Low-tax jurisdictions : La Caisse aims to avoid the double taxation of Québecers

MONTRÉAL, May 2, 2017 /CNW Telbec/ - Following the publication of a report by the Journal de Montréal this morning, la Caisse reaffirms its commitment to protect and invest Québecers' funds while adhering to the spirit and letter of all applicable tax laws.

First, as a public pension fund, it should be noted that la Caisse pays no tax in Québec and Canada. La Caisse's investment returns are taxed when retirees receive their pension benefits. As such, the tax framework applicable to la Caisse is similar to that of registered retirement savings plans (RRSP), under which contributions and investment returns are tax-exempt, but withdrawals are taxable.

Because retirees are taxed when their pension benefits are paid, any taxation of la Caisse's investment returns represents a form of double taxation of retirees' savings, which reduces the amount of their benefits. Indeed, in such cases, retirement savings are taxed once at la Caisse's level, and a second time when pension benefits are paid. This double taxation is unfair for Québec retirees. For this reason, la Caisse seeks to limit double taxation as much as possible.  

"La Caisse follows the tax rules and regulations of all countries in which it invests. Our objective is simple: avoiding the double taxation of Québecers – once in foreign jurisdictions, once in Québec – which would be unfair," said Maarika Paul, Executive Vice-President and Chief Financial Officer of la Caisse.

Second, in most cases, la Caisse gains no fiscal benefit from the use of low-tax jurisdictions, because its investments would already be tax-exempt. In such cases, these jurisdictions are chosen for legitimate business reasons such as (1) a legal framework that allows for the simple and efficient pooling of capital, (2) access to expert managers, and (3) lower management fees resulting from the pooling of capital from investors all over the world. 

Finally, la Caisse is not insensitive to the improper use of low-tax jurisdictions. La Caisse supports the spirit and letter of ongoing international initiatives, including the OECD's BEPS project, which seeks to eliminate improper use of low-tax jurisdictions. La Caisse also works with its international partners to structure investments in jurisdictions in which la Caisse benefits from tax exemption agreements. 

Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2016, it held $270.7 billion in net assets. As one of Canada's leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure and real estate. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.


SOURCE Caisse de dépôt et placement du Québec

For further information: Maxime Chagnon, Senior Director, Media and Public Relations, + 1 514 847 5493, mchagnon@cdpq.com


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