Evidence of meeting #217 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cppib.
A video is available from Parliament.
11:45 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
I was being overly generous to the government in giving them credit for your appointment.
11:45 a.m.
Liberal
11:45 a.m.
President and Chief Executive Officer, Canada Pension Plan Investment Board
We issue bonds to get to the right risk level that we think.... When we manage the portfolio, we target a level of risk for the portfolio that we think is an appropriate level of risk, and then we maximize returns at that risk level.
It allows us to have a very diverse number of investments across what are relatively low-risk investments—for example, real estate—or across infrastructure investments that are low risk, and then we can get the risk back up to the target risk level by using some leverage. That's what we're doing.
11:45 a.m.
Liberal
The Chair Liberal Wayne Easter
Okay.
We will go to Ms. Rudd, back to Mr. Kmiec, and then back to Mr. Fragiskatos. I don't know if Mr. Fragiskatos and Mr. McLeod can split some time so that Mr. McLeod can get in.
Go ahead, Ms. Rudd.
11:45 a.m.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
Thank you, Mr. Chair.
Thank you for being here.
One of the things that I think you, as an organization, are doing well is you're helping to educate people about what it is that you do. I think that up until fairly recently, the Canada pension plan was this thing that was over there, kind of behind a door, and we really weren't sure what it was all about. I think that Canadians have had an opportunity to sort of peek behind the curtain to ask for a list of what the investments are, to talk about returns and to talk about the 75-year horizon—not necessarily the methodology that will get us there, but the confidence that we'll get there.
That goes back to the public confidence piece, and I absolutely agree with you on that, Michel.
I have a couple of things. My colleague suggested that you were looking at things that were trendy. I hope that he's not suggesting that climate change is trendy, because it is one of the emerging themes that we're hearing from investment around the world, and you mentioned it in your remarks.
You also talk about the inaugural green bond. Can you tell us a little bit about what that green bond is, why you did it and what the results of implementing it have been?
11:45 a.m.
President and Chief Executive Officer, Canada Pension Plan Investment Board
Yes, with pleasure.
We issued the first green bond last year. It actually happened, I think, on the day I was here last year. We did a $1.5-billion Canadian bond issue, and we followed that up with a euro issuance. What we're using it for is to fund investments in qualifying areas of our investments. Renewable power is one example. We used it to fund a number of our renewable power investments, both in Canada and around the world. LEED-certified, green-certified buildings also qualify, so a portion of our real estate portfolio can also qualify for that type of investment.
We were very pleased with both bond issuances. They were very well received around the world. There's a lot of money that's dedicated to green finance investment, so it's something that we will probably continue over time.
May 30th, 2019 / 11:50 a.m.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
Thank you for that.
I just returned from three days at the Clean Energy Ministerial, CEM10, which just wrapped up. Twenty-five ministers from around the world came to talk about clean energy, and of course a lot of the conversation was around climate change. As Canada was hosting this year, what we did was bring in 70 young people so that we could listen to them and their concerns about climate change, their concerns about government and businesses and how we are recognizing that risk, and how we are addressing it in a way that will ensure that they have infrastructure and other things that will withstand what we know is going to be a challenging time.
The Insurance Bureau of Canada has said that last year there was $1.8 billion in insurance-related payouts related to climate change.
You talked a lot about infrastructure. Can you talk a little bit about how you actually factor that risk into what you're doing, particularly with regard to infrastructure, because infrastructure is a huge piece of your portfolio?
11:50 a.m.
President and Chief Executive Officer, Canada Pension Plan Investment Board
Yes, it's important, not just because it's a large part of our portfolio—infrastructure is about a $33-billion investment—but also because it's a super-long-term investment, so we have to consider the types of changes that can happen over the longest period of time. It's something that we look at and examine.
I'll say that there are a whole raft of issues that we look at. It could be physical changes that will happen to the assets that we're investing in or it could be technological change. For example, electricity grid investments that we have around the world could be disrupted by more local power generation, rather than everything coming from one central power station. That's something that we have to be aware of as storage technologies improve. We anticipate that they're going to grow at a very rapid rate. We anticipate that storage is going to grow five times in the next five years, for example. It's the fastest-growing part of renewables. That can disrupt a lot of what we thought were more stable, long-term infrastructure investments around the world.
It's a really complex and multi-faceted area that we look at, but we look at every single investment on that basis.
11:50 a.m.
Liberal
11:50 a.m.
Liberal
The Chair Liberal Wayne Easter
Yes.
We'll go to Mr. Kmiec, and then back to Mr. Fragiskatos and Mr. McLeod.
11:50 a.m.
Conservative
11:50 a.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Thank you very kindly.
How much was the ad buy for the NFL playoffs in January?
11:50 a.m.
Senior Managing Director and Global Head of Public Affairs and Communications, Canada Pension Plan Investment Board
The total was $300,000. For clarification, we never acquired any time on any NFL game. As part of the rotation that networks would do, it was a freebie. What we did—
11:50 a.m.
Senior Managing Director and Global Head of Public Affairs and Communications, Canada Pension Plan Investment Board
It was the Canadian NFL broadcast. It didn't broadcast in the U.S.
11:50 a.m.
Conservative
11:50 a.m.
Senior Managing Director and Global Head of Public Affairs and Communications, Canada Pension Plan Investment Board
We targeted demographics, meaning that we looked at programs and channels where we would hopefully achieve a greater number of millions of Canadians.
11:50 a.m.
Senior Managing Director and Global Head of Public Affairs and Communications, Canada Pension Plan Investment Board
I have the impressions number. It's into the tens of millions. I'm more than happy to provide that.
We were very pleased with the reach.
11:50 a.m.
Conservative
11:50 a.m.
Senior Managing Director and Global Head of Public Affairs and Communications, Canada Pension Plan Investment Board
We could give it to the clerk today.
11:50 a.m.
Conservative
11:50 a.m.
Senior Managing Director and Global Head of Public Affairs and Communications, Canada Pension Plan Investment Board
That's a hard commitment.
11:50 a.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Sorry; you sound very reasonable, but the CMHC keeps telling me they'll give me stuff, and then they don't give me the things they agree to at the committee.
You seem reasonable. I'm going to take you at your word that you'll give it to me today by the end of the business day.