Finance Committee on April 16th, 2026

[Ryan Turnbull, Liberal, Whitby, ON]

Does it help aggregate?

[Michel Leduc]

It does. It's a good program.

[Ryan Turnbull, Liberal, Whitby, ON]

That's great to hear.

I wanted to go back to a question that Mr. Kelly posed to you about ESG and the correlation challenges there, which I think are well known globally.

That's exactly why groups like the international sustainability standards board, which is a branch of the International Financial Reporting Standards Foundation, is doing such great work to create a global standard for sustainability reporting, including climate disclosures. We've seen from the latest data that over 60% of the world's GDP is already aligned with ISSB standards. We also see that the latest data shows that 93% of Canada's non-U.S. trade partners, which we're deepening trade ties with, are already aligned with ISSB standards.

Getting back to my previous line of questioning about taxonomy and disclosure, I see disclosure as essential for market transparency. We've seen reports recently that say that if we want to give access to lower-cost capital, markets restructure themselves whenever there's better transparency, more data and standardized data consistently available.

Would you agree that ISSB standards and climate disclosures are going to be helpful in ensuring that there's enough reward for those performers out there?

[Michel Leduc]

We're a little bit concerned around false perfection in trying to achieve the best possible standard in understanding the difficulties in multilateralism in these bodies and trying to arrive at.... What we would say is that hopefully it's as competent as possible, but having any global standard is better than not having any.

It's critical for global investors, because we don't have control over, for example, carbon intensity. It resides in thousands of different companies. Our ability to measure the risks that we hold in the portfolio requires good measurement and consistent measurement, so that we can be transparent with our stakeholders year after year.

[Ryan Turnbull, Liberal, Whitby, ON]

Fair enough. What we've heard from asset managers.... Many of the big banks are also asset managers. They have whole divisions. They've said that a lot of the data is not currently available and they have to supplement that with estimates. It's not actually verifiable data; it's estimates.

To my mind, if we have climate disclosures and sustainability disclosures eventually, there's going to be a lot more verifiable data that's accurate that you can then use to weight your portfolios, manage climate risk, etc. I assume that's only going to improve your governance in terms of making investment decisions—would it not?

[Michel Leduc]

That's absolutely correct. It would also manage risk in a way that is much more precise. As the global transition continues at its pace, we're able to have a better line of sight as to how we measure up against that pace.

Consumers and corporations making different decisions, how technology is having an impact and global regulatory changes—those are the forces that are going to move the planet to low-carbon situations.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you.

[The Chair, Liberal, Karina Gould]

Colleagues, we have time for one more round.

We have Mr. Kelly.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thanks.

Earlier you spoke of the five must-have criteria to make something investable by the CPPIB. You said that the first one was predictability. I took that to mean, when we were talking about project investment approval, predictability of the rules or the governance structures into which you would be proposing investment.

Over the last 10 years, we have seen exactly zero pipeline proposals in Canada, despite overwhelming global demand for Canadian energy. We hear repeatedly that it is the uncertainty and the unpredictability of the regulatory environment in Canada that is the chief barrier to companies like Enbridge or like TransCanada, as it was formerly known, to actually invest and be prepared to put money at risk to build in Canada.

We're in a productivity crisis. We're two years into the deputy governor of the Bank of Canada's break-glass emergency speech. What can you say about the necessary policy conditions and government actions that need to be taken to actually have a predictable system to make the Canadian economy investable for large projects?

[Michel Leduc]

Maybe I could provide more specificity around that category, which is the first one I mentioned, to be a little bit more concrete in terms of what that looks like.

The regulations are very clear, but they're also applied consistently—that would be one of the first elements out of that category. Another is that there is a very low risk of abrupt policy changes. We've seen that around the world. We buy something, we have a base case, we've calculated what the rate of return will be over a 10-year period, and then there's a change and the entire base case flies out the window.

There are independent regulators. If you have clear regulations and they're applied and administered by a regulator, and they're subjected to a level of political interference, you can't really count on the clarity if they are applied differently.

The fourth one is respect for contracts and property rights. The risk of appropriation can be high. If you've negotiated a contract with a third party, it should be respected—or a contract with the government, for example, if it's the client.

Those are the things we look for.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

That's great. You listed several really concrete reasons why specific projects were abandoned over the last 10 years.

The solution the government has offered, through legislation that passed with Conservative support, to allow the government to suspend its own laws to approve projects doesn't really speak to stability or predictability. It is, specifically, political interference. It gives the minister the power to make a political decision favouring one project over another.

Would it not be a better approach to actually repeal the laws that have been cited as barriers to investment, rather than to simply give the minister the power to selectively apply the law?

[Michel Leduc]

I'm not close enough to that situation to give an opinion on taking one policy direction or the other. However, I think some of my comments on what would be the ideal scenario are pretty concrete and specific enough.

For us, it's the policy implementation. You could create a policy framework that, on the face of it, looks wonderful—it makes a lot of sense and has a lot of integrity—but it ultimately comes down to the real world and how it's executed. It's a bit like a commercial entity, like CPP Investments. Strategy is important, but it all comes down to execution in a consistent way to achieve the goals you have set out to achieve.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leduc.

Thank you, Mr. Kelly.

Go ahead, Monsieur Leitão.

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

Thank you, Madam Chair. I will be sharing my speaking time with my colleague.

Since this is our last turn, I'll be quick.

I would like to continue with what we were saying before about provincial utilities. The provinces have massive investments planned over the next 10 years or so to expand capacity. Again, we know about Quebec, but the others have plans too.

The CPPIB would consider participating in that, but I think it's mostly through debt, so buying bonds from Hydro-Québec and things like that.

[Michel Leduc]

Speaking to climate change and the whole-of-economy transition, electrification is obviously critical to that transition. We are very interested in regulated utilities, and we would not rule out equity positions. We would not rule out being an active owner in that space.

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

That's interesting. The CPPIB would look favourably upon being an equity participant in Canadian public utilities because, I would assume, among other things, when you talk to your counterparts elsewhere, they're also interested in doing that.

[Michel Leduc]

Yes.

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

Okay. That's where I wanted to go.

I think my colleague also has questions.

Thank you very much for your participation.

[Ryan Turnbull, Liberal, Whitby, ON]

I was going to ask, Mr. Leduc, before our time runs out here, about renewables. You mentioned conventional energy and renewable energy. I'm seeing opportunities for a transition investment as well, but we covered that a bit.

The economics of renewables globally have really shifted with the cost per kilowatt hour having come down quite considerably for renewables. We see the uptake in many countries around the world, such as Spain, China and India. Pretty much everybody is deploying renewables at scale.

Does the CPPIB see itself as participating in that side of the transition? Can you speak to any opportunities that you see?

[Michel Leduc]

For sure. Over the last five years, we've made some very major investments in renewables on the global.... Admittedly, though, it's slower in the U.S. There's been a policy change around the ability to make investments in renewables, but elsewhere it's quite innovative.

Wind turbines in the Mediterranean, off the coast of Provence, are, ironically, using the same technology as the oil rigs you see in the sea. They're floating. These wind turbines are actually floating right off the coast of Marseille. We're a significant investor. It's innovative. It's one of the new things that have happened, and we're looking at opportunities to scale that up elsewhere.

[Ryan Turnbull, Liberal, Whitby, ON]

I have a last question, if I can sneak one in.

The investment pipeline, certainly in Canada, must have improved with the major projects.... Contrary to some other comments that were made here today, I see our government designating national interest projects that are in the public interest but also basically changing our legislation with Bill C-5 in order to be able to streamline that process, really reduce those times and have scalable projects for institutional investors like you.

Has that dramatically improved the investment conditions?

[Michel Leduc]

I would say it's a duality of things. You're not going to find something unless you're looking for it, so when I've painted the picture of global turmoil, seeing us as a global investor and looking for those safe harbours, we're looking harder deliberately, consciously, at the Canadian market as an investor.

We're seeing things that we had not necessarily seen before. Also, we're sensing that there is a palpable momentum that is providing a catalyst for us to be encouraged to not only look and to identify but spend the money to do the due diligence. It's costly to look at something for, say, six months and have conversations with all the stakeholders just to see that it won't happen. That's the opportunity cost that we could have spent on that team by deploying them in another part of the world. Having that certainty that maybe something will come out of it is obviously an important catalyst for us.

[Ryan Turnbull, Liberal, Whitby, ON]

I'm sure that moving the timeline from five to seven years down to two has to improve things dramatically in how—

[Michel Leduc]

It makes a big difference and builds global credibility.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leduc.

Thank you, Mr. Turnbull.

Mr. Garon, you have the floor for two and a half minutes.