Explainer: Quebec’s pension fund stopped investing in oil and made $4B more in green energy. Now politicians and Canada’s pension sector need to get the memo

La Caisse — the Quebec pension fund managing the retirement savings of six million Quebecers — confirmed this month that its exit from oil has paid off financially.

Since launching its climate strategy, its energy investments returned 10 per cent annually, compared to 8 per cent from a global oil index — a gap that amounts to almost $4 billion above what investing in oil companies would have generated.

The result is significant because La Caisse is not a charity. Its legal mandate is to maximize returns for retirees. The green bet wasn’t idealism — it was a financial call, and it performed.

Why private markets matter

La Caisse doesn’t invest the way most people think of investing.

Rather than buying publicly traded shares on a stock exchange, more than half of La Caisse’s portfolio is invested in private assets — direct stakes in companies, infrastructure, and real projects that never appear on a stock market ticker. This distinction matters for renewable energy.

When political headwinds in the U.S. generate negative headlines about clean energy, stock prices of publicly listed renewable companies fall — even if the underlying projects are sound.

Private investments are priced differently, based on contracted revenues and long-term fundamentals. La Caisse recently took Innergex, a Quebec-based renewable power company, private in a $10 billion deal, arguing it was undervalued and exposed to market mood swings as a public company.

As La Caisse’s head of sustainability, Bertrand Millot, put it, the reality on the ground is different from the headlines, “and there are plenty of things that are happening in private markets.”

Pension capital reaching communities: the pros and cons

This approach to private investment has also created openings for communities that want to participate in the energy transition but lack access to capital markets, where renewable projects are typically financed.

In February 2025, La Caisse announced a partnership with the Mohawk Council of Kahnawà:ke to jointly invest in renewable energy infrastructure projects.

The partnership was designed to open the door to large-scale renewable financing for the Mohawk Nation and other Indigenous communities — and to ensure they held ownership stakes in the projects, rather than just hosting them.

“For over a century, major energy infrastructure projects have impacted the rights and lands of Indigenous peoples,” said Grand Chief Cody Diabo: 

“We believe that now is the time for our communities to participate in the energy transition by owning and benefiting from energy infrastructure on our ancestral lands.”

In July 2025, La Caisse committed US$200 million (about $275 million) to Renewa, a U.S. company that acquires or leases the land beneath wind, solar, and storage projects — a portfolio covering more than 26 gigawatts of clean energy capacity across 30 states.

Securing land for wind and solar is one of the less visible bottlenecks in the energy transition — and also one of the most contested.

In Quebec’s Mauricie region, the case of TES Canada sharply illustrates that tension. 

The company plans to build 132 wind turbines to power a green hydrogen plant — but by March 2026, the mayors of nine of the ten host municipalities had formally rejected the project, backed by four local referendums and a poll showing 68 per cent of residents opposed.

The case illustrates a tension that pension fund capital alone cannot resolve: access to land is necessary for the energy transition, but social acceptability from the communities that live on it is equally so.

The contrast with other Canadian pension funds is telling in a different dimension.

Ontario Teachers’ and PSP Investments jointly own Cubico, a renewable energy platform with wind and solar assets across Europe and the Americas. 

But in June 2025, the two funds quietly abandoned the sale after prospective buyers valued Cubico well below what the sellers were willing to accept — a concrete illustration of the public market valuation problem Millot had described: negative sentiment toward clean energy was depressing what buyers were willing to pay, even for profitable operating assets.

A complete exit from oil? Almost.

La Caisse exited thermal coal mining and oil production entirely in 2023.

Natural gas still makes up 1.4 per cent of its portfolio as of the end of 2025, a share La Caisse considers acceptable on the grounds that gas serves as a necessary bridge fuel during the energy transition. It is a position contested by climate advocates.

The rest of Canada’s pension sector

The contrast with other Canadian pension funds is stark.

The Canada Pension Plan Investment Board (CPPIB) invested at least $9.7 billion in new fossil fuel and pipeline assets between October 2024 and October 2025.

In May 2025, CPPIB formally abandoned its commitment to net zero by 2050. Its CEO captured the fund’s direction plainly that same year: “Here in Canada, we like pipelines. We like oil and gas pipelines.”

CPPIB is not alone. Ontario Teachers’ has not revisited its climate strategy in more than three years.

BCI and PSP have set no emissions targets beyond 2025 and 2026, respectively. AIMCo, Alberta’s pension manager, stopped publishing climate disclosures in 2023 and earned an F from pension watchdog Shift Action for the second consecutive year. 

La Caisse received an A- in Shift Action’s 2025 Canadian Pension Climate Report Card, leading the pack among Canada’s largest funds.

The political backdrop

The La Caisse results land in a charged political moment.

Steven Guilbeault — co-founder of Équiterre and former Greenpeace activist who served as Minister of Environment and Climate Change under Justin Trudeau from 2021 to 2025 —announced to the House of Commons that he is leaving the Liberal caucus and withdrawing from political life entirely, citing the Carney government’s retreat on climate policy.

Guilbault’s departure is a political signal. La Caisse’s results are financial.

Both point in the same direction: the fund has set a target of $400 billion in climate action investments by 2030, a commitment pursued while Ottawa was signing pipeline deals with Alberta and the national pension fund was writing billion-dollar cheques to oil and gas companies.

The gap between where some of Canada’s largest institutional investors are heading and where federal policy is pointing has rarely been this wide.