Press Release

19 million dollars of shame
Canadian pensioners' profit from global tobacco use.

Ottawa - May 28, 2010

On the eve of World No Tobacco Day (May 31st), Physicians for a Smoke-Free Canada (PSC) is renewing its call for Canada’s mandatory public pension plans to stop funding multinational tobacco companies.

“The Canada Pension Plan and Quebec Pension Plans are part owners of Philip Morris, British American Tobacco, Japan Tobacco and other multinational tobacco companies,” explained PSC’s Executive Director, Cynthia Callard. “Investing pension funds in these companies fuels the spread of tobacco use into some of the most impoverished and vulnerable parts of the world.”

Workers in Canada are required to participate in either the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP). Employer and employee contributions to these funds total 9.9% of each worker’s salary up to a current maximum of $4237 per worker.  These mandatory contributions are invested by the Canada Pension Plan Investment Board (CPPIB) or the Caisse de dépôt et placement du Québec (CDPQ). 

Physicians for a Smoke-Free Canada reviewed the investment reports of both public pension investment agencies for 2009/2010 and found the total value of tobacco industry shares exceeds $500 million.  Dividends paid by tobacco companies to the two agencies were estimated by PSC to have totaled in excess of $19 million on 2009 tobacco industry profits. This is more than 30 times the average annual amount ($633,000) the government of Canada reportedly spent between 2007 and 2010 to support international tobacco control efforts.

“Canadians should be helping developing countries get rid of tobacco use,” said Ms. Callard. “Instead, we are profiting from the addiction, disease and early death of citizens of other countries.”
PSC maintains that CPP/QPP investments in tobacco companies are entirely against the spirit and recommendations of the global tobacco treaty, the Framework Convention on Tobacco Control (FCTC). “In 2008, the government of Canada supported treaty recommendations to end this practice, yet no action has been taken to change the policies of public pension plan investment agencies,” said Ms. Callard.
Guidelines on the interpretation of Article 5.3 of the FCTC state that ‘Parties that do not have a State-owned tobacco industry should not invest in the tobacco industry and related ventures’ and that ‘Government institutions and their bodies should not have any financial interest in the tobacco industry, unless they are responsible for managing a Party’s ownership interest in a State-owned tobacco industry.’

The vast majority of 168 parties to the FCTC do not have funded public pension programs such as the CPP/QPP. Among countries that do invest pension contributions in the open market, some, notably New Zealand and Norway, have recently sold off all their tobacco industry holdings.

“The investment strategies of the Canada Pension Plan Investment Board and the Caisse de dépôt et placement du Québec are inconsistent with Canada’s obligations under the FCTC and incoherent with Canadian values and the protection of human life,” explained Ms. Callard.  The CPPIB’s Responsible Investing Policy calls for engagement with corporate managers to ‘enhance long-term financial performance’ of the companies in which it invests. 

“Rather than sustain the long-term financial performance of tobacco companies through expanded markets, Canadian efforts should be combined to ensure sustained reductions in tobacco use everywhere,” said Ms. Callard.


For more information: 

Cynthia Callard  613 233 4878                      

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