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(November 9, 2006) The CPP fund, which includes both investment earnings from the CPPIB and CPP contributions not needed to pay current pensions, has surpassed $100 billion for the first time. As of September 30, 2006, earnings stood at $103.3 billion, a $4.7 billion increase from the previous quarter.

“In surpassing $100 billion in assets, we mark a milestone in the growth and evolution of the CPP fund,” said CPP president David Denison. “Within the next decade, the Chief Actuary of Canada estimates that the CPP fund will grow to $250 billion, making it one of the largest single purpose pools of investment capital in the world.”

For the quarter, the CPP fund’s rate of return was 3.9%. For the first half of the fiscal year, the CPP fund’s rate of return was 1.3%, or $1.4 billion, while the fund added $3.9 billion from CPP contributions not needed to pay current pensions. The net result is a $5.3 billion overall increase in the CPP fund from April 1, 2006 to September 30, 2006.

At September 30, 2006, the CPP fund consisted of 58% public equities, 25% bonds, 9.7% inflation-sensitive assets, 5.4% private equities and 1.7% cash.

CPP contributions are expected to exceed annual benefits paid until 2022, providing a 16-year period before any investment income is needed to help pay CPP benefits.

The public pension plan was criticized earlier this month in a series of articles suggesting it is weak on environmental, social and governance issues.

In a letter, Donald Raymond, the CPP’s senior vice-president of public markets, noted that the articles “incorrectly conclude” that screening or divestment is the only way to deal with such issues.

“Consistent with its Policy on Responsible Investing, the CPP Investment Board does take ESG factors into account in investing the $100 billion CPP fund because, as our policy states, ‘we believe that responsible corporate behaviour with respect to environmental, social and governance (ESG) factors can generally have a positive influence on long-term financial performance,'” Raymond wrote.

Still, it appears the CPP won’t budge on screening, which Raymond says may be effective for smaller pools of capital for investors who make specific investment choices but can significantly limit choice, increase risk and reduce returns in a pool of capital as large as $100 billion.

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Saskatchewan beefs up Securities Act

(November 9, 2006) Proposed changes intended to strengthen Saskatchewan’s Securities Act and harmonize provisions with other jurisdictions were given first reading in the province’s legislature earlier this month.

Among the highlights, the bill includes approval of the passport system, civil liability for secondary market disclosure, and stronger financial compensation measures. For instance, the Saskatchewan Financial Services Commission can order that a person or company who has violated securities laws to repay financial losses of up to $100,000 for each investor.

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Federal fiscal update set for November 23

(November 9, 2006) Federal Finance Minister Jim Flaherty will deliver an update on Canada’s financial status on November 23.

The minister will also reveal his party’s new “long term economic policy,” Flaherty said on Thursday.

The feds usually provide a fiscal update in the fall, including information on budgetary surpluses or deficits, but Flaherty surprised Canadians on October 31, announcing a number of new measures, including a phased-in tax on income trusts and income splitting for seniors.

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