The legacy of Henri-Paul Rousseau

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National Post, Thursday, June 5, 2008

The Montreal business establishment was out in force for a speech by Alan Greenspan last Friday when BlackBerries began blinking and the cavernous Palais des congres started buzzing. Henri-Paul Rousseau was quitting as president and CEO of the Caisse de depot et placement du Quebec.

The Caisse is Canada's biggest pension plan, and during Rousseau's six years at the helm it doubled in value to $155-billion (the Ontario Teachers' Pension Plan, at $108 billion, is the only other one that even comes close). But more significantly, the Caisse is the linchpin of Quebec Inc, created by Premier Jean Lesage in the mid-1960s as an option out of the Canada Pension Plan. For Lester B. Pearson, it was the high-watermark of the era of co-operative federalism. For Lesage, it meant Quebec could fulfill his campaign slogan -- maitres chez nous (masters of our own house) --in terms of controlling the levers of its economic destiny.

Occasionally, the Caisse's top executives have been swept away by delusions of grandeur. Rousseau's predecessor, Jean-Claude Scraire, was a case in point: During his go-go reign as president, the Caisse paid way too much to finance communications giant Quebecor's acquisition of Videotron, the local cable TV monopoly. Scraire also spent $300-million to build the Caisse's new glass headquarters, which came in 400% over-budget, and bought an interest in a Hollywood movie studio.

Rousseau was brought in to rescue the Caisse, and has done well. He has grown its assets from $77-billion to the in the aforementioned $155-billion mark. In 2007, the Caisse outperformed 90% of the pension plans in the country, despite holding $13.4-billion in commercial paper. (The asset-based commercial paper collapse is the only serious negative entry on the Caisse's books. Even on this file, Rousseau played a key role in orchestrating a rescue strategy.)

As a public servant, the CEO of the Caisse makes about $500,000, plus performance bonuses -- more than anyone else on the provincial payroll, but far less than top executivesfinancial-services sector. The job isn't about the pay, it's about influence at that unusual Quebec juncture where public policy and the private sector meet.

At 60 years old, and facing the prospect of another five-year term, Rousseau decided that with the books in solid shape this was his best time for an exit to the private sector. He will become deputy chairman of Power Corporation and Power Financial, the two holding companies of the Desmarais family's far-flung financial empire.

It's a great get for the Desmarais operation and its shareholders, but leaves a significant vacancy to be filled by Premier Jean Charest. Among the Caisse's CEOs, Rousseau was uniquely influential and successful. This was evident by the company he kept.

For example, at Brian and Mila Mulroney's Christmas cocktail last year, Rousseau rubbed elbows with the likes of Paul Desmarais Jr., Quebecor CEO Pierre-Karl Peladeau, BCE president Michael Sabia, National Bank president Louis Vachon, Charest, and Montreal Mayor Gerald Tremblay.

It was like a board meeting of Quebec Inc., and it was clear that under Rousseau's guidance the Caisse was a major force in its affairs.

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