THE STORY OF OMERS: Vision for a Sustainable and Prosperous Future

May 9, 2024

The Empire Club of Canada Presents

THE STORY OF OMERS: Vision for a Sustainable and Prosperous Future

Chairman: Sal Rabbani, President, Board of Directors, Empire Club of Canada

Distinguished Guest Speakers
James Scongack, EVP, Operational Services & Chief Development Officer, Bruce Power
Blake Hutcheson , President and CEO, OMERS

Head Table Guests
Dany Assaf, Co-Chair, Competition & Foreign Investment Group, Torys LLP
John A. Campion, Partner, Gardiner Roberts, Past President, Empire Club of Canada
Andrew Federer, Vice Chairman, RBC Capital Markets
Kim Furlong, CEO, Canadian Venture Capital & Private Equity Association
Bob Hutcheson, Elio Luongo, CEO & Senior Partner, KPMG
Antoinette Tummillo, President, Antoinette Tummillo & Associates Inc., Past President, Empire Club of Canada
Aaron Vale, CFA, CAIA, Head of Client Solutions, Private Infrastructure, CBRE Investment Management
Julia Zhang, President & CEO, JD Development Group Corp

Introduction
It is a great honour for me to be here at the Empire Club of Canada today, which is arguably the most famous and historically relevant speaker’s podium to have ever existed in Canada. It has offered its podium to such international luminaries as Winston Churchill, Ronald Reagan, Audrey Hepburn, the Dalai Lama, Indira Gandhi, and closer to home, from Pierre Trudeau to Justin Trudeau; literally generations of our great nation's leaders, alongside with those of the world's top international diplomats, heads of state, and business and thought leaders.

It is a real honour and distinct privilege to be invited to speak to the Empire Club of Canada, which has been welcoming international diplomats, leaders in business, and in science, and in politics. When they stand at that podium, they speak not only to the entire country, but they can speak to the entire world.

Welcome Address by Sal Rabbani, President, Board of Directors, Empire Club of Canada
Good afternoon. Hello, everyone. Welcome to the Empire Club of Canada, the go-to forum for conversations that matter, for 120 years and counting.

To formally begin this afternoon, I want to acknowledge that we are gathering today on the traditional and treaty lands of the Mississaugas of the Credit, and the homelands of the Anishinaabeg, the Haudenosaunee, and the Wendat Peoples. We encourage everyone to learn more about the Traditional Territory on which you work and live. This is an essential first step to Reconciliation, and each and every one of us has a role to play.

At the Empire Club of Canada, we believe that it's only through meaningful conversations that we can move forward. We hope to inspire our esteemed community through thought leadership, and learning. Today, we are incredibly lucky to welcome OMERS President and CEO Blake Hutcheson, one of Canada's most respected business leaders, he's a recipient of the Ontario Chamber of Commerce Lifetime Achievement Award, and a member of the Order of Ontario. Welcome to the Empire Club, Blake. It's an honour to have you.

The Empire Club of Canada is a not-for-profit organization, and we'd like to recognize our sponsors, who generously support the club, and make these events possible and complementary for our online viewers to attend. Thank you to our Lead Event Sponsors, Bruce Power and Fairfax. And thank you you to our VIP Reception Sponsors, RBC Capital Markets, and Torys LLP. And thank you to our Supporting Sponsors, CBRE, and McCarthy Tétrault. Let's say thank you to our Season Sponsors, AWS Bruce, Power and Hydro One. Thank you, guys.

Canada's pension funds are some of the largest, most solid in the world. Not only are they centres of excellence for investments in performance, our pension funds have established themselves as well-known Canadian brand brands in global investments. There are a few things that make the success of a pension fund. You obviously need sound investment strategies, diversification across geographies, industries, and asset classes. But one of the most important things is long-term vision. Pension plans are in the business of investing money on behalf of their members, to create returns and long term value; they are guardians of our retirement security. This is why, for me, OMERS, and other top pension plans' business model is quintessentially related, in my opinion, to sustainability; about securing a financial future for all generations, about creating growth that meets the needs of the present, without compromising the ability of future generations to meet their own needs. OMERS is one of Canada's largest defined benefit pension plans, and ensures retirement security for more than 600,000 Ontarians, and by extension, hundreds of communities across the province. Its members are employed by municipalities, school boards, local boards, transit systems, electrical utilities, emergency services, and children's aid societies. And I know there are many members present today; welcome to the Empire Club.

Also, chances are that most of us here have someone in our family, or in our circle of friends, who is employed by one of the 1000 organizations that are members of OMERS. This is impact. And also, a lot of responsibility. Responsibility to those who already retired, or are close to retirement, but also to the younger generations, who will have decades until their retirement. A responsibility and a promise that must be kept, through ups and downs, through market, and financial volatility, and also on a backdrop of important demographic challenges, such as the aging of our population. We're fortunate to hear about OMERS' incredible growth story, and about how Blake and the team deliver on the important job that they have to create value both for today, and also, for decades to come.

As you know, this season, we're a lot more intentional about having the next generation at our events. Increasing access and reach for this generation was one of my top objectives, since joining the club. And so, to the young colleagues that we have with us today: retirement might seem like it's a very distant stage in your lives, one that you don't have to think about—but I can assure you that it's a very important milestone. And so, wisely planning for it is an act of self-care, and empowerment, for a very important journey in your life. So, please listen carefully to Blake's remarks, and use today's conversation as an opportunity to learn, start planning, and setting financial goals; I guarantee that your future self will thank you for. It. It's now my pleasure to introduce James Scongack, Executive Vice President, Operational Services, and Chief Development Officer at Bruce Power, to offer the welcoming remarks.

Opening Remarks by James Scongack, EVP, Operational Services & Chief Development Officer, Bruce Power
Well, great. Thanks. And firstly, thanks very much for, for having me today. And on behalf of the employees of Bruce Power, the 6000 men and women who are right now, at our Bruce Power site, making sure the lights are on here in Toronto, we're producing medical isotopes, we're investing in the future. On behalf of Bruce Power, you know, I want to not only thank you for the opportunity to be here, but most importantly, to OMERS—who we just celebrated 20 years of OMERS investment in Bruce Power; and what I can tell you, those people wouldn't be working today, we wouldn't be doing the things we're doing without the support of OMERS. So, let's give a round of applause to OMERS, for actually allowing Bruce Power to be here in the first place.

All of you know Blake very well, so I'm not going to repeat his, his bio—you're all his friends and colleagues and, and, and partners here in the room. But it's really three things I want to leave everybody with, I think is the most important, appropriate way to welcome Blake to the stage. The first is, you know, there are a lot of business leaders in Ontario, and in Canada, and around the world. But there are few business leaders who are not only successful in business, in their careers; the real test of a leader is what do they do with people? How do they promote people? How do they engage them? How do they mentor them? And also, how do they take care of people? And that is something that is really at the core of Blake's DNA. And many of you may know that Blake was awarded the highest honour by the Province of Ontario for a civilian, in 2023, through the Order of Ontario. That's what leadership is all about. It's obviously about good business results, it's obviously about good management; but it's also about taking care of people.

The second area is what I call being a fierce advocate for pensioners. We work our entire lives to have the promise of retirement. And when we contribute into our pension plans, we put a lot of trust in leaders that they are going to manage that money in a responsible way, so the promise of the future is there for us in the future. You'll hear from Blake today, but he's been consistent as a leader in this space, he is a fierce advocate for not only growing people's pensions, but protecting them. And we should never lose sight of that. The work that OMERS does, that they invest in Bruce Power, it's their money. And Blake is a fierce advocate for that.

And the third thing—and I think this really underscores the key the, the key leadership attribute that Blake and OMERS brings—is all of us are here representing different businesses and different organizations. But there's one thing in common in every single one of our businesses—it's the case in nuclear, it's probably the case in real estate, it's the case anywhere you go—the thing that makes great businesses is people. And as I mentioned, Blake is a people leader. And I think he would always tell you that all of us, were not in the nuclear business, we're not in the infrastructure business, we're not in the financial services business; we're in the people business.

And so, with that context, and with that introduction, those are the real three things that when I think of Blake Hutcheson I think about—and that's my alarm saying, get the heck off the stage, James, they want to hear from Blake. So, I'd like to pass it over to Blake. Please give a warm welcome.

Blake Hutcheson, President & CEO, OMERS
Actually, quite the opposite. You shouldn't get off the stage. For those of you don't know James, one of the finest executives, in my view, in the province. I'm honoured you introduced me today—he has more degrees than a thermometer, and he was also Top 40 Under 40 recently, among many things. So, keep an eye on this guy, great Ontarian, great Canadian, and we are so lucky to have him at Bruce Power.

First question: dad, can you hear me? He gave me some little device—yeah. Do I have to do this [holds mic up] the whole speech for you? No. Okay. I'll do, I'll do my best. I'll do my best so you—and can everyone else hear me? Okay. Firstly, listen, I want to thank the Empire Club for asking me to speak today, and the rest of you in this room for taking your busy schedules, and wanting to have a lunch with a guy like me. And I'm humbled, and honoured, and I'm, I'm truly blessed to be with all of you today.

Listen, in doing my homework, I was reminded just how impressive this institution is, the Empire Club, and what it has meant to our nation. Recently celebrating 120 years of stimulating debate and conversation on some of the most pressing issues of the day, economic, social, and political. And we all know, no matter what the conversation is, you cannot delink those three; they are now intertwined in all that we do. So, congratulations, Sal. Congratulations to all the forefathers who came before you. It's a pretty amazing feat having an organization, you know, stand around for 120 years. And when I've seen great businesses do that, to me, it's always leaders standing on the shoulders of great leaders, standing on the shoulders of great leaders, passing the baton, staying relevant, and amazing tribute to this organization, this institution. I also understand you've had 3500 people speaking at a podium like this since inception, and for fun we have shared a few of those faces with you, including some of my favourites, the great Sir Winston Churchill. Baroness Margaret Thatcher; I've been a huge student of Prime Minister Thatcher. My favourite line of all time's from her—and I can relate from time to time—was when she said, "You know, if I walked on water, my harshest critics would say it's because I cannot swim." I'm looking at the face of Brian Mulroney, who I think affected so many of us in this room—the late, sadly, Brian Mulroney—and then my, my favourite of the Canadian literary Margarets, Margaret Atwood, who's published over 60 novels, books, and poetry collections in her time. So, if I wasn't humbled enough by your presence, I am completely humbled by theirs. And I'm readily prepared to admit that I will be in the bottom quartile of the most impressive speakers that have presented to you today. But I will say, if I look at the 3500 who have come before me, I would submit I'm in the top few, in terms of having genuine friends in the room—and I so feel that in this room. And I just have to say that, that—is that mine, or someone else's; it's someone else's? Okay, good. I just want to say thank you for showing up for me, as you always have.

Now, I'm, my job really is, is four things. I'm going to address one question head-on, one that you've read about today in the National Post, The Globe and Mail, I think it's, I think it's due. I've been asked to give a little bit of my own personal story, a little bit of the Oxford OMERS story, and then I will flash to you where our organization is headed between now and the end of the decade. Now, the one question head on is the one you're hearing everywhere you go—and it is not my habit to script something. I've actually scripted a response for only this portion of my presentation out of respect for you, because I'm quite passionate about it, and I just want to get the right message across.

So, I'm sure you've all heard a lot of noise in the system lately, as to whether our federal and provincial government should be allowed to dictate to Canada's pension plans how much we should invest in Canada, and in what forms, and in what sectors. One of the beautiful things about our nation is that we should be able to debate anything, including this. And I can tell you on this one: some of the pro-interventionist questions and comments have at least been well-intentioned. But others have been full of naivety, misinformation, self-interested solutions, and in a few cases, all three. And without getting into the nuances of the debate today, in the interest of time, the answer to the question as the whether or not government should prescribe how we invest is, in my view, an unqualified, unconditional, and emphatic, No—and if you feel like clapping may not be [indiscernible].

Listen, in, in support of that statement, I'm just going to share with you three reflections and refutations. One, we live in the greatest country in the world—and I travel roughly 25 percent of my time, and I am reminded of that every day. And are we perfect? No. And could we be better? Of course we could. But there are no utopias. And in my view, Canada, on its worst day, remains one of the most livable and investable places on the planet. And the large Canadian pension plans, known as the Maple 8, and plus, plus, plus, I hope you know, are viewed as the very best of the best in the world, in over 200 countries. And everywhere I go, I'm asked, "Tell us about your governance model, tell us how you invest, tell us how you operate." It's just an unequivocal truth that our Canadian pension plans are thought to be the best in the planet.

And the three reasons I think that's true, are as follows: the first is, we are delinked from our governments. Our governments have made it known, and we've made it known to them, that we have the autonomy, as fiduciaries, to manage the money of the plan on a risk-adjusted basis, knowing our plan, knowing our liabilities as we do—and it's first, and it's paramount, and it's a big part of our success. The second is, we can buy platforms. You know, Oxford Properties is a good example. We bought that business in 2001 that was a seed of a business, and today, it's an 85-billion-dollar, truly global success story. And we have comp models that allow us to compete globally. So, the day that any government, with a fraction of the facts, intervenes and tells fiduciaries how to invest, is, sadly, the beginning of the end of this legally well-conceived, highly-regarded, world-leading Canadian Pension Plan system as we know it. And the last time I checked, as James said, as a fierce defender of the plan, OMERS' money is the money of our hard-working members. It's not my money, it's not your money—and it's certainly not the provincial or the federal government's money. Not to be used by them, not as a tool of the state. [Applause] Thank you.

The second point, and this is on the narrow appeal, largely by a few small financial intermediaries, that we should all be forced to buy a certain quota of Canadian equities. And that is, the short answer, again, it's kind of a ridiculous concept. The thesis ignores the fact that in addition to our substantial portfolio of Canadian equities, we are significant direct investors, who buy, manage, and hold some of the highest-quality assets and businesses in the nation. Think Bruce Power, think Yorkdale Shopping Centre. Do people honestly think we should be pressured into selling those for lesser-quality, lower-return, higher-volatility holdings for our members, to placate the narrow, misleading views of the self-interested few.

And three, the truth is, the government wants us to invest more—and by the way, we want to invest more—in this country. We know the dollar, we know the rule of law, we have relationships, we've got a home court advantage. But the answer isn't then to prescribe a solution; it's to roll up our sleeves, work with the government, and figure out how to take it from there. And I'm here to say, quite honestly, that this place, maybe two weeks ago, maybe three weeks ago, I was a little concerned that this would not end well. And the truth is, it's ended in a very good position. If you've looked at the de-escalation since the federal budget, and if you look at the federal budget closely, there's a statement supported by the Maple 8, supported by the Maple 8, that the former governor of the Bank of Canada, Stephen Poloz, has been asked to work as an intermediary between us and the governments, to see if we can unlock some win-win solutions. And frankly, I'm encouraged by that outcome; I'm going to continue to play a leading role in that space. This is a very good example of governments getting pressures, us getting pressures, coming together, having a conversation, landing in a good place.

The jury is out, but the truth is, the finance department listened to us; we listened to them. We could point fingers at the state for saying, "You know, what? You haven't given us an opportunity to play nearly enough, provincially or federally." They could look at us and say, "You're not investing enough." The truth is, none of that's true, and none of it's even productive if it is true. Let's find a solution, let's roll up our sleeves, let's see if we can find a few places to do things together. That's where it's landed. Hopefully, the press deescalates the whole thing. We'll see. That's the end of my prepared remarks. And now, I'll get free-flowing, and probably quite irreverent on other things.

A few headlines—so, you know, I can't speak to the other pension plans' book, but I can speak to ours, and I'm actually really proud of how much of Canada we do own. If you look, we today have 34 billion dollars of committed equity to businesses across this great nation; it's roughly 24, 25 percent of our portfolio. Some of these with partners, Jasper Park Lodge, Banff Springs Hotels, Château Lake Louise, The Stack, which is the first building to be built in the continent that's a net-zero office building. Yorkdale Shopping Centres are partners with CPP, Square one in Mississauga, Scarborough Town Centre, Upper Canada Mall—and if you're shopping any of those Cadillac Fairview malls, change the tune; go to our malls. Bruce Power, you know, you've got Bruce Power, 50 percent ownership for us, we're incredibly proud owners; 31 percent of the power supply, here in the province of Ontario. We own Ontario's Land Registry system, and our friends back there, thank you for being here, are doing an amazing job with that. CBI Health, 250 wellness centres across Ontario and the nation. What more, what can be more Canadian than owning a chunk of the Raptors, and the Leafs, and the Argos, and the FC, and the Marlies? That's a new investment for us. And by the way, yes, we have an awful lot of Canadian securities, the big banks, all of them—I put RBC in there for you, Andrew, because you were sponsoring the, the dinner, yeah; Andrew's clapping, Andrew's clapping—but the truth is, we have a lot of the great equities too.

So, just for fun, Canada's GDP is 2.5 percent of the global GDP, and just for fun, 25 percent of our book is in this nation. If you were a Martian, you would look at us and say, "Why are you putting 25 percent of your custodial money into a nation that has 2.5 percent of the GDP?" The reason is, again, we think we have a home court advantage, we believe we invest positively here, knowing our own fiduciary obligations, and we at OMERS are incredibly proud of the position we've taken—notwithstanding which you might read in the press about others. I have a short video that speaks to a few of these holdings much better than I can. So, let the video roll.


[VIDEO:]

Andrew O'Neil, Vice President - Development, Oxford Properties:We've put sustainability at the forefront. We've always tried to lead the market, and we're doing it with The Stack, first zero carbon building in the country.
Ted Mildon, Vice President – Office Leasing & Operations, Oxford Properties:There's six buildings delivering in downtown Vancouver right now; we're the only one who made a zero-carbon pledge. We made that in 2017, when we started planning the building. It says a lot about us as leaders that we're the only ones delivering today, in 2023, with a zero-carbon building.
Bob Aziz, Chief Operation Officer, OMERS; Chair of the Board, Bruce Power: Bruce Power is the largest operating nuclear facility in the world, supplying approximately 31 percent of the electricity for Ontario. Bruce Power is OMERS single largest investment, within our initial investment dating back to 2003. Beyond the generation of electricity, however, Bruce Power has been a global leader in the production of medical isotopes for over 35 years. The isotopes produced at Bruce Power are used to fight cancer, keep hospitals clean, fight disease, and sterilized food.
Veronica Maggisano, Vice President - Development, Oxford Properties:
Building a community that will stand the test of time was our inspiration for the Square One district. It is the largest mixed-use development in Canada's history. It is an 18,000,000-square-foot development that will deliver over 18,000 residential units, and over 10 acres of park, community, and transit infrastructure, and all of this on Oxford-owned land. This is an exciting project for all of us at Oxford and OMERS to be part of, because in life, you don't often get the opportunity to build something of this magnitude from scratch.

[END OF VIDEO]


Blake Hutcheson
You can clap for that, too—that's good, yeah. So, I've got a few slides that just tell a little bit of the personal story, which I've been asked to share today. Listen, my family came from Scotland just before Confederation. They were home builders locally in this area, and they found their way up to Huntsville, Ontario, in 1880, because there were land grants being offered about 10 acre plots; if you cleared 15 percent of the land and built a shack, you could farm. What they didn't know is that soil up there was absolutely impossible for farming, so they starved to death, I think, for about 20 years. And they did figure out you could farm timber, and you could farm rocks. And so, my grandfather figured out you could farm timber, my dad rocks, so the last 100 years or so, the family have been in that space. And my grandfather, FW Hutcheson, with a small mill, with his brothers, started manufacturing hardwood flooring. And to the best of my knowledge, over the next 40 or 50 years built, I think Canada's largest, or one of the largest hardwood flooring manufacturing companies in the country from this little town. And the lesson he taught me—he lived in perfect health till 93—was the lesson of cycles. He said, "Blake, you gotta understand cycles. This is an amazing country, and as soon as it looks too good to be true, it usually is. And as soon as it looks like there are no prospects, just keep going. Because if you believe in tomorrow, and see through cycles, you're going to do extraordinarily well.

And he kept the discipline in his mills that he would never go to two shifts. One, because he didn't want to let go the local employees, because so much of the community relied on the family, he didn't want to appreciate his assets, and he just kept putting out the same linear board-foot on his plants year in, year out, and it just started to grow and grow. And in the good times, he'd lose salespeople because he couldn't hit orders, and in the difficult times, he would pile timber to the skies, and then he was the only one in the world with product when the world turned. And in that time, there were forty countries in the world; he was exporting to about 20 of them, and travelling around the world from this little town. My father Bob has been a serial entrepreneur, he's aggregated land his whole life, he's totally taught his kids early in life that money's worth more today than it is tomorrow, which is why I'd appreciate the dollar, and real estate's worth more tomorrow than it is today. And he's built a number of businesses, sold a number of businesses. His primary business was Hutcheson Sand and Gravel, which he gained from a seed of an idea, he grew a pretty substantial business, and was selling product across Northeast United States, across Canada. And his main lesson to me was what he would call "Finitiative." He said, "Everybody on the planet has initiative, you get stuff started—the key to life is finitiative, getting stuff done." And he's been a hero to me—there he is, on his 90th birthday with the family. He, at 93, broke the World Book of Records for water skiing—not too many people could say that. Yeah. I don't know if anybody's figured it out, he, he is my hero, and actually thank you for being here, Dad. Big round of applause.

Beside Dad's shot with the water skis is my dear wife Sue—I call her "Sue 92," we met in '92; we've been together ever since. This is not a particularly good picture of Sue, but she humoured me, because for Christmas a few years ago, I gave her this T-shirt—if you can't read it, it says, "If you're dating a lacrosse player, raise your hand. And if you're not, raise your standards." And I've been a lacrosse player my whole life, so she's a good sport. My daughter is then to, to her left; that's Camille—I always put her picture in in black-and-white, because I never know what hair colour she'll have. And she's been an artist, she was in Atlantic Canada for five years; she's back home. And then my son Trevor is here. He's 25, he's got the real estate bug, he's off to Graduate School in a, in a few weeks to, to study real estate development in New York. And this is the two of us at a, a Chiefs game—that they won, actually, it was the Super Bowl. And he's probably my best friend; I'm about his 15th best friend. But that's the family. And I would just say, if I've had any success in life, I share it with everybody on the screen, because they have been a rock in all that I do.

The very brief career headlines are as follows: I went to Western—I saw a Queen's table back there, sorry, sorry about that guys—I went to London School of Economics, I went to Colombia to study real estate. Early in my career, I was in a development business backed by CIBC, and then with a group of people I bought into CBRE, which is a commercial real estate service business. And I was fortunate to have a CEO and a chair who believed in me really early in life, and so, I got to be the CEO of that business in my 30's. And I think at the time, we were about 300 people, about 30 million in sales. And over the next decade, we turned it into about 1500,1700 people, and about 300 million in sales. Today, that Canadian business alone is a, is a billion dollar business. They happen to be here, this table—I'm glad you parted with the money; you were third level sponsors, so you can do better than that —and yeah. Anyway, I had a I had a great run there, and really, today enjoy being on the Global Board, which is a 35-billion-dollar business around the world.

I retired from that in about 2007, because my best friend and I just fundamentally believed life had been too good to be true, and we raised about three billion dollars, started a fund called Mount Kellett. My friend Mark and I had gone to university together—I used to have to spot his credit card bills at university—he went off to Goldman; his last year, he made 92 million dollars at Goldman. So, he said, "When you retire from CBRE..."—and we went for a walk Central Park, and we, we, raised about three billion dollars; we set an office up in London, Mumbai, Hong Kong, and Toronto, to buy stuff cheap around the world, and had a pretty great run. But my problem was, I with my kids were young, I was commuting to New York, was commuting all over the world. And I had an offer from Mr. Nobrega (ph), who's in the room, and Mr. Latimer, to come and be the CEO of, of Oxford properties on January 10th, 2010. And I came rushing home. We—at the time, the business was 17 billion dollars; it was seven billion of equity, 7 billion of debt, 3 percent of third-party, 95 percent Canada, 50 percent office, 40 percent retail. And not soon after we put a stake in the ground, we said, "We will be 20/20/20, and by 2020, we'll be 20 billion of equity, 20 billion of debt, 20 billion of third-party"—by the way, if we have 20 billion in third-party, it will pay for the entire organization. And over the next 10 years, with some amazing partners, and amazing people, we grew a business to be a 60-billion-dollar business, 30 percent Canada, 70 percent elsewhere. All the food groups from diversification, 22.5 growth, 12.5 percent returns over those 10 years. And I had a great time.

And then, to, for my sins, I think, the Chair of the board—who's here, George Cook—and the board said, would you consider coming into OMERS? And so, I retired from Oxford, spent about a year getting educated on OMERS underneath the then CEO, and had the privilege of waking up the CEO of OMERS in the first quarter of 2020. You'll remember the markets were up 45 percent, the Canadian dollar dropped 15 cents, we had hedges all around the world, we had billions of dollars of capital costs—how do you like it so far? And we did the best we could in those, in those terms, and in those times. And I just want to say, this is by far the most important work of my life. I am so blessed to be the CEO of this amazing organization, supported by a great board supported by a great team. And we are doing everything in our power to make this platform, not just as I described early, like the other pension plans, among the best in the world, but to be the best of the best of the world. And that's our goal, and that's where we're headed.

I will share a very few number of career highlights. This is my first development project. I was 24 years old. Dad and I sat down, we got a contract with the Ministry of Government Services to build a 12,000-square-foot building. We took the lease to the bank, and TD Bank said, "We'll give it—[I think it cost us 1.2 million to build this thing, ad they said]— we'll give you 1.3 million, because you get money against value, not cost." And I thought the real estate business was the easiest thing in the world, we could finance out. And I love this project, because the size of this project, everything you do on a little project is exactly what you do on a big project. This wouldn't have been on the planet if Dad and I hadn't, you know, figured how to how to do that as a kid. And this one has stuck with me—by the way, it's the FW Hutcheson building—we, we still own it today. And it's, it's, you know, we can go around the world doing big things; this one's still near and dear to my heart.

In terms of Oxford, our strategy at Oxford to grow from Canada, because we were primarily a domestic company, was to go around the world to the best supply-and-demand markets in the world, and to do something of size early. Because once we did something of size, it would put us on the map. And then, we could scale a business with the people who reflect the plurality of that market, and also, to really get into the granularity, and you can scale businesses. So, in London the first significant transaction we did was this Leadenhall Building. It was a joint venture with a company called British Land. It cost us 500 million dollars, it's 620,000 square feet, it was designed by Sir Richard Rogers. In my opinion, it's one of the most beautiful buildings in the world today. And we expected to hold it long-term; we completed it in 2015. June of 2016 came along for Brexit, we got an unsolicited offer for £1.15 billion—and sometimes, even though you think you're keeping something, your first-born might be for sale, because we were able to generate a profit of about a-billion-and-eighty-million dollars on a single 620,000 square foot building, and that put us in business in the UK.

The next building is the Berlin Centre, and we were going to, really, Western Europe, in general. And this is the first transaction we did: it was €1.1111 billion. And people asked, "Why that?" and we said, "Because we just couldn't get to 1.122222 when we were underwriting it." And we bought this building, it put us on the map, it turned heads, it opened doors for us all over Europe. We sold a significant piece of this building last year at substantially more than our basis, so it's been a great news story.

In New York, it was Hudson Yards. We went down, it was June of 2010, and we shook hands with the Related Group of Companies to be a 50/50 partner, and their GP. And today, that is the largest real estate development project in the world, and it happens to be half-owned by a Canadian Pension Plan called OMERS. And this was a significant, deal-changing transaction for us, because today, anywhere you go in the US, our calling card means something, both OMERS and Oxford, because of this transaction. Including, it allowed us—with CPP, actually—to go build a building just south of it called St. John's Terminal. It was a two-billion-dollar spec development, which is risky, but Google showed up, asked for the whole thing; we said, "No problem, we'll build it to your spec, but you have to pay us a 500-million-dollar US profit," which they did. And that building last year—which is pretty impressive, actually—won the Development of the Year at the Cannes Real Estate Festival in Paris, which is the most prestigious there is. And that, again, is a couple of Canadian Pension Plans, leaving a mark in a global context.

I won't go on about the real estate story. I will just say this: it's, it's Oxford today was a seed of an idea; I would put it against the best real estate companies in the world today. And it's been a lot of fun working with great people, working with great projects, for a guy from Huntsville to be able to touch some of these things. And I was on the plane the other day and, and saw that Robert Oppenheimer movie. And he said something that resonated with me. He said, you know, "Algebra is like reading sheet music. Anybody can read it, but can you hear it? Can you feel the notes?" And that's the real estate business. It's not about reading a performance; it's actually feeling it, and living it. And I've had a lot of good fortune doing that, all over the world.

This is one career highlight, I'll only share this one from OMERS—no, we didn't, I didn't fire Keith today, just so you know, nor did I cost us that overtime victory; but we did, but, but just mark my words, next year we're going to win, we'll, we'll, we'll win next year. [Applause] Yeah. Now, that's worth clapping for. Yeah. Very foolhardy thing to say in front of three or four hundred people. No, what we're what we're really pleased about, the Tannenbaum family approached us—they own 25 percent; Bell and Rogers own the other 75—and said "Listen, would you be interested in taking 20 percent interest of our 25 percent interest?" We structured a deal that worked for them, and worked for us—partly because we wanted 620,000 people to take a serious interest in our local franchises, because they will be worth more because of the viewership, and the concessions, and everything else, from the province of Ontario. But more importantly—in fact, the only reason to do it—was we think it will be worth substantially more in the future. Everything we try to do is buy the highest quality assets we can find, in the markets in which we invest; this ticked all the boxes. So, we're really happy to be a partner of Bell, of Rogers, of the Tanenbaums on this, on a go-forward basis, for our pensioners.

The Oxford OMERS story—and I'll start with this. This is the first annual report we had in 1962. And the words I'll read, "OMERS removes the burden of planning, financing, and administering a plan for municipalities, thus helping them transfer and develop their employees. It allows municipal employees to look forward with confidence to a period of well-earned retirement upon completion." I love this one, because at that time, they had 4.8 million dollars—that's with an M—they had 12 employees, they had 9900 members, and I think there were 233 employers at the day. Today, we have 130 billion dollars, we have roughly 3000 employees, between OMERS and Oxford, we have a thousand employers, and we've got 620,000 members. That's a long run for a long time—and by the way, every year, we've paid people their pensions as promised, on time, and as planned.

The key highlights: it was founded, as I say, in '63. For the first 30 years, we outsourced all of our capital, and we basically paid fees, kept a skeletal staff, and peppered it across fund managers. And then it was actually Mr. [indiscernible], who's over here, who decided in the late 80's, we should start an infrastructure business called Borealis; and the seed of that idea is now a 30-billion-dollar equity business in a global context. And then a few years later, we bought Oxford Properties in 2001. And OMERS owned a few hard assets, but when they bought Oxford, it brought together the OMERS balance sheet with this incredible DNA of this entrepreneurial real estate business. And then a few years later they said, let's get into private equity; we took the CFO at the time, gave him an opportunity to build and scale a team. Today, that's about a 25-billion-dollar business peppered around the world.

And so, the story of OMERS is the story of diversity. And if you want to get wealthy—or, to be crass, get rich—put all your chips on one square, and if you want to stay wealthy and remain that way, diversify. And so, for the first 40 years or so, OMERS built these incredible muscles with private investments—we also, by the way, started to insource the capital flow, and management of our bond and equity books. So, we built up these muscles early, and then we said, "Okay, we need to diversify around the world." So, we opened an office in London, we opened an office in New York, we open an office in Sydney, we opened an office in in Singapore. We got into the, to get a proxy for the innovation economy, we put two or three billion dollars into ventures and growth, because it's irresponsible not to have an aperture into those places. So, we wake up now with a fully diversified organization geographically, really, really strong muscles in all the food groups for investing, and at this point in time, I would just say, I don't see a lot of more, a lot more diversity required; we just need to get better at everything we do. We just need to make sure we're world-class, because you cannot compete in today's competitive world, unless you are absolutely world class of what you do. So, everything the team and I are doing today is just getting better at everything we do. And I often say, Michael Jordan, greatest person to ever put on a pair of basketball sneakers—pretty big ones, I'm told. You know, when he quit, he said, "You know what? I was a great athlete; I could have played basketball, I could have played baseball. I think I'll probably go play baseball." But for the next five years, he rode around in a school bus, because he wasn't to baseball what he was to basketball. And so, what our lesson is, for our organization is we have to be absolutely great at what we do, because sometimes one degree of separation, it goes the wrong way.

Today, OMERS' story is this again, 130 billion dollars, a thousand employers, 444 municipalities, and it is a complex, really, truly global empire. Today we have, I don't know, 3000 people, but roughly 250,000 in the various ventures that we have a substantial piece of. We have 36 different unions and organizations—some, I'm pleased to say, are here today. We have, you know, 30 billion dollars in 30 big assets in infrastructure, we have 850 real estate assets, we have 25 big private equity businesses, we've got, at any given time, 30 billion dollars in, in bonds or fixed instruments like private and public credit, we have 30 billion dollars in the markets, we've got 10 offices, we've got 14 time zones, 1 out of 11 households depend on us, 14 billion dollars, roughly, we contributed to Ontario's GDP last year. The list goes on. I could go on. You don't want me to go on. But I can tell you, it's just a complicated, far-flung place, and a lot of responsibility. But what we do often is just sit down with the board and say, "It's like having a thousand children. And when you have 1000 children, some are always going to be sick, some are always going to be not making the teams, some are always going to be a little bit more problematic than the others. And then you're going to have some that are crushing it, some that are captain of everything, some that are going in every direction." And the beautiful thing about our board is they get it. Because the press want to dwell on the very minute few that are causing the problems, that's what they do for living often—not always, but often—and so, our job is really to keep the focus, love all your kids equally, give them all the time of day, not let these ones obsess the agenda, or these ones. And I would say, the OMERS family, the vast, vast majority of this OMERS family, is incredibly is in incredibly good health.

Now, how are we doing financially, is the first question. The last three years, of the 30 plans that we track, we've achieved an eight percent return over three years, which is number two in the world, against the primary plans—I was tempted to put in the Canadian ones, but I didn't, out of respect—but I did think it's worth sharing these, these three years. Why do I pick three years? Cause I've, I've actually been the CEO for three full fiscal years. I could have picked another number; like, I kind of like that one. And what I have learned in life is, it's very easy to make money one year in a row. And it's very easy to lose money one year in a row—two years is, starts to be a pattern; three years, a pattern makes; four and five years, you're really demonstrating your bona fides. And so, today, everything we do is to keep delivering in this zone—it's not every year, but on balance—in this seven, eight, nine percent range. We're showing that we can do that. And today, just for fun, about 50 percent of our portfolio is in privates. Which over time, not every year, delivers 8, 9, 10, 11 percent. Twenty percent of our portfolio today, which is very low relative to most plans, is in equities. And 30 percent, we've tilted heavily towards bonds, public and private credits, because that's 8, 9, 10 percent business today. So, if 30 percent's in an 8, 9, 10 range, 50 percent's in an 8, 9, 10 range, what's, what's not in that range is our equity book. And I have a number of our team here who are in that game, who will do incredibly well for the most part—you don't always—in that space. So, that's the volatile piece. So, sometimes when markets crush it, we won't do as well as some other plans. But on balance, we've constructed a portfolio for our known liabilities, that we think sees through cycles that can keep in this range on a go-forward basis.

The next question I get asked is: how is our funding status? We're about 97 percent funded today. It's interesting, in 1989, the, the government of the day decided to give us a, a pension plan holiday. And we were 130 percent funded. And then it took three or four years to say, "Okay, let's start funding again;" by that time, we were 82 percent funded. So, it takes a long time after a holiday like that to crawl back. And so, I like the direction of travel. And in this same period of time, we brought our discount rate down by 50 basis points, which means we're just making our liabilities that much better off, from a conservative standpoint. So, this is a story that I think is a good news, and positive outcome.

And I won't get into all the awards, and recognitions. The point is, I think every year, we make, we get 100 or so of these that are of substance, and I'll, I'll only, I'll only cite two of them. The one is we just found out last week we were one of Canada's best places to work, I think we ranked 17 of the 100 top, out of the 900 original applicants—our head of HR is here, I've said, "What happened to first?" So, we've got a way to go. But I have to say, you know, from where we were three or four years ago, we're really proud of that. And I'm really proud that Oxford Properties, for the fourth or fifth year in a row, was just named by Fast Company Magazine one of the 10 Most Innovative Companies in the World, particularly as it relates to sustainability. And Oxford has been winning hundreds of awards in that space, and I would argue is the leader, or a leader, in all respects, in that space.

So, taking stock of the day, I'll just say a few things. I think both OMERS and Oxford are truly great Canadian success stories. They have a great history; they have a great future, in my view. And when as a student of businesses in this country, in history, there are lots of once-great enterprises, whether it's Eaton's or Sears, or—I could go on, maybe I shouldn't—and there are also many great companies that have traded out of Canadian hands into foreign hands. Our big beer companies come to mind, Four Seasons is now owned by Gates and, and Prince Waleed, Fairmont is owned by a French public company. Tim Horton's is primarily owned by Brazilians—don't tell your kids that, when you take them to hockey—but the truth is, a lot of great companies have come and gone, and a lot of great companies have been traded. These companies will never be traded. Oxford and OMERS are going nowhere. They are Canadian success stories. They are here to stay. The same is true of our infrastructure business, the same is true of our platform. Now, we do sell and buy certain assets, and sell and buy certain companies, because we're living organism; that's what our businesses do. But OMERS, as you know, it, there will be somebody here 60 years from now, and 60 years again hence, because this is a great Canadian story.

To whom much is given, much is expected. It is a tremendous responsibility for all of us on our team to carry the burden of this big enterprise. Again, we stand on the shoulders of amazing people that came before us. That's our job. And the team that we've assembled, I'd put up against the best in the world. And our family always said to me, "Your job is to leave the campsite better than how you found it." And if you haven't read. Simon Sinek's book called "The Infinite Game," the punchline is this: there are finite games in infinite games. Finite games are a hockey game, the whistle blows, the whistle stops, there's a winner and loser; whether it's chess, whether it's a play, lots of finite games in our lives. A business like OMERS is an infinite game. You can never declare victory, you can never say your job's done. You can't take the credit for the things that are working today, because it's from generations before you, nor can you take all the blame. You just have to do everything you plan, for the brief period of time that you get to be the custodian of this amazing platform, to just make it better in every way you can, so you hand it on to the next generation in this infinite game.

Looking forward, just a few slides. Lots of secular themes, you know them, we like to say that the, the world is older, warmer, tenser, more closed, less well-governed—I think that covers the gamut. We're certainly focused on aging, we're certainly focused on the warming planet, and actually unlocking tremendous opportunities investment-wise, because of the warming planet. The new wave of innovation, particularly AI, which we've learned there is no one threat of AI, it affects every business differently. And what you really have to do is focus on what your problem areas are, and what issues you may have that can align to AI, as opposed to taking up the idea that you should adopt someone's tool or some cool thing, and those are our focuses today; lots of threats. The hardening of geopolitics, let's face it, all the things we grew up believing in are being challenged. We, I certainly was brought up thinking democracy is good, capitalism's good, globalization is good, innovation's good; and all of those things are under attack. We're seeing it play out all over the world, it's hitting our book in multiple ways. And what it's resulting in is a, a populist dissention in Canada, in the US, you name it, and bigger governments, who are more interventionist. Those are the things we're seeing.

And I have always thought, as a leader, there's two things you have to convey: realism and optimism. You have to be honest about is the facts. If you can't, you're Pollyanna, and you're not facing the music. And we have a sustained period of inflation, we have a high interest rate environment, there's a total disconnect today from our productivities, probably 75 percent of the US's. Our bid ask spread today and the portfolios we're trying to buy and sell is, there's a big gap. Our portfolio, we have lots of capital, we're not deploying a lot, because we're not seeing the ideal opportunities at this stage. So, there's lots of headwinds, lots of things we have to think about, depending on the business, they're deep or small, but they're real. And yet, you have to be optimistic you have to believe in tomorrow. Dad always said, "You wake up in the morning, you believe in tomorrow. And if you don't believe in tomorrow, you probably shouldn't be in business, you probably shouldn't be leading." And so, we are remaining incredibly optimistic. We will find ways to walk between the raindrops—we have for 62 years. And my focus has always been ,most of the times I look at a problem's that there's a How and a, and a What. And our businesses, when we look at them, the What is make money results, that's how we're measured. But you never make, make money unless you really, really focus on the How. And to me, that's been focusing on our people, getting the right leaders in place, getting your governance model is functioning, lucid, you know, doable, workable, creating a culture—in our case, it's to be fiercely competitive, and incredibly humble—jealously protecting your brand with every interaction, every day, and be future-focused. And in my experience, when you focus on those things, the results come.

Our strategy for 2030 is as follows—and I have some board members here today; they haven't approved it yet by the way, but I have, I like my odds—there's about 100-page document. But the punch line is, one, two, three, four, five. By 2030 we'll be 100 percent-plus funded. We're going to go from 130 billion dollars today to roughly 200 billion dollars of OMERS equity. We'll focus on three continents, roughly 12 countries—if we can't be great at something, we shouldn't be there—we will be global experts in the spaces in which we choose to invest and interact. In those regions, we'll be roughly 400 billion dollars of assets under management, which includes debt and third-party, fast approaching—I think it will be significantly more than that—fast approaching half-a-trillion dollar enterprise. So, when I talk to our 3000 people, that's a motivation. You can you can be part of something that's almost a half-a-trillion dollars between now and five years hence. And the five stands for if we can get—and I say with confidence, we will—a five percent return over the next five years, that's a real return, and nominal return of seven or eight, depending on what inflation is, we will be 110 percent funded between now and five years hence.

So, that's the story for us today, and where we're headed, I will share with you a few of life's lessons, and then I will get the heck off the stage. You know, first is, is study the cycles, listening to my grandfather. Just remember: study the cycles. If it's too good to be true, it is, and when others say you shouldn't do it, load up, get behind it, and make great things happen, with "finitiative," active as my father would say. Business travels at the speed of trust—I see my friend George [indiscernible] back there, we've been talking about that for 30 years—you can get more done in a handshake than all the documents in the world, when there's trust in the room. And if you haven't read the George Schultz op-ed piece in the Washington Post a few years ago, Reagan's former Secretary of State, it's a great read. He was 100 years old—something to aspire to, dad; dad's only 97—and that, and he, and he said, "Listen, I just want to share my last message to the world [and he said] trust is the goal of the Kingdom, it's the currency of the realm when it's in a room. Whether it's the locker room, whether it's the classroom, whether it's the boardroom, whether it's the military room, you name the room, when it's in the room, great things happen, everything's possible. When trust is not in the room, and you know it, bad things happen, nothing's possible." People are our most important asset—James, I thank you for acknowledging that up front—we can all have great assets. And I haven't lost too many night's sleep over making a multi-billion-dollar decision if our underwriting's sound, and we know where we're headed; I've lost a lot of sleep over people issues, because people matter. And so, you cannot build a business, if you don't understand that people are the foundations of those business, no matter how much the asset side of the balance sheet screams, "Look at me!" And I think it's really important that your employees know it, and it's really important to build businesses around that thesis.

Leadership is not a title. We all know people with no title who are incredible leaders—my own assistant, here, who's amazing, is an incredible leader, and yet humble; doesn't need to take credit—and we've seen world leaders with the biggest titles in the free world who are far from leaders. So, leadership is not a title; it's an opportunity to earn people's trust and respect with every interaction, every day. But in and of itself, the title means nothing. Be your authentic self—obvious, last time I checked, everyone else is taken—and I don't know, so many executives read a book and then they try to be that person. Just be yourself, because people see through those facades every time. And I think that's the only way I know how to, how to roll. And a good friend of mine—it was actually in 2020, when I needed it—reminded me that the windshield is a lot bigger than the rearview mirror for a reason. And so, yes, we need to look at history, and yes, we need to look back, but the, the horizon is where we need to focus, and the optimism, and the positivity around that horizon.

And with that, I'll just say one final thought. Listen, thank you to my team. Nothing happens in our organization without an extraordinary effort from extraordinary people. Then we get extraordinary results. I thank you again for being here, and I'll leave you with a, with a comment that that this is our time. And I'll steal from Dickens badly, but this is not the best time in the world, right? And let's accept that that's true, particularly for a lot of people that aren't necessarily in this region of the world. But nor is it the worst of times. And when you look back in history, there been some extraordinary bad times. But the one thing that we do know is, it's our time. And it's our time to try to make a difference. So, my only thought is let's, let's take the hand you're dealt, ideally put some great people around you that share your values, dream a bit, and do our level best, in each of our cases, for our different platforms, to make them better—in my case, it's our 620,000 members who motivate me every day. But also, look after your families, your communities, and our country. And then, no matter what you hear from their critics or naysayers, and their whispers or drunken yells, go out, outwork them, and better all their hopes, and all their expectations. It's a pretty good, pretty good way to silence people, I've found, in life. And I'll just say this, Dad, not everybody can have a World Book of Records, and, and we're pretty proud of you for yours, but we can all leave a significant mark, and we can all leave the campsites that we're associated with a lot better than how we found them. And I say that, Dad, by your example. Thank you very much everybody. God bless.

Note of Appreciation and Concluding Remarks by Sal Rabbani
Thank you. Thank you, Blake, and thanks again to all our sponsors for their support, and everyone joining us today in person or online. As a club of record, all Empire Club of Canada events are available to watch and listen to on demand on our website. The recording of this event will be available shortly, and everyone registered will receive an e-mail with the link.

On Tuesday, May 14th, join us and the Honourable Arif Virani, the Minister of Justice and the Attorney General of Canada, as he lays out the federal government's plan for Bill C-63, the Online Harms Act. On Thursday, May the 23rd, join us for a behind the scenes glimpse of the Paris 2024 Olympic Games with David Shoemaker, CEO of the Canadian Olympic Committee. Thank you all for your participation and support. Have a good afternoon. This meeting is now adjourned.