Tax strategy

Public Sector Pension Investment Board (“PSP Investments”) is a Canadian Crown corporation and a long-term global investor which manages the amounts transferred to it by the Government of Canada for the funding of benefits earned from April 1, 2000 by members of the public sector pension plans of the Federal Public Service, the Canadian Forces (Regular Force), the Royal Canadian Mounted Police and, since March 1, 2007, the Canadian Force (Reserve Force) (the “Plans”). Whilst we are tax-exempt in Canada, we are generally subject to taxation on our overseas activities.


PSP investments’ tax strategy is built on the following 3 pillars:

  1. Our four foundations supporting PSP’s overall long-term strategic plan,
  2. Our seven Responsible Tax Principles driving our approach to making tax decisions in our investment activities; and,
  3. Our internal controls and processes through which we manage our overall enterprise tax risk and approach to due diligence and management of our investments.



The four foundations of PSP Investments’ tax strategy are:

  1. To support our mandate, we aim to protect our return on investments and minimize tax risks through proactive tax management of our investments throughout the investment life cycle alongside active engagement both internally across the organization and externally with our external managers and portfolio companies.
  2. We pay the amount of tax legally due and uphold ourselves to the highest standards to comply with all associated reporting and filing obligations. We apply tax planning measures based on the economic substance of our underlying investment activities.
  1. We follow the guidelines in our Responsible Tax Principles when making any decisions with material tax implications across our organization.
  2. Through engagement with government officials, thought leaders, our portfolio managers, our portfolio investments and our peers in the investment community, we endeavour to stay informed of developments and where appropriate, we contribute to promoting sound tax governance and risk framework policies and guidelines where we exercise influence.



Our seven Responsible Tax Principles

As a Crown Corporation and pension investor for the Plans, we manage amounts transferred to us in the best interest of the contributors and beneficiaries, and to maximize returns without undue risk of loss, having regard to the funding, policies and requirements of the Plans and the ability of the Plans to meet their financial obligations. Fair and effective tax systems are conditions necessary for responsible investment and sustainable growth. Our Responsible Tax Principles guide us in the practical application of the decisions we take in managing and assessing the tax implications of our investment activities and minimizing the potential harm done by irresponsible tax behavior.


  1. Accountability and Governance

Tax is a core part of corporate governance and is overseen by PSP Investment’s Board of Directors and its Audit Committee. Our Tax Strategy is approved by the Audit Committee which acts as a sound system of risk management and internal control.


We have defined roles and responsibilities within PSP Investments to oversee and monitor compliance with our Tax Strategy and related internal risk management framework. Ultimate ownership of our Tax Strategy (along with our overall business strategy) sits with our senior leadership team and PSP Investments’ Board of Directors. PSP Investments’ Senior Management and other senior leaders are regularly briefed on relevant tax issues and tax policy developments in relation to matters important to our business.


We maintain and operate our tax affairs within a tax governance, reporting and control framework. Day to day responsibility for developing, reporting on, and overseeing adherence to PSP Investments’ Tax Strategy and associated internal controls and processes and group tax compliance rests with our Taxation Group, led by the Head of Taxation who reports to the Chief Legal and People Officer.


  1. Structuring our investments

Our policy is to only use investment structures that are aligned with expected investment and business activities, and which reflect the underlying economics of the investment. When the application of the tax rules in our situation is unclear, with support from leading tax advisers, we seek to identify the rules’ underlying intent and where applicable follow prudent market practice to apply the tax legislation in accordance with its underlying policy objectives. Where applicable and observed, our policy is not to invest in pre-existing structures with pre-determined tax characteristics where, based on our assessment, the attributes of those structures do not align, and cannot be adjusted to align with the principles underpinning our Tax Strategy.


When we have influence over the tax structure of an investment, we will avoid any entities formed in perceived tax haven jurisdictions and we will only invest directly or indirectly in that kind of entity if we do not derive any tax benefit.


  1. Relationships with Authorities

We seek, wherever possible, to develop cooperative relationships with tax authorities based on mutual respect, transparency and trust. Where appropriate and relevant to our investment activities, we engage constructively in expressing our views on the formulation of tax legislation and regulations.


  1. Supporting effective tax systems

Where appropriate and relevant, we engage constructively in national and international dialogue with governments, policy makers and the OECD to support the development of tax rules and regulations based on sound tax policy principles. In this way, we hope to contribute to the development of fair, effective and stable tax systems.


  1. Preventing the facilitation of tax evasion

We do not condone, encourage or support tax evasion, and through our internal controls and processes aim to prevent facilitating the evasion of tax.


  1. Alignment of our internal control and processes with our investee companies and partners

We request our investee companies that we either wholly own or hold a majority interest to adhere to our Tax Strategy and associated processes.


We encourage our external asset managers and minority investments (“our Partners”) to adopt their own tax policies and best tax governance practices. Where we can influence approach to tax policy with our Partners, we use that influence to ensure their tax policy and approach to managing tax risk is aligned with ours through due diligence, collaboration and active dialogue. Our policy is to carry out an extensive due diligence process to strive to ensure any prospective Partner’s approach to managing tax risk is consistent with our approach and where appropriate, encourage them to implement and maintain a sound tax policy framework. Overall, as investors, we understand the importance of open dialogue and transparency around managing tax risk and collaborate with our Partners to strive for an ever-closer alignment on the approach to tax policy between us and our Partners.


  1. Transparency

We provide annual information to the Audit Committee of the Board of Directors and to Management about our tax affairs.



Our internal controls and processes

Our internal controls and processes define PSP’s tax risks and sets out the roles, responsibilities and accountabilities for assessing the impact of and managing tax risks, together with the expected standards of conduct in relation to how tax activities are carried out throughout our organization.



This tax strategy statement is published on behalf of PSP Investments and its wholly-owned entities (collectively ‘we’ or ‘our’). Publication of this strategy is regarded as complying with Part 2 of Schedule 19, Finance Act 2016 in the United Kingdom for the year ended 31 March 2024.