Does it make sense that your Canada Pension Plan dollars — which are designed to ensure that you have an adequate income after retirement, disability, or death of a family member — are being invested in the tobacco industry? I’m with the Canadian Medical Association and the Canadian Cancer Society in saying no. As Cynthia Callard of Physicians for a Smoke-Free Canada puts it, “I certainly don’t want blood on my pension cheque.”

Unfortunately, the Canada Pension Plan Investment Board, the Crown Corporation which has had responsibility for investing CPP money since 1997, says yes. As of June 30 of this year, the CPP owned 2,499,000 shares — worth $94.3 million — in a total of ten tobacco companies.

Jay Duncan, the Brandon doctor who sponsored the resolution passed by the Canadian Medical Association (CMA), calls this situation “absurd.” He argues that “it’s perverse that an arm of the government is supporting an industry that kills more than 40,000 Canadians a year and maims many more. We spend all this time and money on anti-smoking campaigns and then turn around and invest in an industry whose sole purpose is to addict the next generation. It totally undermines our national tobacco strategy.”

René Gallant, President of the Canadian Cancer Society, wrote earlier this year, “We understand it is the mandate of the Investment Board to maximize returns without undue risk. However, in ensuring against undue risk, we believe it is also the Board’s responsibility to ensure we not cause undue harmâe¦ Tobacco products are unique. They are the only products legally available on the market that kill when used exactly as the manufacturer intends.”

John MacNaughton, President and Chief Executive Officer of the Investment Board, says he is “categorically opposed” to any restrictions on where CPP funds can be invested. The Investment Board’s mandate is to make money, he argues, and no rules that conflict with that goal should be put in place. “Pension funds are not vehicles for advocacy groups to advance their objectives, however worthyâe¦ Let’s not get on a slippery slope that puts at risk the retirement income security of the millions of Canadians who are counting on the Canada Pension Plan.”

While the act that established the Investment Board does require it to seek a “maximum rate of return,” it also requires it to set out investment standards “that a person of ordinary prudence would exercise in dealing with the property of others.” A person of ordinary prudence would not invest in tobacco. A poll by the Canadian Democracy and Corporate Accountability Commission shows that “51 per cent of Canadians wants their pension plans to invest in companies with a good record on social responsibility, even if this means ‘somewhat lower benefits’ for themselves. Only 36 per cent wanted investments restricted to companies making the highest profits.”

The Investment Board has adopted what it calls a social investment policy. According to the policy, it “will not accept or reject investments based on non-investment criteria.” That sounds like something straight out of a Monty Python sketch: “And now we present our social investment policy. There is no social investment policy.”

The policy does go on to state that “as a rule, we believe that companies that respect the environment, human rights, fair employee practices, community relations and otherwise act in an ethical manner tend to perform better over the long term.” So, if this is what the Investment Board really believes (and there is plenty of evidence to suggest that this is true), then why is it investing in tobacco companies?

The Investment Board sank even further into the ethical tar pond in April when it used its voting power to help defeat shareholder resolutions that, among other things, would have required Philip Morris to add Canadian-style health warnings to its products. “The Canada Pension Plan Investment Board rejected each and every one of the health proposals,” reports Callard. “They voted against warning women of the harmful effects of smoking on the fetus, they voted against testing cigarette filters for safety, they voted against disclosing political contributions, they voted against ending the use of misleading terms like ‘light’ and ‘ultralight’ on cigarettes. Most surprisingly, Canadian pension contributions were used to help defeat a motion to require Canadian health warnings.”

If the Investment Board won’t act responsibly on its own, it is up to politicians to force them to act. Any changes to the act which set up the Investment Board require the approval of both the federal government and two-thirds of the nine participating provinces (representing at least two-thirds of the population of those provinces). The government of Manitoba has already requested such a review, and it’s scheduled to take place in 2005.

So, where is the federal government in this debate? Encouragingly, Health Minister Ujjal Dosanjh has said he doesn’t believe that “any government funds should go to the coffers of tobacco companies.” But Finance Minister Ralph Goodale, always eager to take a brave and decisive stance on an issue, has said only that he “would welcome” a discussion on the matter. Clearly, Goodale hasn’t been listening to the debate that is already well underway. It’s time for the federal government to come down firmly on the side of health. It’s time for it to end the CPP’s addiction to tobacco.

picture-2299.jpg

Scott Piatkowski

Scott Piatkowski is a former columnist for rabble.ca. He wrote a weekly column for 13 years that appeared in the Waterloo Chronicle, the Woolwich Observer and ECHO Weekly. He has also written for Straight...