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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.
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