A funding issue

The Caisse de depot et placement du Quebec is experiencing serious liquidity problems. Says an internal document for some applicants, a copy of which was obtained by Radio-Canada.

The Caisse manages about $ 150 billion belonging to seven major depositors. Of this amount, several tens of billions of dollars are invested abroad. To protect investments against fluctuations in the dollar, the Fund ensures through derivatives.

Usually, the Fund provides 100% most of its investments abroad. However, things are changing. The document obtained shows that the Fund has reduced from 100% to 90% the level of coverage of its foreign investments.

According to the portfolio manager Jean-Luc Landry, a sure sign that the Fund is unable to meet its usual expenses.

In markets, at this moment, there is no liquidity. Besides government bonds, treasury bills or federal government, even the obligations of provinces are not traded very well. So this is probably not easy for the Fund is currently trying to sell securities to maintain these contracts.


Richard Guay, who was appointed to head the Caisse de depot et placement du Quebec on 5 September by the Minister of Finance, Monique Jérôme-Forget, must now rest.

An internal memo sent to employees of the Fund confirms that a Montreal newspaper announced Thursday morning. Mr. Guay, 47, was put to rest for a month by her doctor.
Richard Guay


Upon request, is Fernand Perreault, Senior Vice President, Real Estate group, which takes over and coordinates the affairs and business plan of the Fund during its period of rest.

The memo states that the Fund "Mr. Perreault and other members of the management team continues the progress of cases under way and take the decisions required by the current market. Perreault also chairs meetings of the board. "

Mr. Guay has left the body on November 12 and should be back in his post early next December 10.

Richard Guay had already served as president and CEO ai of the institution since the departure of Henri-Paul Rousseau Power for the group last May.


Questioned by journalists, politicians are not unanimous. Premier Jean Charest, said there was no worry.

"CDP is a great institution with a long history, which has very deep roots and will operate regardless of the circumstances. This is not the case with one person on the contrary. This is a great institution that is strong and will function as it should, "said Mr. Charest.

The leader of the Parti Quebecois, Pauline Marois, is not the same opinion. "I would not like it has an impact because the Fund already filing is faced with very large problems, I am convinced. It started with commercial paper backed by assets. Now, the fall in stock markets. I hope this to rest CEO of the Fund will have no impact because this would be a disaster for us, but this is not good news, we will agree, "she said.


The spokesman for the ADQ in finance, Gilles Taillon, said not wanting expand on the subject, but denounced what he called the "lack of transparency" of the Fund and the "climate of suspicion "that surrounds it. "Our interest is to have the check-up of the Fund, we insist on that, not the check-up of its leaders," he said.

It therefore calls Finance Minister Monique Jérôme-Forget, for it gives the portrait of the financial situation of the Fund. "The responsibility of the Caisse de depot, the finance minister can not outrun them. She is the minister. It belongs to answer, "he added.

Recall that, in recent weeks, the ADQ believes that the Fund has lost 30 billion this year due to the financial crisis.


In addition, the Fund removes 10 posts allocated to international markets. The Fund said that the return generated did not justify the costs and efforts in this area.

It also asserts that the decision stems from an assessment that was made for several years and it has nothing to do with the current financial crisis.

The Fund says that people finally laid off could be offered another job within the Fund.