It’s time for the balance sheets of the Caisse de dépôt and the almighty Economy Minister Pierre Fitzgibbon. While the former was able to hold its own despite weakening markets, the latter experienced another turbulent year.
After several years of underperformance, the Caisse announced in February that it had returned 13.5% in 2021, nearly three points higher than its benchmark portfolio.
However, one investment made in late 2021 haunted the institution for much of the year: the $200 million bet on Celsius Network, an American crypto bank.
The Celsius fiasco
“No one at the Caisse – me first – is happy with the outcome of this case,” Caisse CEO Charles Emond admitted in August, recalling that he and his colleagues had “good intentions” in targeting cryptocurrencies take.
Yan Cimon, professor of management at Laval University, doesn’t take the Caisse too seriously because – like other big investors – it has ventured into this unpredictable sector.
“This could be an opportunity to reflect on the due diligence and investment criteria we want to set for newer and less well-regulated sectors,” he says.
Acceptable return
Despite this misstep, the Caisse finished the first half of 2022 ahead of its peers. It returned -7.9%, beating the -10.5% of its index.
For his part, Mr Fitzgibbon started the year with the reform of the Essor scheme, the government’s main tool for providing financial support to businesses. Faced with labor shortages, the program is now aimed less at creating jobs and more at increasing productivity, even if this means a fall in the number of workers.
In June, the minister announced the end of programs to help the private sector deal with the pandemic. From spring 2020 to September 2022, 1,479 companies have benefited from the most important of these programs, the PACTE. They have received over $1.2 billion in loans or loan guarantees.
More help for companies
The PACTE has further inflated the subsidies that the Department of Commerce has paid to companies. For the fiscal year ended March 31, the total exceeded $1.6 billion, or 40% more than the year before.
Following the Legault government’s re-election in October, Pierre Fitzgibbon became “super minister”, adding the energy dossier – more specifically that of Hydro-Québec – to his responsibilities relating to the economy and innovation.
But it was government issues that marked the end of Mr. Fitzgibbon’s year.
In October, Le Journal announced that Quebec had invested nearly $150 million in six companies owned by a firm owned by Michel Ringuet, the minister’s former trustee. At the request of the Parti Québécois, Ethics Commissioner Ariane Mignolet launched what will be the fifth investigation against Pierre Fitzgibbon.
“It’s a direct issue of conflict of interest,” said Saidatou Dicko, professor of accounting at UQAM and specialist in governance.
hunting the rich
Then, in December, our Bureau of Investigation learned that the minister was attending a hunting party on a private island owned by wealthy businessmen, including Paul Desmarais Jr., Jean-Louis Fontaine, and Louis Vachon. Outcome: Ms Mignolet opened a sixth investigation into Mr Fitzgibbon.
Increasingly irritated by the media scrutiny of his decisions, the minister accused a Journal reporter of “bad faith” by asking questions about the $5 million legacy he left at his alma mater HEC Montréal this fall. This unusual excursion met with disapproval from the opposition and the Quebec Journalists Association.
Some key dates for the Caisse and Superminister Fitzgibbon in 2022
January 18th
Photo from the Énergir website
The headquarters of natural gas distributor Énergir in Montreal.
The Caisse is investing more than US$400 million to increase its stake in Énergir. Today, Quebecers Wool Socks and Solidarity Fund QFL are the sole shareholders of the gas and electricity distributor, making it a pure Quebec company.
8th June
Photo from Luc LaPerrière’s Facebook page
Luc Laperrière, friend of Pierre Fitzgibbon
Minister Pierre Fitzgibbon ate with his friend Luc Laperrière on the eve of the announcement of a $98 million public investment in Polycor, according to Le Journal. However, Mr. Laperrière has held two representation mandates from Polycor in recent years. The company is a major player in the natural stone sector for construction and renovation.
July 13th
Photo from the Celcius Network Twitter account
The founder and former big boss of the “cryptobank” Celcius Network Alex Mashinsky.
Insolvent, the American “crypto bank” Celsius Network, in which the Caisse de dépôt invested around 200 million dollars in October 2021, is protecting itself from its creditors. The institute quickly wrote off the investment from its financial statements and didn’t expect to be able to recoup it.
October 24th
Linkedin screenshot
Le Journal writes that the Legault government has invested $50 million in LMPG, a company whose director is Michel Ringuet, former trustee of Minister Pierre Fitzgibbon. In total, nearly $150 million has been invested by Quebec in companies in which Mr. Ringuet’s firm has an interest in 2020 and 2021.
December 8th
Our investigative office reveals that Pierre Fitzgibbon took part in a pheasant hunt on a private island in Lake Memphremagog owned by a group of wealthy businessmen including Paul Desmarais Jr., Jean-Louis Fontaine and Louis Vachon. Companies belonging to some of them have been eligible for financial support from the government in recent years.
December 22
Photo Pierre Paul Poulin
Lightspeed Commerce headquarters in Montreal. The company specializes in POS systems and payment solutions for companies. It has more than 150,000 customers in around 100 countries.
The Journal notes that the Commerce Department bought $49 million worth of Lightspeed Commerce stock in July without immediately disclosing it publicly. “Given the time leading up to the elections, it was decided not to announce the intervention,” said Mathieu St-Amand, spokesman for Minister Fitzgibbon.
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