Canadian Pension Pens $4B Infrastructure Deal

Michael Sabia, CEO at la CaisseQuebec’s C$215 billion ($179.5 billion) pension plan has stepped up to provide $4 billion of investment in public transport as part of a wider plan to finance projects for the Canadian province.

La Caisse de dépôt et placement du Québec reached an agreement with the province’s government yesterday to fund “major infrastructure projects”, which will see the pension fund assume responsibility for project planning, financing, development, and operation of infrastructure.

“Today’s agreement will allow us to increase our exposure to infrastructure while concretely putting our expertise to work for Quebec’s economy.” —Michael Sabia, la CaisseLa Caisse is to set up an infrastructure management subsidiary company to enable the projects.

The initial $4 billion investment announced yesterday prioritises two public transit systems in the province’s capital, Montreal.

Michael Sabia, president and CEO of la Caisse, said infrastructure was “perfectly aligned” with the pension’s long-term goals.

“Today’s agreement will allow us to increase our exposure to infrastructure while concretely putting our expertise to work for Quebec’s economy,” he added. “These investments will generate returns that help to secure Quebecers’ retirement for the future. It’s a win-win partnership that benefits everyone.”

Under the agreement, Quebec’s government will identify opportunities and set parameters for la Caisse. The pension is under no obligation to accept all recommendations, and the government will remain “guardian of the public interest”, said a statement on la Caisse’s website.

La Caisse was among a group of large institutions and investors that backed a $1 trillion plan from the World Bank to improve access to infrastructure investments.

In May last year the pension appointed a new executive vice president with special responsibility for investments in Quebec.