Finance Committee on April 16th, 2026

[The Chair, Liberal, Karina Gould]

Good morning. I call this meeting to order.

Welcome to meeting number 33 of the House of Commons Standing Committee on Finance.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

Before we continue, I would ask all in-person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio and feedback incidents, and to protect the health and safety of all participants, including the interpreters. You will also notice a QR code on the card, which links to a short awareness video.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, March 9, 2026, the committee commenced its study of Canada pension plan investments in Canada.

I would like to welcome our witness. We have Mr. Michel Leduc, senior managing director and chief public affairs officer with the Canada Pension Plan Investment Board.

Welcome Mr. Leduc. You will have up to eight minutes for your opening remarks, after which we will open the floor to questions.

[Michel Leduc, Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board]

Thank you very much.

Thank you for inviting me to testify today on behalf of CPP Investments.

Policy-makers are understandably focused on how pension funds can support prosperity at home. The job Parliament and the provinces gave us to help secure the retirement income of the Canada pension plan's contributors and beneficiaries defines our role in this discussion.

While Canada is a core market for CPPIB, it represents about 3% of global investable markets. Still, the size of our Canadian holdings is many times that share. It's relevant to note how CPPIB was born out of a crisis. In 1995, the chief actuary of Canada reported that the CPP was no longer financially sustainable. Canada was an aging society with longer lifespans and fewer children. Combined with weak investment returns, the fund would be depleted within two decades.

Federal and provincial governments acted decisively. They established the CPPIB to deliver the highest possible rate of return without taking excessive risk. In doing so, we must also consider the factors affecting the funding of the CPP.

Today, the CPP is sustainable for at least the next 75 years. The CPPIB is one of the world's best performing institutional investors, and our investment income has proven critical to the CPP's success.

Canada, unlike many other countries, is not facing a looming pension crisis. This does not mean the CPP's solvency has been forever solved. Yes, the fund is approaching approximately $800 billion today, but that's only one half of the balance sheet, the assets. The other half, the liabilities, are roughly double at $1.7 trillion. In other words, the assets are already spoken for. There is no surplus available to use for anything other than to meet the obligations owed to the beneficiaries.

The CPP fund is composed of contributions and investment income. Investment income is the single largest contributor to the growth of the fund. Contributions depend on a complex mix of economic and demographic factors. Added together, these have a greater impact on the CPP's long-term sustainability than investment income alone.

The common feature across these non-investment factors is that they are entirely made in Canada. It's one basket holding all the eggs. As a result, we have a responsibility as prudent investors to place at least some of the eggs in the global basket. Diversification is necessary and the only opportunity is through investments, not the contributions. Not doing so would significantly increase concentration risk within Canada's national pension system.

Managing volatility requires uncorrelated exposures across developed and emerging markets and divergent sectors. A well-balanced portfolio can better withstand market shocks to meet obligations to Canadians at any given time.

That's about managing downside risk. We must also pursue the upside.

We must invest worldwide to maximize growth.

When you factor in the role a pension system plays in the economy, the most powerful contribution we can make is to help prevent poverty among the nation's largest demographic cohort. Investment income that we generate globally is ultimately paid out to Canadians, supporting retirees in their communities across the country. Their contributions are transformed into much larger profits, which are then recycled back into the Canadian economy.

What have made CPP Investments a global leader are our public purpose, focus and clarity. Our purpose is to help Canadians maintain basic dignity during their most vulnerable years. Our focus is to deliver strong returns over the long term. Despite external pressures to do other things, our job is clear. By design, we are not a sovereign wealth fund, a development bank, a social-cause vehicle or an innovation venture. Had finance ministers intended for us to invest in wider goals, the CPPIB Act would reflect that. Legislators debated this carefully and concluded what our sole objective should be.

Of course, policy priorities change over time, and those decisions rest with Parliament and the participating provinces. Our role is to offer perspective on what has made CPP Investments successful in strengthening the Canada pension plan.

I will be happy to answer your questions.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leduc.

Mr. Kelly, you have the floor for six minutes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you.

I was pleased to hear clarity around the purpose of the CPPIB. Again, for the record and for clarity, your job is to achieve the highest and best returns for Canadians at reasonable risk—period. There's no other purpose.

[Michel Leduc]

That's absolutely correct.

If I could add this, there's an additional line that talks about taking into account the factors that affect the funding of the CPP. That means we have to consider the concentration risk to Canada, because some of the factors that affect the CPP are not investment income. They're demographic and economic factors. This is why we interpret it to mean that we must solve for concentration risk, and it's why we need to look at the universe of assets.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

That's right. It's because your liquidity, at any moment, has to be considered based on the timing of your liabilities and the amount of pension that has to be paid out.

I'm glad to have this clarity because we hear voices, from time to time, saying things like, “Why doesn't the CPPIB invest in Canada?”, “Shouldn't they invest more in Canada?” or more chillingly, “Should they be compelled to invest more in Canada?”

Could you talk about the importance of the independence of the CPPIB and the peril of politicians or anybody else—though it would be politicians having to do this through legislation—undermining that independence?

[Michel Leduc]

There are a number of things to unpack there, and I think they're all important. I want to respect the time you have, so I'll answer some of them. I'm sure there will be opportunities throughout these two hours to reflect on some of them.

If I could address the premise directly, when we hear, “Why don't we invest more in Canada?”, it often comes with the belief or perception that we do not invest considerably in Canada. I think this is a good opportunity to break that myth. We are one of the largest investors in the Canadian economy, at above $115 billion. Very few institutional investors have as much invested in Canada as we do. We do it because it's a wonderful place to invest.

The point about independence is critical on multiple fronts, including our ability to access global markets. If we were seen to have different non-commercial objectives—perhaps national interest objectives—it would make our life a lot more difficult regarding accessing prized assets around the world.

I will leave it at that. If there's a follow-up, I'll be more than happy to address it.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

In your remarks, you said that you face—I wrote it down—“external pressures to do other things”.

What are those pressures that you are exposed to?

[Michel Leduc]

One of the privileges that I have in my role is to appear before public meetings, so every two years we have to hold a meeting in every participating province. Leading up to those meetings, because we have to advertise them, they engage a lot of interest in some of the things that we invest in.

Across the board, one of the single issues that is particularly top of mind for many of our contributors and beneficiaries is climate change. That would be one. We hear a lot that we ought to be divesting from conventional energy. We get a lot of reaction. That would be one of them. Another one is the perspective that we ought to be investing more in Canada. We ought to be doing things here to create jobs. That would be another one. There are things around our exposure to defence sectors. A number of interested parties feel that it's against their values. That would be another one.

The list goes on. Because of the size of our investment and the need to diversify, we're exposed to every conceivable sector. That means some individuals and groups have concerns around some of those exposures.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Right. I'm pleased to know that I'm receiving reassurance that, for all these voices, regardless of their political or public policy preferences, you set this aside and ignore it, because by taking any of these considerations into account would jeopardize your core mission, your only mission, which is a return for future Canadian recipients of the CPP.

[Michel Leduc]

If I may, I may just say it a little bit differently. We will listen—

[The Chair, Liberal, Karina Gould]

Go ahead very briefly.

[Michel Leduc]

We have public accountability, so we listen carefully. However, we have to have the resilience against this pressure and do what Parliament and the provinces asked us to do, which is to save the solvency of the CPP.

[The Chair, Liberal, Karina Gould]

Great. Thank you very much.

Just to clarify, Mr. Leduc, did you say it was $115 billion or $150 billion that's invested in—

[Michel Leduc]

Currently, it's about $117 billion.

[The Chair, Liberal, Karina Gould]

Thank you very much.

Next, we have Mr. Leitão.

You have six minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

I will yield my speaking time to my colleague.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks.

Welcome, Mr. Leduc. It is great to have you here and great to hear about the CPP Investment Board's mandate and purpose.

I think we can all agree we want to see the Canada pension plan do well for Canadians because so many Canadians have a stake in your success. I, for one, wish you always the very best. As a government, we've been trying to improve investment conditions in Canada, so it's not to take the approach that we should be forcing pension plans to invest more in Canada, but we should actually be working in partnership to improve the environment for capital to flow to major projects, for example, for infrastructure that our country can benefit from.

We've heard anecdotally from John Graham and others publicly in statements that there's a lot of interest from global investors in Canada. We just heard from the group of pension plans in Australia who said they're excited to invest, alongside Canadian pension plans, in major infrastructure projects, etc.

How is the outlook in Canada changing for you? How are you evaluating, because you're weighting your portfolio right now? You have 12% in Canada. You've said that it's weighted significantly towards investing in Canada already. Do you see the outlook as having improved in Canada for you? It seems that anecdotally other investors see it that way.

Could you speak to that?

[Michel Leduc]

Absolutely.

Looking at what is going on, as a global investor working hard to deploy capital in core markets, we have investments in approximately 55 countries, but about a dozen countries are truly our core markets. As we look at the added global uncertainty and turmoil, everything is relative, and Canada is in the right place at the right time. What it offers to global investors is a greater level of safe haven, so it has a terrific opportunity to attract greater levels of global capital into this country. We see it. We see a level of momentum that we haven't seen in a while, and we're very excited about the opportunities.

I will say, without getting into any level of detail, because that would not be appropriate in terms of the confidentiality of some of the things we're looking at, there are a number of things that we're looking at across the full spectrum, from energy to digital infrastructure and regulated utilities.

We are actually investing more in provincial bonds. We don't take credit for it, but the amount in provincial bonds we've been acquiring is what pays for infrastructure across the full value chain, from the medical sector to education to better roads. We would love to put our sign on all of those things. Obviously the provinces are the ones making those acquisitions or those investments, but they're funded by our bonds. We have a lot of confidence in Canada. We're excited about the opportunities and we're working hard to look at those and execute on those opportunities.

[Ryan Turnbull, Liberal, Whitby, ON]

I appreciate that.

I have a quote here from John Graham, who said, “We like to see opportunities of scale, we like to see opportunities where we can grow our capital,...we are really encouraged by what we’re hearing and really encouraged by the major projects initiative.”

What is it about the major projects initiative that improves the conditions? I had heard, again, for many years, that big projects were hard to get approvals for. There's quite a lot of red tape around getting those approvals, and we've made an effort to really speed that up. Is that improving?

[Michel Leduc]

We've had some preliminary conversations, and we see it as a facilitator or, for lack of a better expression, a clearing house to help. In some of these complex potential opportunities, whether it's in infrastructure or on the energy front, there could be multiple regulatory aspects, there could be permitting or there could be different levels of risks that we couldn't necessarily handle on our own without some additional assistance.

If you think of all the moving parts, it's about having a group that is focused on trying to connect all the dots and move something that sometimes could take multiple years to get done to multiple months. If that level of energy could be applied to making things more predictable, more stable and more timely, it would mean a lot of value for our global investors.

[Ryan Turnbull, Liberal, Whitby, ON]

I read the International Centre for Pension Management reports and things like that, which, internationally, are looking at the challenges that pension plans have. They identify key barriers and things that governments can do.

One of the things that is often said is that there are a lot of small projects that cannot be aggregated to the degree that maybe a pension plan as big as the CPPIB would need in order to make an investment decision, so aggregation is one thing.

What I'm wondering is this: Are we doing a good enough job at that? Are there any ways we could improve as a government to facilitate more aggregation?

[Michel Leduc]

We see ourselves as a commercial entity, and operational excellence is a cornerstone of how we continue to invest for Canadians—

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leduc. We'll have to continue this conversation in the next round.

Mr. Garon, you have the floor for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you very much, Madam Chair.

Good morning, Mr. Leduc. Thank you for being with us today.

The federal government has decided to get involved in the Alto high-speed train project. We recently met with representatives from the Canada Infrastructure Bank, and I asked them whether they planned to invest in the project. They told me that the project was not sufficiently developed and that the information was not clear enough for the bank to decide on whether it was interested in investing money in it.

Where does the Canada pension plan stand on this issue?