investment? Government spending money is not investment, it is stupidity because there is NO ROI and it is always ideologically driven without reason or logic. Whenever a politician starts down the “investing in Canada” crap in a public speech, they should be shouted down until they leave the stage because it is a lie. Start calling out the lies and they will stop talking. We are being too damn polite.
Beg to differ, Codex, not ALL government money is ideollogically driven; a lot is driven by graft.
This is exactly the model the politicians in Quebec have forced on the Quebec Pension Plan (Quebec’s version of the Canada Pension Plan), and that is why the QPP is forced to invest in government boondoggles like Montreal’s light rail system (the REM):
“The cost of Montreal’s new light-rail train network has risen from $6.3 billion to just under $8 billion, an increase of 26 per cent since 2018.
CDPQ Infra, the developer of the Réseau Express Métropolitain (REM) and a subsidiary of Quebec’s pension fund manager, the Caisse de dépôt et placement du Québec, provided a project update on Wednesday.”
https://www.cbc.ca/news/canada/montreal/rem-reliability-update-service-south-shore-brossard-1.6965566
EXACTLY! Because sane market forces would not go near any of these potential statist/corporatist boondoggles, politicians with a “edifice complex” not to mention all the “capitalist” (snicker) private sector firms looking for fat, marginally-accountable government contracts (I won’t name names but many come to mind), positively wet their pants over the prospect of public sector pension funds being magically transformed into fat, captive piggy-banks.
In the same way, politically-compelled non-market demand for the shares of our uncompetitive, rent-seeking, taxpayer-fleecing, subsidy-sucking “National Champions” would inflate their share prices beyond market levels (remember: executive comp. is tied to share price) and would greatly reduce the need for large sections of Canada’s big-fish-in-a-small-pond Managerial Class from having to do such pesky things as well, creating actual shareholder value.*
*Unless you consider rent-seeking at the collective expense of the entire nation “creating shareholder value.” Some might.
Eric: thanks for all those important additions.
When I lived in Montreal many decades ago, the name used (in English) was “Quebec Inc.”. It described the incestuous, cartel-like relationship among the province, its crown corporations (e.g., Hydro Quebec) and French-Quebec based companies (e.g., Videotron) to provide each other with preferential treatment and exclude any companies owned or controlled by English-speakers. It has continued to expand over the years (adding the Quebec Pension Step was a major step), and is now central to economic life in Quebec.
Good God Government has the right, responsibility and obligation to regulate how this savings regime operates,
Pensioners would be broke in a week.
Canada’s stock market is less than 3% of the world’s market. Why would you limit yourself to 3% of investments? Portfolio diversity means less risk.
Every time I think the country can’t get any shittier, something new comes along with yet another coil.
Why would anyone want to invest in Canada with the communist in charge? I invest the max the bastards allow me outside of the country.
Classic case of rent seeking in a crony capitalist regime.
The unholy trinity: Big Business, Big Unions, Big Government.
Not that long ago, in the good old days, they hated and mistrusted each other. And now they’ve teamed up to rob us, jab us, and jail us,