Officials at Caisse de Depot et Placement du Quebec, Montreal, plan to further export to other countries their concept of direct infrastructure investment through the building of light-rail systems.
That was one of several topics in a wide-ranging Jan. 9 interview with Michael Sabia, president and CEO of the C$308.3 billion ($230.4 billion) CDPQ, which manages the assets of the C$78.5 billion Quebec Pension Plan and other public pension and insurance funds in the province.
Among other subjects were:
- The investment impact from strained Canada-China relations following the Dec. 1 arrest of Meng Wanzhou, the chief financial officer of Chinese tech giant Huawei Technologies Co.
- The state of investment in the U.S. after successful renegotiation of the former North American Free Trade Agreement with its southern neighbor and Mexico.
- The lessons CDPQ has learned from recent geopolitical turmoil.
- CDPQ's interest in cannabis, cryptocurrency and technological advancement.
Mr. Sabia said the progress made in CDPQ's light-rail project in Montreal, Reseau Express Metropolitain, has attracted the attention of other institutions that are considering helping build transportation infrastructure in their countries. He cited a joint project with the NZ$39.3 billion ($26.5 billion) New Zealand Superannuation Fund, for a light-rail system in the superannuation fund's home base of Auckland that's "in the planning stage. For them and ourselves, this will pay out returns, and we can manage the greenfield risk."
Montreal's REM construction, which will connect the downtown area with the city's Pierre Elliott Trudeau International Airport along with the west and northwest suburbs, began in April with a scheduled completion in 2021. "Here in Montreal, this is no longer a plan — it is happening," Mr. Sabia said.
Of the C$6.3 billion total REM project cost, half is being covered by CDPQ, with the other half split between the Quebec and Canadian governments, Mr. Sabia said.
"There's also been interest in the U.S." for a similar partnership, Mr. Sabia said, although he would not say which U.S. entities have approached CDPQ. He added that CDPQ wouldn't rush into those projects. "We need to walk before we run," Mr. Sabia said. "People have been skeptical. But will we export this? Absolutely. We think this is a differentiator for us."
Some of the skepticism Mr. Sabia referred to involves the view that such an investment, part of CDPQ's C$22 billion in infrastructure, is potentially divergent from the manager's role as a responsible fiduciary of retirement assets. But Mr. Sabia said that's not the case — not only with REM but also with other sustainable investments that CDPQ has done.