Exciting news today:
According to the Toronto Star, quoting an NDP member of Parliament who referenced some public filings, the Canada Pension plan has sold off its stock in private companies that run migrant detention centres.
Never mind that a Human Rights Watch report shows Canada detains children who try to illegally immigrate to Canada, too — about 240 a year. Every country does. But it’s easier for the Toronto Star to hold Trump to account than Justin Trudeau. (And of course, Trump doesn’t have a $600 million bail-out for Canadian newspapers, does he?)
But I’ll come back to that news in a moment.
First, you need to know that no-one under the age of sixty is going to get their money back from the Canada Pension Plan.
It is not actuarially sound — as in, it’s not a true investment. The CPP pension plan started paying out right away after it was created. So those first retirees were just getting a government grant; They were taking money from future generations.
Today, your money, that you pay every time you get a payroll deduction, it’s not set aside for you, like with a real pension plan or a real bank account. It just goes into a giant pot. People who retired before you already spent some of the money; people retiring today are taking some of it. You literally could do better if you stuck the money in a mattress. Or, as normal countries might do, or normal pension plans, if they let you invest your money yourself, as many Canadian do with an RSP.
The plan's unfunded liability was last audited at $900 billion, and growing every year. They’re missing two-thirds of what they’d need to be able to keep their promise to everyone.
Few politicians have the courage to do anything about this. Stephen Harper was taking baby steps in this regard, by very slowly making the retirement age a bit higher. (Remember, when the CPP was invented in 1966, life expectancy in Canada was about 72, and you didn’t get your pension till you were 69. Now it’s been reduced to 65, and you can even get a partial pension at age 60. By the way, the life expectancy is now 82.)
But let’s put that aside for now.
The mandate of the CPP investment board is to make money — to do their best to pay at least a fraction of what you’ve given to the government in CPP taxes over the years. And they say they’re non-partisan — they make their decisions as professional money managers, not as political appointees.
That doesn’t mean they’re not infected by politics.
Here’s their “report on sustainable investing.” Which is their way of saying, being a left-wing woke investor. This report uses the words “diverse” or “diversity” exactly 50 times.
But they don’t mean diversifying your assets, to manage the risk.
They mean affirmative action quotas.
The Canada Pension Plan does its due diligence into companies. Looks at companies that are doing well in business. Not just in Canada but around the world. Good business plan? Reliable team? Successful track record? Worthy of Canadians pension money? After all that due diligence, they get the investment from the CPP.
And then the CPP starts lecturing those company about replacing their management and directors with quota hires. Yeah, not smart. But I’ll come back to that in a moment. Because I think it’s a lie.
TONIGHT I'll explain what I mean by that. It matters: After all, this is (or, was supposed to be) your money.
Back to the news peg of the day, from the Toronto Star:
Canada’s largest pension fund has quietly divested from two American private prison operators deeply involved in the detention of thousands of Latin American migrants at the southern border of the United States, according to New Democratic Party MP Charlie Angus.
And you know, when I want an expert in pension funds and financial investments, I look no further than Charlie Angus, a social justice MP who plays a guitar.
Now let me point out a few other things about the CPP Investment Board that don’t seem to bother Charlie Angus or the NDP, or really anybody. Here’s a news story earlier this year, from BNN Bloomberg:
The Canada Pension Plan Investment Board, which manages around $368.5 billion (US$277 billion), is considering opening its first office in China as it seeks greater exposure to the world’s second-largest economy.
China has declared a trade war on Canada. And, if you care about, you know, diversity and human rights, there’s that little thing about two Canadian hostages.
Here’s a story in the Globe and Mail about just what the CPP is investing in, by the way. You’ll love this:
CPPIB conducts human-rights checks on Chinese investments amid use of surveillance equipment on Uyghurs
So we’re not investing in banks or airports. We’re literally investing in Chinese surveillance companies?
Don’t force me to divest from an American company that is enforcing the law.
And don’t force me to invest in a Chinese company that is committing human rights violations.
Come to think of it — don’t force me to invest at all.
At least not in a Ponzi scheme, a pyramid scheme, like the Canada Pension Plan.
FINALLY: Your messages to me!