Ottawa Citizen: Invest pensions ethically! NDP motion
February 10, 2004

Yesterday, the matter of the Canada Pension Plan's investments in war was finally reported by a daily newspaper, the Ottawa Citizen.

Despite months of efforts, this was the first time that any mainstream corporate media had even touched this subject.

Thanks for this Citizen coverage goes to the New Democratic Party, and particularly Pat Martin, MP, who is now pushing for legislation to require the CPP to invest ethically.

And, as the Ottawa Citizen article states: "Mr. Martin said his motion was inspired by a recent study by the Coalition to Oppose the Arms Trade [COAT], which linked CPP investments to top U.S. military contractors."

The article did NOT mention that COAT has created a web petition to oppose CPP war investments. If you haven't yet signed, please do so, and encourage others to do likewise: http://coat.openconcept.ca

Please respond to the Ottawa Citizen article (see below) with a letter to the editor:

Email: letters@thecitizen.canwest.com
URL:   http://www.canada.com/ottawa/ottawacitizen/letters.html
Mailing address: Ottawa Citizen, 1101 Baxter Road, Box 5020, Ottawa, ON K2C 3M4

To order a copy of COAT's 50-page report:

"Operation Embedded Complicity: Canada, Playing our Part in the Business of War"
send $5 to: COAT, 541 McLeod St., Ottawa ON K1R 5R2
(or subscribe: 1 year=$20, 2 years=$36)

Here's the Ottawa Citizen article:

Invest pension fund ethically: NDP motion
CPP's billions should support Canadian values, says Pat Martin

By Bill Curry
The Ottawa Citizen, Sunday, February 08, 2004

The Canada Pension Plan reserve fund, which is predicted to swell beyond
$160 billion within a decade, should be forced into ethical investments
rather than supporting companies such as military suppliers and tobacco
makers, states a new motion tabled in the Commons by the NDP.

In light of recent reforms to the program to ensure it can support the
retiring baby boom generation, increased premiums have boosted the fund to
its current $64.7-billion. NDP MP Pat Martin said the ballooning fund means
its investments now have a significant impact on the economy and Canadians
should have a debate over whether the Canada Pension Plan Investment Review
Board needs guidelines regarding how it invests their money.

"There are lots of Canadians who refuse to invest in tobacco companies for
all kinds of ethical reasons who will be really upset to learn there's
nothing stopping the CPP from doing that," said Mr. Martin.

CPP funds have gradually been transferred to the board since it was created
in 1999 with a mandate to invest in private equities.

The NDP MP points out that many Canadians pride themselves for not
supporting the U.S.-led war in Iraq, yet the fund has about $600-million
invested in U.S. military contractors, such as Lockheed Martin, Boeing,
Raytheon and General Dynamics.

"It's absolutely shocking. I mean, part of the Chretien legacy was staying
out of the war in Iraq. Well, we've been inadvertently participating in the
war in Iraq all along through our Canada Pension Plan. It's disingenuous to
Canadians."

The motion introduced by Mr. Martin last week calls for the Canada Pension
Plan Investment Review Board to be "prohibited from investing in companies
and enterprises that manufacture and trade in military arms and weapons,
have records of poor environmental and labour practices or whose conduct
and practices are contrary to Canadian values."

With the current session of Parliament expected to be cut short for an
election, the motion is not expected to come to a vote in the near future,
but NDP leader Jack Layton has said the idea will be part of his party's
campaign platform.

Mr. Martin argues that if the CPP is going to be investing in the stock
market, it should use "ethical funds" which have various screens to weed
out companies such as military contractors, tobacco and alcohol producers
and companies engaged in child labour.

"The ethical mutual funds have in some cases outperformed the general
funds, but what we need to take into account with our pension plan is that
we could be achieving necessary secondary objectives that may be more
difficult to measure," he said.Mr. Martin's other investment suggestions
include using the fund to build social housing and then collecting returns
through mortgages, lending money to municipalities for green infrastructure
like public transit and generating profit from the interest, or funding
energy retrofits for government buildings and collecting the energy savings.

Mr. Martin said his motion was inspired by a recent study by the Coalition
to Oppose the Arms Trade, which linked CPP investments to top U.S. military
contractors.

Fred Ketchen, director of equity trading for Scotia McLeod, questioned Mr.
Martin's proposal, pointing out that "ethical" mutual funds have
traditionally underperformed traditional funds. Also, Mr. Ketchen said
maximizing returns for Canada's seniors could be considered a social goal
in itself.

"I know that it's tough for those people who may think that some of their
Canada Pension Plan money is being invested in God knows what -- Rothmans
or Molsons or Lockheed Martin or Boeing -- but I thought the Canada Pension
Plan was supposed to represent all Canadians," he said.

Mr. Ketchen said ethical funds will likely always underperform traditional
funds because they go against the main rule of investing, which is to have
as diverse a portfolio as possible.

"I admire people who have that philosophy but if I was running a pension
plan, I'd be looking for the best results that I could get from all sectors
with diversification," he said. Mr. Ketchen added that Canadians should not
be surprised that the CPP has lost money since entering the stock market,
because it has been a down period for all investors.

CPP Investment Board spokesman John Cappelletti said federal legislation
requires the board to focus only on maximizing returns and that changing
the legislation would not be easy.

"It would take more than Parliament," he said, pointing out that the
federal government would also have to secure the support of two-thirds of
the nine participating provinces representing two-thirds of the population.

The Ottawa Citizen, Sunday Feb. 8, 2004, p. 3

Source: Coalition to Oppose the Arms Trade
http://coat.ncf.ca

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