Quebec Opposition gangs up on gov't amid leaks of Caisse losses

Quebec's official Opposition party called on the Charest government Friday to tend immediately to the province's battered pension fund manager, or risk threatening the pensions of thousands of people.

Members of the Parti-Québécois and the Action Démocratique du Québec spoke out Friday after reports suggested the Caisse de dépôt et placement du Québec will report the worst losses in nearly half a century when it makes its 2008 results public later this month.

'They changed the mission to concentrate only on short-term yields. That was an error.' —Francois Legault, Parti-Québécois finance critic

La Presse reports the anticipated yearly loss at $38 billion, a quarter of the fund's assets.

Caisse officials refused to confirm the figures on Friday, telling CBC News that the financial results will be reported as planned at the end of February.

Parti-Québécois finance critic François Legault said the problems are due in part to bad decisions by the provincial Liberal government.

Legault said the Liberals made a mistake when they changed the pension fund's mission a few years ago.

"Instead of having an institution investing in a balanced way between Quebec companies, [companies] outside Quebec and different instruments for yields, they changed the mission to concentrate only on short-term yields. That was an error," said Legault.

He called on Premier Jean Charest to immediately review how the pension fund manager invests its money in order to contain further losses.

ADQ predicts payout troubles for pensions

ADQ leader Mario Dumont, warned Quebecers Friday that their public pension contributions may rise because of reported losses.

He echoed the message of his opposition colleagues from the PQ in blaming the Liberal government's decision to increase the fund's investment risk a few years ago.

"There's no doubt today that a much higher level of speculation than is acceptable has been implemented at the Caisse de dépôt," said Dumont.

He also worries the Caisse does not have enough money to pay out pensions indefinitely, suggesting taxpayer contributions would have to rise or the government may be have to "throw money" at the Caisse.

"The loss is so huge … the returns on the investment at the Caisse are not sufficient to permit the Caisse to fulfil its obligations," warned Dumont.

Liberals call for patience for final results

Liberal MNA Tony Tomassi said Friday the government will wait for the Caisse to report its finalized numbers.

"The Caisse de dépôt will make the numbers public at the end of February as usual," said Tomassi.  "We wish to wait until the true figures are verified and published before commenting on them."

'We wish to wait until the true figures are verified and published before commenting on them.' —Tony Tomassi, Liberal MNA

At the end of 2007, the Caisse had net assets of more than $155 billion, with about 36 per cent invested in the stock market, approximately 29 per cent in bonds and currencies and around 35 per cent in private equity and real estate.

In addition to anticipated losses of billions of dollars in 2008 from the falling stock market, the Caisse is expected take a large writedown from its holdings of asset-backed commercial paper.

Founded in 1965, the arm's-length Crown agency is one of the largest institutional fund managers in North America and among the world's 10 largest real estate asset managers.

Its clients are mostly Quebec public and private pension and insurance plans.