Evidence of meeting #33 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was investments.
A video is available from Parliament.
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
I don't believe we've done an in-depth study on the project. In general, we don't publicly discuss the details of the types of investments we make. It's certainly confidential. However, I believe that—
Bloc
Jean-Denis Garon Bloc Mirabel, QC
You don't have to discuss it in public.
Are you confirming for us that you have not done any studies on the project?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
No, we have not done any studies on that particular project.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Okay.
I don't really sense much enthusiasm from you, judging by your body language.
I have another question for you. I must say it's a bit unusual for a Bloc Québécois MP to welcome you today. As you know, we have the Caisse de dépôt et placement du Québec, or CDPQ. We have a hybrid system. Quebec has its own share. That said, I have a question about some of the more structural aspects to ask you.
At the federal government level, obviously, we have several pillars for retirement. We obviously have the Canada pension plan. We also have the old age security pension and the guaranteed income supplement.
We know that having prefunded retirement benefits has a significant effect on the economy. Even though the investment rate in Canada is 12%, if we had more money to invest, we would have a significant impact on the economy. We could have mechanisms to ensure that these benefits become real investment-based pensions, and perhaps Quebec could even manage its own share of these pensions through the CDPQ.
I know you won't give a specific opinion on the matter, but in your view, would that be something worth considering? If we went in that direction, and even if Quebec managed its portion through the CDPQ, what effect would it have on investment in the country, on our momentum and on growth?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
I'll go back to the comments I made in my opening statement. In general, what makes us successful is our focus on our specific goal, which is managing Canadians' pensions. I'm not saying that other goals aren't good goals, but it can reduce our focus on that work.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Let me clarify what I mean. I am not talking to you about goals, national projects and so on, or about incorporating social objectives. I am talking about a situation where a significant portion of Canadians' retirement income comes from the old age security benefit, for example, a program that is funded each year by taxpayers' money. It is in the form of benefits.
Do you think it could be a good solution to ensure that these benefits can come from contributions and investments? This could increase the resources you have to invest, as you follow the same investment policy you currently have. Do you think this is something that parliamentarians should consider?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
It's certainly something worth exploring. It is a bit difficult to say exactly whether it's a good idea, but it is certainly something that should be looked at.
Allow me to return to your first question. It's not that we have no interest; it's that we are investors. We don't build things, and there's a great deal of risk when something doesn't get built. In general, we will invest in projects that provide us with a bit more certainty as to what the return on our investment will be.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
I understand. I'll stop there, but I do want to highlight that the Caisse de dépôt et placement du Québec did indeed move in that direction.
Moreover, I know that 12% of your investments are made in Canada, but I would like to know what percentage of your entire portfolio worldwide, including Canada, is invested in oil, directly or indirectly.
If you are not able to give me the answer today, could you please provide us with a written response regarding your investment portfolio in oil, gas and hydrocarbons, broken down by province and by country?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
I have the exact data at hand, but I think it might take me a little time to find the information. However, it's certain that—
Bloc
Jean-Denis Garon Bloc Mirabel, QC
That's why I asked for a written response, but can you tell me what it looks like, roughly?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
We can give the information to you before the end of today's meeting, for sure.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
When you invest in oil, a highly fluctuating market that will eventually have to deal with the energy transition, do you consider those investments as having particular risks that give rise to certain considerations or concerns for you?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
Yes, absolutely. We see our investments in high-emitting sectors as a risk, but we also see an opportunity to help companies in these sectors make the transition. We see—
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
According to our interpretation of things, it is absolutely within our mandate.
Liberal
The Chair Liberal Karina Gould
Thank you.
We now will continue with Ms. Cobena for five minutes, please.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
Thank you, Madam Chair.
Thank you, Mr. Leduc, for being with us this morning. I want to say that any recommendations you make or any legislation you would recommend are incredibly valuable to us, because, of course, we're looking at that closely. The topic of the study today is incredibly important for us.
We recently saw one RBC report published this week with a finding that between 2015 and 2024 more than a trillion dollars in investments exited Canada. It is the largest capital exodus in Canadian history. As a major independent institutional investor, CPPIB presumably would be reflected in that figure.
Could you speak to the scale of this capital flight and what is driving it?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
I'll speak from our perspective, rather than being able to interpret what other investors are doing.
I'll just reinforce that we see Canada as a very solid market, a place where we want to continue to invest. Insofar as the percentage of our exposure to Canada that has decreased over the last 15 years, let's say, it is not a judgment on whether Canada is a good place to invest. It is more a focus on seeking the highest possible returns. As it turns out, those decisions really favour the best interests of contributors and beneficiaries.
It's more in terms of the.... If you're faced with 100% of the investable universe and Canada provides less than 3%, by definition the opportunity is 97% outside the country. If we're looking at only the public markets over the last 15 years, that made a difference of about $100 billion in terms of the performance of the global markets versus, say, only a Canadian-focused investable universe.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
Your mandate is to get the greatest return for your Canadian investors. You spoke a bit about, obviously, going after investments that provide you the greatest returns, the highest returns, and that is one of the main guides for your investment decisions.
Where do you see those big returns today? How did that guide your investment decisions over the last 15 years? Presumably, it's fairly similar to what other institutional investors and other investors are looking at.
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
At the risk of oversimplifying things, if there's one thing that we had to pick, it would be diversification: looking not only at diversification in terms of emerging and developed markets but also at diversification in terms of a broad range of asset classes, from private assets to public markets to real assets such as infrastructure, ports and toll roads.
Part of the benefit of having the scale that we have and the sheer size of the fund is that we can access things that very few investors around the world can access.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
The data I have is as of 2025, just last year, for the geographic breakdown of your investments. One of the largest ones there is the U.S. at 47%.
Within this report, they also talk about the biggest opportunity: an opportunity of over $700 billion in the oil and gas sector. What conditions would you need here in Canada to take advantage of those opportunities, and are you looking at those opportunities today?
Senior Managing Director and Chief Public Affairs Officer, Canada Pension Plan Investment Board
We are looking at those opportunities. Favourable conditions are ones that we see in almost every market we are engaged in. There are things that would not be surprising. It's the predictability and credibility of the overall approval process. It would be things like the part on a value chain of investing where you can identify various risks and where those risks are applied. Governments may be better able to deal with aspects of permitting risks.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Leduc. We are going to have to end this round there.
We are going to continue now with Mr. Fragiskatos for five minutes.
