Canada Pension Plan invests millions in 'unethical' Chinese companies

The Canada Pension Plan Investment Board Act mandates the pension board to prioritize a 'maximum rate of return' on all investments, regardless of ethics. China accounts for 10% of its assets, worth $576 billion.

Canada Pension Plan invests millions in 'unethical' Chinese companies
AP Photo/Alastair Grant
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The Canada Pension Plan (CPP) continues to face pushback for investing pension funds in Beijing-led coal mines, propaganda film studios and a solar power company linked to slave labour.

On December 13, the House of Commons Special Committee on Canada-China Relations urged the Trudeau Liberals to move on disqualifying investments into unethical Chinese companies. 

"There is no legislative or regulatory provision that would prevent investments in the People’s Republic of China or in companies that are complicit or linked to human rights abuses," said the report The Exposure Of Canadian Investment Funds To Human Rights Violations In The People’s Republic Of China.

It noted the Canada Pension Plan Investment Board Act gives the Canada Pension Plan Investment Board the mandate to prioritize a "maximum rate of return" on all investments, regardless of ethics.

Among their questionable investments include $4 million into Longi Green Energy Technology Company Limited, a solar panel manufacturer accused of using Uyghur Muslim slave labour.

Michel Leduc, the plan’s global head of communications, earlier testified at the Commons special committee that "human rights are increasingly an investment consideration."

"We are exceedingly cautious," he said. "We strongly believe any business, asset, or company that does not take human rights seriously will just not be around, so it is a destruction in value."

However, records in 2019 and 2020 showed the Investment Board also purchased shares in 21 publicly traded China coal operators, distributors and utilities worth $141 million. Among them include China Shenhua Energy Company Limited, its largest state-owned coal company.

According to Blacklock’s Reporter, the CPP Fund’s 2021 Annual Report, pensioners also invested $7 million into a Communist Party film studio censured by Parliament for crimes against humanity. 

Still, the pension board lauded those as "good investments."

On Wednesday, the committee recommended the Trudeau Liberals to compile and maintain an official list of companies deemed "unsuitable for investment" including a list of Chinese companies that pose risks to "national security, corruption or gross human rights violations."

Other investments by the Board into Chinese firms include $259 million in China Gas Holdings Ltd., a natural gas distributor, $75 million in the state-run China Construction Bank and $37 million in the Bank of China. 

"If that fails, we will exit or avoid investing in the first place," claimed Leduc.

According to the November fiscal update, the federal government may consider more domestic investments to "boost Canada’s economy" and "create good careers for people across the country." In that case, it would permit pensioners from owning over 30% of any given Canadian firms — an exemption that would exclude all foreign enterprises.

As of writing, pensioners invest only 14% of their assets in Canada or $83 billion, reported the National Post.

Leduc contends Canada is a "core market" for the CPP Fund, In May, Blacklock’s Reporter uncovered the invested $539 billion globally. China accounts for 10% of those investments. That figure has since been updated to $576 billion.

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