Finance committee  Canada is very particular. Other countries have not had to address it to the extent that Canada has. As I said earlier, domestic equity exposure as a percentage of overall equity exposure in Canada is the lowest compared to anywhere else in the world. Australia's is about 50% and the U.S. is at about 80%, so this is a Canadian problem.

Finance committee  As I think we outlined here, it can be done through regulation. We can incentivize certain behaviours and disincentivize other behaviours by this reserve system. It's quite simple. It's quite analogous to what's being done in the banking industry and in the insurance industry. There are precedents for this.

Finance committee  Just on this indexing, 3% is correct. That is what's being used by the international actuaries to say what a diversified global market is. The problem with this is that it means that if you're a small country, you shouldn't invest in yourself. If you're a big country, you should.

Finance committee  There's been a really large shift in the coverage of people by pension plans in the private sector. In the public sector, there's definitely a big increase, but in the private sector, there's a big decrease. It has a lot to do with the way the regulations have changed to shorten the investment horizon of the valuation of these funds.

Finance committee  Probably not.

Finance committee  Okay. If you have $100 to invest, do you invest it in Canada? You're not looking at your liabilities. You're either in solvency or a going concern. They are what they are. You look at your assets. With $100 invested in a Canadian company, your assets are valued at $100. For $100 invested in an Indonesian bank, you cut it to $80.

Finance committee  I agree that investment is fundamental to the vibrancy of the country. Canadian pension funds leaving Canada is not a good sign. It's bad.

Finance committee  Canada distinguishes itself on being the developed country that invests the least in its own economy. Canada would be.... Let's say I take this 10% number. In Australia, for example, which would be a comparable country, it would be close to 50%. In the United States, which is one of the most developed successful economies, it's around 75%.

Finance committee  That's how life goes. It's not my fault. The solutions at that time were very stipulative. You had to do this. You had to do that. They were things like this. Now we're in a much more fluid world. I don't think we should go back to the strict stipulations. One way of doing that—and I think it can all be done by regulations—is to introduce a concept of reserves.

Finance committee  Okay. Basically, it's a system of reserves. I can go into more detail in our documents and things like that.

Finance committee  Thank you for inviting us this morning. We want to talk to you about pension funds, which represent 36% of institutional savings in Canada, only slightly less than the banks. We're talking about a very large pool of capital. Pension savings and how they are invested have been subject to major transformations over the last 30 years.