Quebec's finance minister testified Friday that the Liberal government never encouraged the province's pension fund manager to take more risks in hopes of cashing in on higher returns from investments.

Quebec Finance Minister Monique Jrme-Forget testifies Friday at the standing committe on finance at the national assembly. (CBC) Monique Jérôme-Forget appeared before the national assembly's standing committee on finance at the start of hearings looking into risk-taking and financial losses at the Caisse de dépôt et placement du Québec.

During more than two hours of grilling by Opposition finance critics, the minister refused to concede that her government had in any way encouraged Caisse managers to make the high-risk investments that contributed to the $39.8-billion drop in assets last year. The fund's assets now sit at $120.1 billion.

Parti Québécois finance critic François Legault accused the Charest government of changing the mandate of the Caisse in 2004 in order to make returns a top priority.

Jérôme-Forget shot back, saying the mandate of the Caisse is to seek "optimal" results, a term she said even PQ politicians had used in reference to the fund's objectives when that party was in government.

She told Legault to direct his questions about risk-taking to the managers who were in charge of the fund when they appear before the committee.

Legault said her refusal to acknowledge that a finance minister has any influence over decisions at the Caisse was astounding.

"I find that to be a flagrant lack of leadership, especially given what has happened at the Caisse de dépôt," said Legault.

Minister denies knowing of historic losses during campaign

Jérôme-Forget had long refused to testify at hearings into the historic losses at the pension fund manager, saying that her appearance would only politicize the process.

However, after Opposition parties continued to put on the pressure, the minister announced Thursday that she would answer questions under oath.

François Bonnardel, the ADQ finance critic, wanted to know how much the minister knew about the tumbling numbers at the Caisse while she was running for re-election in late fall.

She replied that she was aware that the Caisse likely was going to end the year with some loss of assets.

Jérôme-Forget tabled a letter she received from the Caisse in mid-October showing a projected loss of 8.7 per cent.

She also referred to a letter from late November warning the losses were worsening, but not to the degree of the 25 per cent loss the Caisse had posted by the end of the year.

Jérôme-Forget wrapped up her testimony shortly before noon. The committee will hear next from past and present managers of the Caisse, including Henri-Paul Rousseau who resigned as president of the fund last May.