As a general proposition, the upper levels of the federal and provincial governments in this country are well stocked with informed, capable people – cabinet ministers, deputy ministers and heads of major boards and agencies. They don’t have to be rocket scientists – we had one of those at Rideau Hall and how did that turn out? – but for the most part, they are smart, responsible people, sensitive to the policies and priorities of their governments.
How then do we explain the dolt factor? How is that smart, responsible senior officials suddenly behave like blithering fools, acting as though they function in some parallel universe, disconnected from the reality that their governments face in the age of COVID?
The latest dolt is a person most Canadians had never heard of until a few days ago. He is Mark Machin, a 55-year-old British medical doctor, a graduate in surgery from Cambridge University, who converted himself into an investment banker, married an Australian woman who today is the managing director of Trustbridge Partners, a private equity firm. After 20 years with Goldman Sachs, Mark Machin joined the Canadian Pension Plan Investment Board, a crown corporation, and in 2016, he was named president and CEO.
Smart, Machin must have been to land the CPPIB gig. He’d have to be smart to run a board that manages $476 billion of Canada Pension Plan money, a fund that is projected to reach $1.7 trillion in 2040. Few would complain about Machin’s performance: in his five years on the job, CPPIB’s investments have produced an annualized rate of return of 9.7 per cent – not too shabby in a time of minuscule interest rates.
Smart, agreed. Sensitive, not so much. Somehow, it escaped Machin’s notice that Canada, like other countries, is engaged in a life-and-death struggle with a pandemic. Or that governments right across country have been telling people to stay home until they can get vaccinated. Or that his ultimate boss, the prime minister, has been insisting that everyone avoid all non-essential travel – and Justin Trudeau did just that last week when he met President Joe Biden in cyberspace (or whatever Zoomlike technology calls home). And could Machin have been unaware that Ontario’s finance minister, Rod Phillips, had lost his job for ignoring the no-travel injunction and taking a holiday trip to the Caribbean?
Now Machin has lost his job, too – one that paid him a tidy $5.9 million last year – for travelling with his partner to Dubai for what he described as “deeply personal” reasons. Deeper, apparently, than the personal reasons that thousands of responsible Canadians, who abide by the rules, could cite for needing to travel – to reunite with intimate partners or to support ailing family members in other countries. And while in Dubai, Machin had the good fortune to get vaccinated for COVID-19 – no inconvenient queueing at home for him.
When she learned of his whereabouts Thursday night (after the Wall Street Journal broke the story), Finance Minister Chrystia Freeland picked up the phone to have a word about social responsibility with the chair of CPPIB’s board of directors. Within hours, Mark Machin, still in Dubai, joined the ranks of the COVID unemployed, and the crown corporation had a new CEO, John Graham.
Like Rod Phillips and too many others, Machin may suffer from an incurable disease known as entitlement, which is characterized by a sense of self-importance that renders the victim incapable of adhering to rules accepted by lesser people.
In Machin’s defence (sort of), it might be noted that he did get the pension fund out of the ugly U.S. business of private for-profit prisons and immigrant detention centres, which face multiple allegations of racial discrimination and human rights abuse.
“Financially risky and morally bankrupt,” was how New York Comptroller Scott Stringer described that business as he took his city’s pension fund out of it. In 2019, the CPPIB sold its holdings in two of the biggest operators, CoreCivic and GeoGroup, and last month Biden directed his Justice Department to discontinue the use of private prisons.
Oddly, however, another huge Canadian crown corporation, the Public Sector Pension Investment Board (PSPIB or PSB for short), which invests the pension contributions of federal civil servants and members of the Canadian Forces and RCMP, is swimming obliviously in the opposite direction. It entered the private prison/detention centre business just last year when it bought a total of 600,000 shares in CoreCivic and GeoGroup.
PSP, it may be recalled, also owns 100 per cent of Revera Inc., the chain of for-profit long-term care homes that have suffered some of the worst outbreaks of COVID-19.
The Trudeau government takes the position that its pension funds make their investment decisions free from political interference. Fair enough, but what about social responsibility? If social responsibility is expected of public officials who want to travel during a pandemic, is it unreasonable to expect social responsibility in their choice of places to invest the country’s pension contributions?
Do Canadians really want to be involved in the ownership of companies that exist to squeeze money out of the incarceration of prisoners or the care and treatment of senior citizens?
Cambridge resident Geoffrey Stevens, an author and former Ottawa columnist and managing editor of the Globe and Mail, recently retired from teaching political science at the University of Guelph. His column appears Mondays. He welcomes comments at [email protected].