Canada Plan (CPP): Mandatory Investments in the Business of War By Susan Thompson, Philip Kienholz Through mandatory contributions to the CPP, and Richard Sanders. Canadian citizens are currently being forced by the ll Canadians over 18 years of Liberal government to invest $2.5 BILLION age make mandatory Canada in domestic and foreign military corporations. APension Plan (CPP) payments Included among the war industries in which Canadians must throughout their working lives. There are currently some 16 million Canadi- invest are many of the world’s largest arms producers. ans who have contributed to, or who countable for the investments that they benefit from, the CPP. Upon retire- nevolent and humanitarian intent of make on behalf of Canadians. It is also ment, Canadians who have paid into the CPP’s role to supplement the re- distressing that Canadians have no the CPP, are entitled to receive monthly tirement income of Canadians. way to stop their money from being in- pension payments. When Canadians retire and vested in unethical corporations. Nei- CPP Investment Board (CPPIB) claim their , they receive mon- ther is there any mechanism for Cana- is a private investment corporation – ies from investments in corporations dians to withdraw their CPP invest- independent from the government – that profit from war. For people of con- ments from corporations which they do that manages all the monies contrib- science who want to promote peace, it not wish to support. uted by Canadian workers. Most of is unacceptable to be forced to invest It is ironic that the wellbeing the money is invested by buying shares in military products and services that of the elderly is linked, in part, to in- in publicly-traded Canadian and for- are used to facilitate the waging of vestments in military corporations that eign companies (i.e., public equities). wars. Many Canadians do not want to benefit at the expense of innocent peo- depend on war. If wisdom is to come It’s Mandatory ple who inevitably die in war. with age, what a grievous short- to Invest in War! Over the past 100 years, the circuiting of logic to try to inform the The CPPIB is investing in at least 170 percentage of civilians among war wise that war is good business, and will corporations with military contracts. casualties has continued to increase. support them in their golden years. Canadian workers are therefore being Nowadays, the vast majority of war The War in Iraq forced to invest their earnings in mili- victims are not military combatants, but innocent civilians. Their deaths Questioning the CPPIB’s investments tary corporations. These military in- in war industries is even more impor- vestments inherently contradict the be- are callously termed “collateral dam- age.” The profits of military contrac- tant because most Canadians oppose CPP Investments in tors increase during war, and those the latest U.S.-led war in Iraq. There the World’s Top 20 profits depend on the continuing need is a widespread misperception that the for wars. Fundamentally, such mili- Canadian government took a stand Military Corporations tary profit and civilian deaths are an against participation in this war. The unethical, vicious circle. CPPIB, however, is still investing in total $118 million corporations that are facilitating, and Corporation Country CPP Withdrawing our Consent profiting from, this illegal conflict. 1. Lockheed Martin USA ü Most Canadians are, however, prob- Most Canadians probably do not real- 2. Boeing USA ü ably unaware that the CPPIB invests ize that through their CPP investments 3. Raytheon USA ü in military corporations. We believe in the world’s top arms industries they 4. BAE Systems UK ü that if Canadians were aware that their are complicit in profiting from this 5. Northrop Grumman USA ü pension money was being invested in war, whether they like it or not. 6. General Dynamics USA ü ü industries that profit from war, most CPPIB on Ethics 7. Thales France would disapprove. Unfortunately, even 8. EADS Netherlands ü if Canadians were aware of the unethi- The CPPIB says that it maintains a 9. Finmeccanica Italy strictly limited form of social invest- 10. Honeywell USA ü cal nature of the CPP’s investment strategy, there is no apparent, legal way ment policy. The CPPIB’s Board states 11. L-3 Communication USA that “companies that respect the envi- 12. SAIC USA to conscientiously object. ronment, human rights, fair employee 13. Mitsubishi Heavy Ind Japan ü Because the money invested by 14. General Electric USA ü the CPPIB is obtained through a fed- practices, community relations and 15. DCN France eral government mandate, it is not un- otherwise act in an ethical manner tend 16. Rolls Royce UK ü reasonable to demand that the CPPIB to perform better over the long term.” ü The CPPIB makes clear, however, that 17. GKN UK ü be made more democratic. 18. Computer Sciences USA Although the CPPIB claims to its primary mandate is to maximize 19. Alliant Techsystems USA be responsive to public concerns, there profit and that although “[s]ome Ca- Source: This ranking for 2002, is from are no means to hold the CPPIB ac- nadians are concerned that CPP assets Defense News, July 21, 2003. may be invested in companies and 4 Press for Conversion! Issue # 52 October 2003 countries with whose activities or poli- Table 1: CPP Investments in Canadian cies they do not personally agree,” it is impossible for the CPPIB to address Military Contractors, 2003 these concerns. Market Value The CPPIB’s stated excuse for Corporation Location(s) ($ Cdn) ignoring the ethical implications of its investments is two-fold. They say that: Aastra Technologies Concord, BC 6,733,000 (1) the legislation governing the Atco Ltd , AB 24,426,000 CPPIB does not permit investment ATI Technologies Thornhill, ON 66,004,000 screening for ethical reasons, ATS Automation Tooling Sys Cambridge, ON 16,912,000 (2) “While social investing is eas- Ballard Power Systems Inc Burnaby, BC 40,438,000 ily applied by individuals and small Bombardier Inc Class B Dorval, QC 136,057,000 groups of like-minded people, it is ex- Bombardier Inc Class A Conv Dorval, QC 2,403,000 tremely difficult, if not impossible, to CAE Inc , ON 26,126,000 implement for an institutional inves- Cameco Corp Saskatoon, SK 50,560,000 tor representing over 16 million con- Celestica Inc Kirkland, QC; N.York, ON 81,789,000 tributors and beneficiaries with a wide CGI Groupe Inc Montréal, QC 46,368,000 cross-section of personal beliefs.” CHC Helicopter Corp St. John’s, NF 11,031,000 (www.cppib.ca/how/social/index.html) Cognos Inc Montréal, QC; Ottawa, ON 66,607,000 Com Dev International Inc Cambridge, ON 1,841,000 The CPPIB’s argument against ethi- Dupont Canada Inc Mississauga, ON 33,707,000 cal investment errs on both counts: Finning International Inc Vancouver, BC 51,140,000 (1) Legislation can be changed to Geac Computer Ltd Markham, ON 10,362,000 reflect the will of the people. What leg- Gennum Corp Burlington & Kanata, ON 10,399,000 islation permits is relevant only as long Global Thermoelectric Inc Calgary, AB 2,205,000 as Members of Parliament retain such GSI Lumonics Inc Kanata, ON 8,670,000 legislation and regulation. If Canadi- Héroux Devtek Inc. Longueuil, QC 2,952,000 ans demand that their retirement pen- Hummingbird Ltd Toronto, ON 11,287,000 sion funds be invested ethically, then Husky Injection Molding Systems Bolton, ON 7,559,000 that can be made possible by an act of Parliament, and Id Biomedical Vancouver, BC 10,246,000 (2) Governments do govern masses Intertape Polymer Group St. Laurent, QC 6,348,000 of people. Various ethics, morals, codes Leitch Technology Corp North York, ON 3,165,000 of conduct and other guides to indi- Linamar Corp Guelph, ON 11,803,000 vidual and collective behaviour, are Macdonald Dettwiler & Assoc Richmond, BC 15,894,000 expressed in modern governance. Say- Magellan Aerospace Corp Mississauga, ON 2,392,000 ing that to do this within the realm of Magna International Inc Aurora, ON 178,696,000 finance is extremely difficult, if not im- Martinrea International Inc Vaughan, ON 9,740,000 possible, is to ignore the fact that gov- MDS Inc Ottawa, ON 54,226,000 ernments deal with such difficulties all Nortel Networks Corp Ottawa, ON 291,011,000 the time, and they do manage to es- Open Text Corp Waterloo & Ottawa, ON 17,260,000 tablish reasonable and supportable lim- Research In Motion Ltd Waterloo, ON 39,904,000 its on behaviour. Shawcor Ltd Etobicoke, ON 15,868,000 Ethical investment practices are Shell Canada Ltd North York, ON 75,784,000 at times widely discussed and adopted SNC Lavalin Group Inc Montréal, QC 47,104,000 even among some large corporations. Stantec Inc Edmonton, AB 7,662,000 The CPPIB should be able to do so as Stelco Inc Hamilton, ON 2,615,000 well. This would simply require cre- Stratos Global Corp St. John’s, NF 6,011,000 ating, and then following, clear ethi- Suncor Energy Inc Calgary, AB 236,218,000 cal investment guidelines. This would Teck Cominco Ltd Toronto, ON 41,712,000 no doubt take time and effort but it Tesma International Inc Concord, ON 11,070,000 would be a worthwhile endeavour. Toromont Industries Ltd Toronto, ON 17,851,000 Canadians should inform the Vector Aerospace St. John’s, NF 1,469,000 CPPIB, their federal government and Wescast Industries Inc Brantford, ON 4,483,000 the media that they do not want their Westport Innovations Vancouver, BC 1,184,000 pensions to grow at the expense of in- Zarlink Semiconductor Inc Ottawa, ON 20,903,000 ternational peace and human rights. Zenon Environmental Inc Ottawa, ON 6,323,000 Canadians should demand that the Total 1,852,518,000 CPPIB stop investing their pension money in corporations that profit from Source: Canadian Equity Holdings (as of June 30, 2003), CPP Investment the business of war. Board. www.cppib.ca/invest/holdings/pubequity/Canadian_Equity_Holdings.pdf October 2003 Issue # 52 Press for Conversion! 5