National Post

Liberals, please keep your mitts off our CPP

It’s more of the moralizing we’ve come to expect

- Andrew Coyne

It’s probably nothing. It was just a tweet, after all. But when the federal environmen­t minister, Catherine McKenna, posted her approval of a recent Canada Pension Plan Investment Board decision, it caused a little flutter of alarm among those who follow these things.

“Now, this is something that Canadians can be proud of,” she cheered, linking to a story about the CPPIB’s plans to invest more than $3 billion in green energy projects, “as it prepares for the global transition to a lower-carbon economy.”

Ministers of the Crown do not normally comment on CPP investment decisions, approvingl­y or otherwise, and with good reason. Though the federal and provincial government­s set the broad terms of the plan’s operations — how much it collects in “contributi­ons” from employers and employees, etc — the CPPIB, which is responsibl­e for investing the $356 billion accumulate­d in the CPP Fund, is supposed to operate at arm’s length from all of them.

That, too, is with good reason. The CPPIB’s sole mandate, as defined in the legislatio­n that establishe­d it, is to earn the best possible return, “without undue risk of loss,” for the fund’s beneficiar­ies — the current and future pensioners of Canada.

It cannot fulfil that objective if it is also obliged to invest in things ministers think appropriat­e, whether their motives are high (saving the planet) or low (saving their seats).

The import of the minister’s very public declaratio­n was that the CPPIB’s decisions should be assessed by some other criterion than mere return on investment. The reason she suggested “Canadians can be proud of ” the CPPIB’s plans to invest in a range of environmen­tally-conscious projects of the sort the minister is known to favour — wind and solar energy, sustainabl­e water, and so on — is not because they were likely to make pots of money for pensioners, but because they fit with the Trudeau government’s image of itself as forward-thinking environmen­talists.

They might also make pots of money but, if that were all this were about, the minister would presumably not have thought it worth pointing out, still less talked about it in terms of “pride.” The appeal was moral, not mercenary. So the managers of the fund, if they did not know already, would know the kinds of investment­s that would earn the government’s approval, even if they did not earn much in the usual currency. Possibly this might come in handy one day.

And after all, is money the only thing that matters, even to pensioners? Isn’t saving the environmen­t also important? What about gender-based analysis? Or supporting Canada’s emerging high-tech sector? Look, nobody’s saying the fund shouldn’t try to earn a decent return. But should it have to earn the maximum return? Isn’t it enough that it pass some sort of minimum threshold?

You can see how easy it is to fall into this line of thinking. It’s the same language used to dilute standards and obscure accountabi­lity in other areas. And it’s precisely this kind of doubletalk that leads to billions of dollars being squandered, wherever and whenever politician­s are let near large unattended piles of cash.

But hey — it was just a tweet. Relax. It doesn’t mean anything. It’s just the usual non-stop, 24-hour moralizing we’ve come to expect from the primly ideologica­l fanatics in this increasing­ly ridiculous government.

Besides, the government can’t tell the CPPIB how it should invest. Its independen­ce is enshrined in law.

OK. But then there’s this story, from a couple of weeks back. “The head of the Canada Pension Plan Investment Board says the federal government’s financial adviser has raised the possibilit­y of getting involved in the Trans Mountain pipeline project” — yikes! — “but” — wait, relax, false alarm — “there’s been no political pressure applied.”

The minister didn’t approach them personally, you understand. All that happened, rather, was that Greenhill & Co, the investment bank the minister hired to find a buyer for the pipeline, approached the CPPIB on the minister’s behalf, scant days after the government’s purchase of it from Kinder Morgan for $4.5 billion and a few weeks after the minister had boasted publicly about all the unnamed “pension funds” that were lining up to buy it. But no pressure.

OK. But then there’s the new Canada Infrastruc­ture Bank, with a mandate to raise private capital, mixed with $35 billion in federal funds, to finance investment­s in public infrastruc­ture. And which “private” investor was among the first to be mentioned as a possible source of capital?

Why yes, it was the CPP. Well, probably doesn’t mean anything. Still: is the CPPIB really going to turn up its nose at an investment with a federal guarantee, even federal money behind it? If that means the CPP is being subsidized out of the federal budget — making investment decisions, that is, that depend on the government’s willingnes­s to participat­e — well, what of it?

That doesn’t mean the government is influencin­g it … much.

OK. But now suppose the shoe is on the other foot, and the CPP has a project in need of financing. And suppose, finding itself unable to finance it privately, it goes to the government for funds. (This is hardly a fanciful scenario: Quebec’s Caisse de Dépôt demanded, and won, funding from the federal and provincial government­s for its Montreal light-rapid transit line, to the tune of $1.3 billion apiece.)

Well, the minister might say, I’d be delighted to invest in your project — provided you are willing to invest in this little project of mine.

Nobody’s telling anyone what to do, mind. They can each be passed off as a purely commercial decision.

And so, little by little, the CPP is brought within Finance’s sphere of influence.

But what are the odds? Relax! It probably won’t happen!

 ?? PATRICK DOYLE / THE CANADIAN PRESS ?? Minister of Environmen­t and Climate Change Catherine McKenna recently cheered a CPPIB investment plan.
PATRICK DOYLE / THE CANADIAN PRESS Minister of Environmen­t and Climate Change Catherine McKenna recently cheered a CPPIB investment plan.
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