Media Releases

SGF: no mistake made, its returns are poor

Montréal, October 13, 2010 – Following the release last week of a study prepared by Claude Garcia and published by the Montreal Economic Institute (MEI), Pierre Shedleur, the CEO of the Société générale de financement (SGF), declared that Mr. Garcia’s analysis was mistaken in evaluating the SGF’s historical returns at -1.0%. The real number, he claims, should be 0.3% if dividends paid are included.

Mr. Garcia stands by his assertion: “It is false to pretend that we did not include dividends paid when we determined that the average annual return on the capital invested by the SGF since 1962 amounts to -1.0%. As was explained in the study in footnote 6, we took into account the fact that the SGF had benefited from government aid that reduced the realization costs of certain contracts. Those instances of aid were treated as capital injections. It is only by ignoring this consideration that one can pretend, as Mr. Shedleur does, that the SGF’s average annual return was 0.3%—a rate of return that, moreover, would not be deserving of applause.”

“Finally, we demonstrated that when the SGF intervened in large Quebec businesses, it was only after they had already reached an advanced stage of development. Why would Quebec need a government corporation that buys shares in private businesses to ensure the province’s economic development? No American state and no other Canadian province has found it necessary to do so.”

The Economic Note prepared by Claude Garcia, associate researcher with the Montreal Economic Institute (MEI) and former president of Canadian operations at Standard Life, entitled What should be the mandate of the merged Société générale de financement?, can be consulted free of charge on our website.


The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and conferences, the MEI stimulates debate on public policies in Quebec and Canada by proposing wealth-creating reforms founded on market mechanisms.

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Information and interview requests: Ariane Gauthier, communications coordinator, Montreal Economic Institute, Tel.: 514 273-0969 ext. 2231 / Cell: 514 603-8746 / Email: agauthier(@iedm.org)

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