Quebecers were treated to an amazing performance Monday. By choosing to defend his handling of Quebec's giant pension fund before the Montreal Board of Trade, Henri-Paul Rousseau made his audience pay $100 a plate to hear him deny responsibility for losses of $39.8 billion.
But if the speech by Rousseau, the former president of the Caisse de dépôt et placement, was intended to make up for legislative hearings into the massive losses in Quebecers' collective retirement nest egg, it failed spectacularly. Rather than explain what went wrong Rousseau instead made a shameless effort to rehabilitate his own reputation - presumably as a prelude to scaling new career heights.
Rousseau insisted that the Caisse remains "one of the best investors in the country," despite having held, under him, 30 per cent of Canada's asset-backed commercial paper - a type of investment that in its worst form was the financial equivalent to toxic waste. The market for such paper seized up in August 2007 when investors began worrying that their "assets" included some extremely high-risk loans.
To his meagre credit, Rousseau, who headed the Caisse between 2002 and May 2008, accepted "full responsibility" for the asset-backed paper mess. But he argued that thanks to him the $120-billion pension fund is worth $15 billion more today than it would have been if it had simply replicated its returns of the 1990s. And he insisted that he was long gone when the global economy began tanking last fall and the Caisse ran up its $39.8-billion loss.
That's not nearly enough of an explanation to offer to Quebecers who either are or will be dependent on the Caisse in their retirement years.
We need a special inquiry into what has been going on at the Caisse. Rousseau has done nothing but offer his version of events, his interpretation of what was possible given market conditions.
His idea of acceptable risk might - and in fact likely would - strike Quebecers as wildly out of sync with their long-term objectives of financial stability and solvency. We need to have a discussion about what our goals are and how much risk we're prepared to accept to achieve them.
What we don't need is a politically charged confrontation led by the Parti Québécois. There is no evidence of political interference in the running of the Caisse.
An inquiry should focus on investment criteria. Do they need to be changed? Clarified?
We've just lost a bundle. We need to learn from our mistakes, no matter who made them.