Corporate Canada makes valuable contributions to our economy
By Letter to the Editor on March 26, 2018.
A school of thought prevails that corporate profit is somehow suspicious. It is argued that corporate entities are only driven by profit. The impression is left that the well-being of its employees is minimized, that its product or service is of the lowest quality and that the environment is completely ignored. Unquestionably the economy will have operations which could very well improve in many aspects, but it is narrow-minded and unfair to stereotype the whole sector. A fairer comment is that the vast majority of businesses operate within the regulations of their industry, operate to have continuity and manage to have profit. After the taxes are paid, profits will enable expansion, will better compensate its workers and will provide a fair return to its shareholders in dividends. An important sector of our economy — pension funds, invests in this corporate sector in order to earn higher investment income. The Canada Pension Plan Fund with a value of $316.7 billion invests 55.4 per cent in private and public equities. The Public Service Pension Plan with $135.6 billion of net assets invests 52.4 per cent in equities. The Ontario Teachers’ Pension Plan Fund of 172.1 billion invests 40 per cent in equities. In Alberta, the Local Authorities Plan [the public service] has assets of $37.7 billion with 45.5 per cent in private and public equities. The Alberta Teachers’ Retirement Fund with $14.8 billion invests 47.5 per cent in equities. Another group which generally gets minimal attention from our politicians, especially at a time of much talk of improving the well-being of middle class Canadians, is the 70-per-cent group of workers without a private pension plan. Their plan is to invest personally in a RRSP and hopefully to grow a reasonable fund for retirement. Research by the New York Stock Exchange reported that investment in equities resulted in the highest growth over time. This group of Canadians also wants healthy profits in corporations, both in Canada and abroad. The dilemma is that only around 30 per cent of this group have a RRSP and then about 10 per cent maximize their annual contribution. Shouldn’t it be known at this time of information overload that Corporate Canada is an important sector of our economy and that it makes a valuable contribution to the well-being of many Canadians? This sector should neither take costly shortcuts, nor compromise our regulators in their enforcement of the laws, rules and regulations. Larry Samcoe Medicine Hat 8-7
