It’s clear this has been yet another challenging year for Canadians and whether you are close to retirement or decades away, rest assured your Canada Pension Plan (CPP) continues to be strong and resilient delivering solid results for the 21 million people it serves.
We designed a long-term investment portfolio that can navigate through market cycles and economic uncertainties. It’s this prudent and measured approach that has helped grow the Fund to $576 billion, achieving a 10-year annualized net rate of return of 9.6% as of September 30, 2023. Indeed, in its most recent review, the Chief Actuary of Canada, asserted that the Fund will be sustainable for at least 75 years.
The Fund’s steady growth has made it a foundation of financial security that Canadians can count on to support their retirement. This is a responsibility that we never lose sight of, and it guides every aspect of our organization.
2023 highlights
This year, we’ve strived to set the bar ever higher. It’s a commitment we make to ourselves and to all Canadians.
- We were recognized as one of the top-performing pension funds in the world over the past decade.
- We joined with Canada’s leading pension plans to encourage the companies in which we invest to embrace the new International Sustainability Standards Board disclosure framework, The model is designed to improve trust and confidence in their communications and business activities.
- Our business operations achieved carbon neutrality for the fiscal year 2023. For the emissions we haven’t been able to reduce, we offset with high quality, verifiable carbon credits from the Darkwoods Forest Carbon Project in British Columbia.
Investment Activities
We continue to invest in a wide range of asset classes in many different parts of the world. Our investing professionals look for investments that will deliver out-sized returns over the very long term. Here are just a few of note:
- We partnered with Silver Lake, a U.S. private equity investor, to purchase management software leader Qualtrics for US$12.4 billion. One of the largest technology buyouts of the year, this acquisition reflects our ongoing engagement in the innovation space.
- We committed C$200 million to investments in Canadian buyout and growth funds, secondary investments, and direct co-investments through our partnership with Northleaf Capital Partners a Canadian private markets investment firm.
- We signed a C$143-million partnership with European energy firm Power2X to finance projects that will work to decarbonize industrial operations through renewable energy sources.
A Fund for Canada
On sustainability, we see generational opportunities in the economic transformation now underway. We continue to integrate climate risk into all our investment decisions and have committed the Fund to net-zero emissions by 2050. One of the ways we’ll achieve this is by financing decarbonization efforts in high-emitting sectors.
We‘re invested in Wolf Midstream, a Calgary-based energy midstream company that recently commissioned a natural gas liquids project in Alberta. It created over 750 jobs during construction and contributes to carbon emissions reduction in the province. Our backing of Wolf, along with our partnership with Canadian energy leaders such as Enbridge, highlight the investment and innovation opportunities in this vitally important component of the Canadian economy.
Looking ahead
While it’s impossible to predict what the year ahead will bring, we can be reasonably sure of a few things. Generative AI, which soared into prominence this year, promises to be an increasing presence in our lives. Higher inflation and interest rates will likely remain a pressure, and geopolitical currents will continue to shape world affairs.
Times like this call for a steady hand and a patient approach. Canadians can be confident that we are well positioned to pursue the most attractive investment opportunities, always with the aim of safeguarding your financial future in retirement.
I am constantly reminded of how lucky we are to live in this country, home to one of the most secure pension plans in the world. At CPP Investments, we’re immensely proud of the role we play in strengthening the CPP and want you to know it will be there for generations to come.
Thank you for your trust,
John Graham
President & CEO
CPP Investments
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A Fund for Canada
Times like this call for a steady hand and a patient approach. Canadians can count on us.
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