The people responsible for safeguarding the retirement savings of 22 million Canadian workers lost more than $500 million investing in scandal-plagued Orpea, the largest for-profit long-term care company in Europe, as revealed in a report released today.
The scathing report by the Center for International Corporate Tax Accountability and Research, CICTAR, exposes the Canada Public Pension Investment Board’s, CPPIB, financial and ethical failure. The CPPIB was the leading shareholder in Paris-based Orpea for the decade preceding events that rocked the long-term care sector in France. The company spent 2022 on the brink of bankruptcy, following an escalating scandal sparked by allegations of systemic elder abuse, financial mismanagement and fraud.
The CPPIB held two seats on Orpea’s board and, according to the report, did nothing to stop a pattern of criminal conduct and embezzlement by top management – including corruption, fraud, money laundering, tax evasion and the mistreatment of residents – that has seen the company’s former CEO and CFO spend time in jail.
“CUPE has spoken out against private, for-profit ownership of long-term care facilities for decades now, and this scandal shows exactly why,” said CUPE National President Mark Hancock. “The suffering and tragic loss of life in Orpea nursing homes is unacceptable. Canada’s public pension plan should never have been invested in a care industry designed to maximize profits rather than provide care and support to vulnerable people.”
In response to the report, CUPE has several recommendations:
Federal and provincial governments should work to prohibit pension funds, including the CPPIB, from investing in long-term care. This should involve a reasonable transition period away from existing investments.
Private long-term care facilities should be returned to the public sector. This should involve a just transition and full protection of jobs and bargaining rights for current LTC workers.
The federal government should publicly review the CPPIB Act’s requirements regarding the board’s risk-management in the light of the Orpea scandal.
“The for-profit long-term care industry has a long track record of failing to protect the most vulnerable people in our communities. COVID-19 shone a stark light on that,” said Candace Rennick, CUPE National Secretary-Treasurer. “Private investment in care needs to come to an end, including by pension plans, and direct public investment needs to replace it.”
CUPE is strongly opposed to our members’ pension funds investing in private, for-profit ownership and control of public infrastructure – even when the pension funds may benefit. We want our pension funds to achieve decent investment returns, but not at the expense of workers and the Canadian public, or workers and residents in other countries.