Evidence of meeting #31 for Public Accounts in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was plans.
A video is available from Parliament.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
Great.
I'll go back to the Treasury Board Secretariat, to paragraph 1.70, which states, “...there is a risk that not all aspects related to the appropriateness of the design and funding are adequately considered in various decisions.”
Will the creation of a senior interdepartmental committee facilitate a better approach to dealing with these kinds of issues, on design, etc.?
Chief Human Resources Officer, Treasury Board Secretariat
Yes. This process will bring, I think, a different type of rigour to work that we were already doing. As I think I described earlier, we think this will much better ensure that nothing falls between the cracks. We will have formal meetings at very senior levels to make sure that we consider all these issues directly.
Conservative
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
I'd like to direct a quick question to Mr. Valentini.
When I was on the government ops committee, I had the good fortune of listening to your presentation on the PSPIB investment in infrastructure in various countries. Partly because of the returns on that, it seemed to make sense, given that you have a very strong mandate: you can't put people's money at risk, but you have to return the 4.1%, or at least now, as Mr. Ménard has said, the 3.1% ratio of real return.
Does part of that have to do with infrastructure typically having more of a monopoly type of situation? It's more recession proof. Are those the kinds of assets that perform well even when the economy isn't doing well?
Executive Vice President, Chief Operating Officer and Chief Financial Officer, Public Sector Pension Investment Board
Your question is on why we invest in infrastructure assets?
Executive Vice President, Chief Operating Officer and Chief Financial Officer, Public Sector Pension Investment Board
It's partly about overall diversification strategy in infrastructure as an asset class. We call it a real return asset. It has less volatility than equities do, and it is very much linked to inflation. It is very attractive in an asset mix, in a pension plan, because of its attributes. Not only is it linked to a real return asset like inflation, but it's also a private asset, so you capture what we call an illiquidity premium.
There are not many investors who have the capacity to invest in these types of assets, because they are big-ticket items. We've done transactions of over a billion dollars. It's a less competitive environment, and less crowded. We're able to invest in these assets and hold them for a long term because of our liquidity advantage. We don't have to sell assets or pay out liabilities before the year 2030. For instance, we've made major investments not only in infrastructure, but in renewable resources, in forests, where the holding period for those investments are well over 10 years.
These are assets that will not necessarily provide 20%-plus returns. They will provide stable returns. They are less volatile and basically fit well in an asset mix in the diversification strategy because of their attributes.
Conservative
Dan Albas Conservative Okanagan—Coquihalla, BC
Thank you. I appreciate all the work you do.
To all of the witnesses today, I do appreciate your patience and your testimony today.
NDP
The Chair NDP David Christopherson
Thanks, Mr. Albas.
Indeed, thanks to our guests.
Commodore, you need to send an e-mail to Major-General Millar and let him know that you're not sure what the big deal was, that this was a piece of cake.
Assistant Chief of Military Personnel, Department of National Defence
I'll make sure I do that, sir.
NDP
The Chair NDP David Christopherson
Thanks for your presence today, Commodore, and to all of you, thank you for your indulgence. Our apologies for the inconvenience of interrupting this. It makes it no less important. Thanks very much to all of you for your fulsome answers.
Colleagues, we now stand adjourned until our next usual meeting, where we will be meeting to do business.
This meeting now stands adjourned.