November 12, 2002

The total assets available to the Canada Pension Plan had a net loss of $1.5 billion in the six months ended September 30, 2002 and produced an estimated negative 2.2% rate of return.

Total assets were $55.3 billion, an increase of $1.7 billion since the last fiscal year end on March 31, 2002.

On September 30, 2002 (the midpoint of the current fiscal year) the assets consisted of $38.4 billion in fixed-income securities held by the Canada Pension Plan and administered by the Department of Finance in Ottawa, and $16.9 billion in equities managed by the CPP Investment Board in Toronto.

The fixed-income securities consisted of $32.4 billion in federal and provincial government bonds and $6.0 billion in an interest-earning cash reserve. These assets generated investment income of $2.5 billion during the six-month period for an estimated 6.7% return. In the second quarter (July – September) fixed-income assets earned $1.4 billion for an estimated 3.4% return.

The equity portfolio was approximately 31% of total CPP assets and consisted of 93% public equities and 7% private equities, real estate and cash. This portfolio lost $4.0 billion during the first six months of the current fiscal year, for a negative 20.5% return, compared with a negative 20.7% for the total portfolio benchmark that measures market performance.

In the second quarter (July – September) equities lost $2.5 billion for a negative 13.0% return, compared with a negative 12.9% return for the total portfolio benchmark. Canadian investments lost 13.1% versus 12.6% for the benchmark, while foreign investments had a negative 12.8% compared with minus 13.6% for the benchmark.

“The consolidated CPP assets are in very good shape considering we have just come through one of the worst periods for equity markets in the last 100 years,” commented CPP Investment Board President and Chief Executive Officer, John A. MacNaughton. “However, we have to remember that markets are highly volatile. Canadian and foreign markets have bounced back 2.6 percent in October alone. We expect these wide swings in performance to continue as we methodically build a broadly based equity portfolio that will produce superior returns over the long term and bring balance to CPP assets.”

Mr. MacNaughton stressed that down markets are a buying opportunity for cash-rich investors with a very long investment horizon. “We have 20 years before we are expected to provide income to the Canada Pension Plan to help pay pensions, so we are in a highly advantageous position as an equity buyer.”

In view of the long investment horizon, Mr. MacNaughton added that the CPP Investment Board does not try to time markets, and invests funds as soon as they are received from the Canada Pension Plan. It is also diversifying into private equities, real estate and infrastructure to offset the volatility of, and earn higher long-term returns than, public markets.

The CPP Investment Board has previously commented that it expects equities to outperform bonds over the long term.

The CPP Investment Board is a crown corporation created by an Act of Parliament in December 1997. It invests in capital markets funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are currently invested in equities to balance the cash and bonds owned by the Canada Pension Plan. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. Its fiscal year is from April 1 to March 31.        

For further information contact:

John A. MacNaughton

President and Chief Executive Officer

(416) 868-4077

November 12, 2002

The total assets available to the Canada Pension Plan had a net loss of $1.5 billion in the six months ended September 30, 2002 and produced an estimated negative 2.2% rate of return.

Total assets were $55.3 billion, an increase of $1.7 billion since the last fiscal year end on March 31, 2002.

On September 30, 2002 (the midpoint of the current fiscal year) the assets consisted of $38.4 billion in fixed-income securities held by the Canada Pension Plan and administered by the Department of Finance in Ottawa, and $16.9 billion in equities managed by the CPP Investment Board in Toronto.

The fixed-income securities consisted of $32.4 billion in federal and provincial government bonds and $6.0 billion in an interest-earning cash reserve. These assets generated investment income of $2.5 billion during the six-month period for an estimated 6.7% return. In the second quarter (July - September) fixed-income assets earned $1.4 billion for an estimated 3.4% return.

The equity portfolio was approximately 31% of total CPP assets and consisted of 93% public equities and 7% private equities, real estate and cash. This portfolio lost $4.0 billion during the first six months of the current fiscal year, for a negative 20.5% return, compared with a negative 20.7% for the total portfolio benchmark that measures market performance.

In the second quarter (July - September) equities lost $2.5 billion for a negative 13.0% return, compared with a negative 12.9% return for the total portfolio benchmark. Canadian investments lost 13.1% versus 12.6% for the benchmark, while foreign investments had a negative 12.8% compared with minus 13.6% for the benchmark.

"The consolidated CPP assets are in very good shape considering we have just come through one of the worst periods for equity markets in the last 100 years," commented CPP Investment Board President and Chief Executive Officer, John A. MacNaughton. "However, we have to remember that markets are highly volatile. Canadian and foreign markets have bounced back 2.6 percent in October alone. We expect these wide swings in performance to continue as we methodically build a broadly based equity portfolio that will produce superior returns over the long term and bring balance to CPP assets."

Mr. MacNaughton stressed that down markets are a buying opportunity for cash-rich investors with a very long investment horizon. "We have 20 years before we are expected to provide income to the Canada Pension Plan to help pay pensions, so we are in a highly advantageous position as an equity buyer."

In view of the long investment horizon, Mr. MacNaughton added that the CPP Investment Board does not try to time markets, and invests funds as soon as they are received from the Canada Pension Plan. It is also diversifying into private equities, real estate and infrastructure to offset the volatility of, and earn higher long-term returns than, public markets.

The CPP Investment Board has previously commented that it expects equities to outperform bonds over the long term.

The CPP Investment Board is a crown corporation created by an Act of Parliament in December 1997. It invests in capital markets funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are currently invested in equities to balance the cash and bonds owned by the Canada Pension Plan. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. Its fiscal year is from April 1 to March 31.        

For further information contact:

John A. MacNaughton

President and Chief Executive Officer

(416) 868-4077