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Political interference in Canada’s pension funds is wrong

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In its 2024 budget, Ottawa announced that former Bank of Canada governor Stephen Poloz would lead a group to explore how to make it more attractive for pension funds to invest domestically.Sean Kilpatrick/The Canadian Press

Anthony Pizzino is the chief executive of the National Association of Federal Retirees.

Canada’s economy could use a boost, but trying to mandate investment from pension funds is wrong-headed and unfair.

Yet in an open letter last month, that’s essentially what 92 business leaders from across the country have urged federal and provincial finance ministers to do. They argue that the ministers should amend the rules governing pension funds to encourage them to “invest in Canada” and suggest government “has the right, responsibility and obligation to regulate how these savings regimes operate.”

Now, the federal government has bent to their request. In Tuesday’s budget, the government announced that former Bank of Canada governor Stephen Poloz would lead a new working group to explore how to make it more attractive for pension funds to invest domestically.

At first glance, this sounds reasonable. But it’s a slippery slope to more political interference in pension-fund investments. And such a move reflects a deeper problem.

This is not about investing in Canada to boost the economy, as those 92 letter writers say; it’s about these business leaders seeing money they want spent on their corporations. Such a policy would amount to a business subsidy using Canadians’ retirement savings.

Hard-working Canadians do not want governments to play politics with their pensions. The money in Canadian pension funds, such as the Canada Pension Plan (CPP), represents their retirement savings. The funds are not there to provide a source of investment dollars for private corporations or to pump up the value of a publicly traded company’s stock price. Pensions are in place for a reason; they provide long-term retirement income security for Canadians.

Pension funds aren’t in the business of investing in things that might make money 25 years down the road. While they can invest in long-term investments, their interest is in investments that will make money now, to secure the retirements of their plan members – their raison d’être. They have a fiduciary duty. In other words, taxpayer-funded pension plans are not slush funds for corporations. Pension funds are there for the plan’s members, and must be responsible to employees and pensioners who should not be deprived of their retirement benefits.

Further, while pension funds are made up of contributions from workers and employers, the bulk of these funds is the result of earnings on investments that wouldn’t exist were it not for the original investments. Pension fund investors are savvy. If there were more money to be made by investing in Canadian public equities, pension plans would already be doing so.

We should not think of Canada as a small country, but economically, it is, representing less than 3 per cent of global GDP. Yet our pension plans are some of the biggest and most successful in the world. As such, there aren’t a large-enough number of profitable opportunities in which pension funds could invest without stepping on each others’ toes. The proposed policy could actually create artificial competition among pension plans for those limited potential investments.

It’s important to diversify and not concentrate all our investment eggs in one basket. Having a portfolio with investments around the world reduces risk and increases opportunities for growth, making Canadians’ retirements more secure.

There’s also the fact that most of Canada’s pension plans already punch above their weight when it comes to investment in Canada. Pension funds such as Healthcare of Ontario Pension Plan and Ontario Teachers’ Pension Plan already have more than a third of their funds invested in Canada. Canadian pension funds would rather invest here for a multitude of reasons, and they are doing so as much as is feasible.

In response to the business leaders’ letter, several former pension plan chief executive officers wrote an opinion piece in this paper denouncing this idea. In part, they argued that Canada is a global pension role-model, largely because its plans have been allowed to invest and grow without political interference.

Those former CEOs are right. A change to a sound policy of non-interference is ill-advised. We should not tamper with the independence of pension fund investment boards such as the CPPIB.

 

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Youri Chassin quits CAQ to sit as Independent, second member to leave this month

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Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.

He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.

In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.

Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.

He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.

Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.

He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.

This report by The Canadian Press was first published Sept. 12, 2024.

The Canadian Press. All rights reserved.

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‘I’m not going to listen to you’: Singh responds to Poilievre’s vote challenge

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MONTREAL – NDP Leader Jagmeet Singh says he will not be taking advice from Pierre Poilievre after the Conservative leader challenged him to bring down government.

“I say directly to Pierre Poilievre: I’m not going to listen to you,” said Singh on Wednesday, accusing Poilievre of wanting to take away dental-care coverage from Canadians, among other things.

“I’m not going to listen to your advice. You want to destroy people’s lives, I want to build up a brighter future.”

Earlier in the day, Poilievre challenged Singh to commit to voting non-confidence in the government, saying his party will force a vote in the House of Commons “at the earliest possibly opportunity.”

“I’m asking Jagmeet Singh and the NDP to commit unequivocally before Monday’s byelections: will they vote non-confidence to bring down the costly coalition and trigger a carbon tax election, or will Jagmeet Singh sell out Canadians again?” Poilievre said.

“It’s put up or shut up time for the NDP.”

While Singh rejected the idea he would ever listen to Poilievre, he did not say how the NDP would vote on a non-confidence motion.

“I’ve said on any vote, we’re going to look at the vote and we’ll make our decision. I’m not going to say our decision ahead of time,” he said.

Singh’s top adviser said on Tuesday the NDP leader is not particularly eager to trigger an election, even as the Conservatives challenge him to do just that.

Anne McGrath, Singh’s principal secretary, says there will be more volatility in Parliament and the odds of an early election have risen.

“I don’t think he is anxious to launch one, or chomping at the bit to have one, but it can happen,” she said in an interview.

New Democrat MPs are in a second day of meetings in Montreal as they nail down a plan for how to navigate the minority Parliament this fall.

The caucus retreat comes one week after Singh announced the party has left the supply-and-confidence agreement with the governing Liberals.

It’s also taking place in the very city where New Democrats are hoping to pick up a seat on Monday, when voters go to the polls in Montreal’s LaSalle—Émard—Verdun. A second byelection is being held that day in the Winnipeg riding of Elmwood—Transcona, where the NDP is hoping to hold onto a seat the Conservatives are also vying for.

While New Democrats are seeking to distance themselves from the Liberals, they don’t appear ready to trigger a general election.

Singh signalled on Tuesday that he will have more to say Wednesday about the party’s strategy for the upcoming sitting.

He is hoping to convince Canadians that his party can defeat the federal Conservatives, who have been riding high in the polls over the last year.

Singh has attacked Poilievre as someone who would bring back Harper-style cuts to programs that Canadians rely on, including the national dental-care program that was part of the supply-and-confidence agreement.

The Canadian Press has asked Poilievre’s office whether the Conservative leader intends to keep the program in place, if he forms government after the next election.

With the return of Parliament just days away, the NDP is also keeping in mind how other parties will look to capitalize on the new makeup of the House of Commons.

The Bloc Québécois has already indicated that it’s written up a list of demands for the Liberals in exchange for support on votes.

The next federal election must take place by October 2025 at the latest.

This report by The Canadian Press was first published Sept. 11, 2024.

The Canadian Press. All rights reserved.

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Social media comments blocked: Montreal mayor says she won’t accept vulgar slurs

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Montreal Mayor Valérie Plante is defending her decision to turn off comments on her social media accounts — with an announcement on social media.

She posted screenshots to X this morning of vulgar names she’s been called on the platform, and says comments on her posts for months have been dominated by insults, to the point that she decided to block them.

Montreal’s Opposition leader and the Canadian Civil Liberties Association have criticized Plante for limiting freedom of expression by restricting comments on her X and Instagram accounts.

They say elected officials who use social media should be willing to hear from constituents on those platforms.

However, Plante says some people may believe there is a fundamental right to call someone offensive names and to normalize violence online, but she disagrees.

Her statement on X is closed to comments.

This report by The Canadian Press was first published Sept. 11, 2024.

The Canadian Press. All rights reserved.

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