By calling a vote for last December, Quebec Premier Jean Charest was able to campaign for re-election before the extent of losses suffered by his province's pension fund was known. Now that Mr. Charest has been returned to power with a majority government, and the Caisse de dépôt et placement du Québec found to have lost a staggering $39.8-billion in 2008, the least he could do is make a full effort to shed light on what went wrong.
Most pension funds have suffered losses during the economic downturn, but due in part to having too much faith in asset-backed commercial paper, the Caisse's losses – which total 25 per cent of its value – are unusually high. The consequences of its mismanagement, which has led Standard & Poor's to reconsider its top rating on the Caisse's public debt, are not just practical but symbolic. As the largest fund of its kind in Canada, managing the assets of 25 provincial pension and insurance funds, it is supposed to represent the province's ability to take charge of its economic future. Instead, it has left Quebec even more vulnerable to the effects of the recession than it otherwise would be.
Little of this can be attributed directly to Mr. Charest, but neither should he be able to escape key questions about his government's oversight.
Although former sovereigntist premier Jacques Parizeau – an architect of the Caisse – clearly has his own agenda, his insistence that the government must have known about the Caisse's problems long before they became public merits investigation. So, too, do allegations that Mr. Charest's changes to the fund's management structure and to its mandate, shifting away from economic development in favour of focusing solely on increasing its returns, led to instability and too much eagerness to take risks.
Mr. Charest does not likely bear half the responsibility that the Parti Québécois is insinuating – former Caisse president Henri-Paul Rousseau denied yesterday that political interference was a problem – and claims of a cover-up are unsubstantiated. But the Premier's retort that it is irresponsible for the opposition to talk down the Caisse, like Finance Minister Monique Jérôme-Forget's insistence that it is time to look forward rather than backward, is a suboptimal way to convince the public that the government has nothing to hide.
Former premier Pierre-Marc Johnson, who headed the public inquiry into a collapsed overpass, said yesterday that a similar inquiry into the Caisse's problems would only “satisfy short-term, political and partisan interests.” Be that as it may, Mr. Charest should at least appear before a National Assembly committee to help explain what went wrong, as should Ms. Jérôme-Forget. The fact that they will not have to face voters any time soon should help them overcome their reluctance.