Yes, that is right, they did double his bonus for his assertion that all was well.
The strategy to diversify from government bonds to other assets is the right one, according to Mr. MacNaughton. What he fails to say, and what the Alliance fails to say, is that it has been government bonds over the last couple of years that have helped offset some of the large losses that have occurred on the equity side of the portfolio, because the bulk of the money has been transferred into index funds, Standard & Poor and the Toronto stock exchange, and some have been allocated to the United States and the international stock indices. The equity portfolio in the CPP Investment Board fund was at $16.9 billion on September 30 of last year. That is a very large amount of money. The 20%, the $4 billion it lost, is based upon that.
If we look at this in personal terms, the fund is designed for a cash-rich investor, in this case very rich because we are investing between $6 billion and $8 billion a year in new funds. Of course the CPP argument is that with the market downturn this is a good time to invest even more money.
I want to contrast what the CPP investment board has been doing with what Quebec has been founded on since 1966 and what the Canada pension plan used to be founded on. Particularly for Quebec, less so for the Canada pension plan, there were three or four key principles. One of them was that the money from Quebec's public pension plan was going to be invested in Quebec firms, in small and medium-sized firms with less than $50 million in operating capital. This was to create, maintain and protect jobs in la belle province. It was also designed to promote the training of workers in economic matters and increase the influence on Quebec's economic development. A third goal was to promote training and to stimulate the Quebec economy.
The result has been very significant in that province. Quebec went from a region with limited sources of venture capital to one that now gathers the largest share of overall venture capital in our country. Something in excess of 52% of venture capital is directed to the Province of Quebec, largely as a result of these restrictions and stipulations on how moneys from the Quebec pension plan can be secured and invested for a better return for the people who are actually living in that province.