For the Caisse de dépôt et placement du Québec, 2023 was the year in which the REM and the Quebec tram in public spaces took precedence over its work as a fund manager.
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After years of planning, construction and testing, the Réseau express métropolitain was inaugurated with great fanfare at the end of July, in the presence of Prime Ministers François Legault and Justin Trudeau, Montreal Mayor Valérie Plante, Caisse CEO Charles Emond, his predecessor Michael Sabia and former Prime Minister Philippe Couillard.
Philippe Couillard and Denis Coderre at the inauguration of the REM in July. Photo agency QMI, JOEL LEMAY
The REM quickly found itself in the headlines for all the wrong reasons: repeated breakdowns, disturbing noise in the neighborhood, inadequately adapted stations for users with reduced mobility, poor signage, poor communication with customers, etc.
“We need to regain people’s trust,” confirmed Marc Boucher, senior vice president at AtkinsRéalis, one of the Caisse’s suppliers, in early December.
The REM will ultimately cost nearly $8 billion, 45% more than planned when the project was announced in April 2016.
Provided, of course, that there are no new cost overruns for the commissioning of the sections to Deux-Montagnes, Montreal-Trudeau Airport and Sainte-Anne-de-Bellevue. Currently only the section to Brossard is open to travelers.
The difficulties that the Caisse had with the REM did not prevent the Legault government from giving it three more mandates in the infrastructure sector this year.
University campus
In June, Quebec asked the institution to study creating a “world-class inter-university city” on part of the site of the former Royal Victoria Hospital in Montreal.
Photo from the website citeuniversitairemtl.com
Then, in November, the government tasked the Caisse with the task of trying to restart Quebec's tram project, whose estimated cost now exceeds $8 billion.
A few days later, Deputy Prime Minister Geneviève Guilbault added to this already strict mandate a further review of the Third Link project between Quebec and Lévis.
“As always when a new file is reviewed, a small dedicated team is formed,” explains Kate Monfette, spokeswoman for the fund.
“External companies are also brought in to support the teams,” she adds.
Finance and politics
Without really intending to, the Caisse is therefore immersed in an exercise with a strong political character, particularly in the case of the two projects in the Quebec region.
The decision to appeal to the Caisse in so many cases may be surprising, considering that the government has asked it to withdraw from the REM de l'Est project in 2022. Quebec thus responded to the numerous criticisms that the path proposed by the institution aroused.
Despite everything, Yan Cimon, professor of strategy at Laval University, believes the government did well to seek advice from the Caisse.
“It is always a good idea to get an outside opinion, especially as the fund is now very active in the infrastructure space,” he emphasizes.
Image provided by Alstom
According to him, the institution is well positioned to develop a financial package “that could help overcome the impasse” in which the tram project is stuck.
In the longer term, perhaps it is the method of infrastructure planning that needs to be (re)examined.
“The fund cannot be the answer to all the problems associated with the development of large projects,” says Mr Cimon.
The year 2023 for the Caisse in brief
Mixed returns
The Caisse returned 4.2% in the first six months of 2023, a performance comparable to other major Canadian investors. However, over five years, the fund's annual return continues to lag those of CPP Investments and the Ontario Teachers' Pension Plan.
Celsius: A head rolls
Alexandre Synnett Photo from the Caisse de dépôt etplacement website
A little over six months after the loss of $200 million in the collapse of the American crypto bank Celsius Network, the first heads rolled in this embarrassing affair for the fund. Alexandre Synnett, the previous head of technology, left the institution in February. Today he is vice president at CGI.
Investments in troubled waters
The Caisse's massive investments in France's Alstom and India's Azure Power Global have caused another headache for the institution this year. The shares of both companies crashed on the stock market. The Caisse also lost most of its $50 million investment it made in 2019 in Bird Global, an electric scooter network operator that just declared itself insolvent.
Quebec Inc. in its sights
Cogeco, Solotech, Avenir Global, Vooban, Savaria, Norda Stelo, AMB Modulaire, Workleap… The Caisse has increased its investments in Quebec companies in 2023. On the other hand, the institution has not managed to maintain its university headquarters. Select, Logistec and H2O Innovation. His attempt to reinvest in RONA also failed.
Departure from China
Photo from the Caisse de dépôt etplacement du Québec website
The fund has just closed its Shanghai office. The institute has been present in China since 2009. Investments in the country will now be managed from Singapore. The Caisse has reduced its exposure to China in recent years but still holds controversial investments, particularly in companies accused of exploiting the Uyghur minority.
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