1975 Annual Report
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Tenth Annual Report Tenth Caisse Annual Report de dépôt et placement 1975 du Québec Table of contents Page 7 Board of Directors 8 Management 9 List of depositors 10 Letter of transmittal to the Minister of Finance 11 Address by the Chairman of the Board and General Manager 14 Highlights for the year 15 Management Report 31 Financial statements and statistics — General Fund 32 Balance sheet and Auditor's Report 34 Statement of income and expenditure 35 Summary of allocation of balance of income 35 Deposit accounts — Summary of transactions 35 General reserve 37 Statistical information 38 Summary of investments 40 Highlights for the decade 45 Financial statements and statistics — Segregated portfolios 46 Highlights for the year 47 Management Report Segregated portfolio-Bonds 52 • Balance sheet and Auditor's Report 53 • Statement of earnings and retained earnings Segregated portfolio-Stocks 54 • Balance sheet and Auditor's Report 55 • Statement of earnings and retained earnings Segregated portfolio-Mortgages 56 • Balance sheet and Auditor's Report 57 • Statement of earnings and retained earnings 58 Consolidated summary of investments 60 Six-year statistical summary 7 Board of Directors Marcel Cazavan, Chairman General Manager Caisse de dépôt et placement du Quebec Judge Gill Fortier, Vice-Chairman President Régie des rentes du Quebec Judge Richard Beaulieu* President Commission municipale du Quebec Hervé Belzile President Alliance Mutual Life Insurance Company Claude Castonguay Pouliot, Guérard, Castonguay & Associates Inc. John H. Dinsmore Deputy Minister of Industry and Commerce Gouvernement du Quebec Pierre Goyette* Deputy Minister of Finance Gouvernement du Quebec Louis Laberge President Quebec Federation of Labor Raymond Lavoie President and General Manager Credit Foncier Franco-Canadien E.-A. Lemieux* General Manager — Finance and Accounting Hydro-Quebec 'Associate member 8 Management General Management Marcel Cazavan, General Manager Jean-Michel Pans, Assistant General Manager Bond Department Depositors' Services Department Roland Lefebvre, Manager Gerard J. Blondeau, Manager Jean Laflamme, Associate Manager Jacques Roy, Executive Assistant Serge Leclerc, Assistant Manager Economic Research Department Stock Department Pierre Mayer, Associate Manager Pierre Arbour, Manager Étienne J. de Kosko, Associate Manager Administrative Services Department Pierre Dufresne, Associate Manager Pierre E. Langlois, Manager Raymond Lacourse, Associate Manager Guy R héa um e, Assistant Treasurer André Bineau, Director of Research Gody Lienhard, Assistant Manager Reynald N. Harpin, Assistant Manager Louise M. Zakaib, Personnel Claude L. Langevin, Assistant Manager Jean-Marc Pilon, Portfolio Manager Secretariat Marcel Cam, Secretary Private Placement Department Jean C. Lavoie, Manager Internal Audit Jacques Doiron, Associate Manager Serge Desjardins, Internal Auditor Jean Longpré, Assistant Manager Mortgage Department Gilles Dore, Manager Dominique Colard, Associate Manager Pierre Galarneau, Associate Manager Bernard Ranger, Legal Counsel 9 List of depositors Bodies whose constituent Act prescribes the deposit of moneys with Caisse de dépôt et placement du Quebec • Commission administrative du régime de retraite Government and public employees retirement plan Retirement plans for mayors and councillors of cities and towns • Commission des accidents du travail de Quebec • Office de la construction du Quebec • Régie de l'assurance-dépôts du Quebec • Régie de l'assurance-maladie du Quebec • Régie de l'assurance-récolte du Quebec • Régie des marches agricoles du Quebec • Régie des rentes du Quebec Supplemental pension plans whose administrators entrust the management of funds to Caisse de dépôt et placement du Québec • Supplemental pension plan of l'Université du Québec • Supplemental pension plan of the Société de développement de la Baie James • Supplemental pension plan (C S.N.-A.1-1.P.Q.- Ministère des Affaires sociales) Legal Deposit-1st quarter 1976 Bibliothèque nationale du Quebec 10 Caisse de dépôt et placement du Québec Quebec, March 12th, 1976 Raymond Garneau, Esq. Minister of Finance Gouvernement du Quebec Sir: In accordance with provisions of the charter of Caisse de dépôt et placement du Québec, I transmit herewith our tenth annual management report for the year ended December 31st, 1975. As required under Section 41 of the charter, this report contains a summary of operations and a statement of policies pursued, the audited financial statements of the General Fund and Segregated Funds for the year then ended, the Auditor-General's report, as well as statistical data. Yours very truly, Marcel Cazavan Chairman of the Board and General Manager 11 Address by Mr. Marcel Cazavan, Chairman of the Before examining the results of the tenth year of Board of Directors and General Manager of the operations, I would like to review the first decade Caisse de dépôt et placement du Québec, at a of the Caisse de dépôt et placement du Québec. meeting of the Board held February 20th, 1976. The Caisse has had many noteworthy achievements and indeed has even surpassed the expectations of 1965. The record of the Caisse is a sound one and those who have been involved, either directly or indirectly, in the various stages of its conception, creation, establishment, management, operations, and growth can be proud of its success. Sparked by a desire for sound financial eman- cipation and guided by the accomplishments of the Caisse des dépôts et consignations of France, an agency established in 1816, the Caisse came into being simultaneously with the Regie des rentes du Québec. Their existence was closely related to the coming into force January 1st, 1966, of a com- pulsory and universal pension program in Canada. In 1965, it was expected that the Caisse would become an important financial instrument, with other public and parapublic bodies eventually funnelling moneys into it. However, its charter specified that such bodies could deposit funds with the Caisse only with prior authorization from the legislator. This restriction in the scope of its oper- ations is still in effect and the Caisse therefore cannot accept deposits from the general public nor manage private pension funds. 12 Depositors ficult for the Caisse to discharge its mandate on a Since 1966, various agencies and boards have daily basis but it was essential that it comply with joined our original depositor, the Régie des rentes. the strict discipline of the money, financial and These were the Régie de l'assurance-dépôts du stock markets from the very start in order to estab- Quebec, the Régie de l'assurance-récolte du Québec lish credibility. Since then, it has continued to deal and the Régie des marches agricoles du Quebec at arm's length in securities of private or public in 1967 and the Régie de l'assurance-maladie du issuers. The National Assembly unanimously had Quebec in 1970. The same year, the Caisse also established the Caisse as an autonomous body in was empowered to manage the funds of supple- 1965 and it has always remained fundamentally mental pension plans established by collective independent in the management of its affairs. agreement decrees. Following amendments to the Despite this, there have been occasional insinua- Act governing it in 1972, the Commission des tions in certain circles, particularly outside Quebec, accidents du travail de Quebec entrusted manage- that some of its decisions were inspired by political ment of a substantial portfolio of securities to the motives or by petty nationalism. Suffice it to say, Caisse. The Bureau d'organisation du regime de in reply to such criticism, that when the Caisse retraite des employes du gouvernement et des decides, for example, to handle its stock transac- organismes publics — since become the Commis- tions through a smaller number of investment sion administrative du regime de retraite des em- dealers, to agree to sell securities following a take- ployes du gouvernement et des organismes publics over bid, to finance a particular building complex, — made its first deposit in August, 1973. Finally, or to retain the services of a consulting firm, it does three parapublic agencies, authorized to enter into so of its own volition, basing itself above all on an agreement with the Caisse by mutual consent proven criteria of profitability and efficiency. for management of assets of their supplemental pension plans, exercised this right in 1971 and Posthumous tribute to the founding 1972. At December 31st, 1975, the Caisse had Chairman eleven depositors and their consolidated assets The numerous achievements of the first decade totalled $4.3 billion. make it possible to appreciate the scope of the challenge which the founding Chairman, Mr. Trustee's mandate Claude Prieur, took up in January, 1966. Regret- It goes without saying that because the Caisse had fully, fate deprived him of the satisfaction he would such a large pool of funds under its management, have derived from completing his original mandate it soon became a major influence on Canadian and from seeing the breadth of the task he had financial markets and in business circles. However, undertaken enthusiastically and earnestly, fully its success cannot be measured by the size of its aware of the difficulties inherent in the post. His assets nor by the scope of its influence alone. It is untimely death April 11th, 1973, was deeply felt in rather judged by the manner in which it carries circles where he had worked. It is fitting to recall out its dual mandate of trustee