Like a parent who’s just not ready for their kid to move out, the feds are doing everything they can to keep Canada’s pension funds close to home.
What happened: Canadian pension funds will no longer be limited to a 30% stake in domestic companies they invest in, part of a suite of changes set to be announced by Ottawa today that could unlock as much as $47 billion in federal funds and incentives for pensions.
- The feds are also expected to announce measures to make it easier for pension funds to invest in large infrastructure projects, including airports and AI data centers.
Why it matters: Investments in public Canadian companies currently make up just 4% of Canadian pension funds holdings, a steep decline from 28% in 2000. Luring a bigger chunk of the pension funds' $3 trillion back to Canada could give the economy a much-needed boost.
Yes, but: Encouraging pensions to back domestic companies could cloud their primary goal of making money. There’s evidence of this happening in Québec, for example, where the Caisse de dépôt et placement du Québec — one of the few funds with a mandate to invest locally — has performed relatively poorly.—LA