Trudeau Liberals want to invest more pension dollars in Canada, not abroad: report

The Canada Pension Plan (CPP) currently has $576 billion in assets, but only 14% of those assets are invested in Canada ($83 billion). Whereas investments in China accounts for roughly 10% of those assets.

Trudeau Liberals want to invest more pension dollars in Canada, not abroad: report
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The Trudeau Liberals want to invest more pension funds in Canada but remain unsure how best to repatriate those investments abroad.

During the 2023 fiscal update, the feds made it clear that their aim is to invest locally, although it has not made any moves to facilitate that transition yet. 

“Canada is one of the safest and most attractive investment destinations in the world — whether it is for the clean economy and major infrastructure projects, or new housing, or supporting our innovative companies,” reads the fall economic statement. 

The Canada Pension Plan (CPP) Investment Board currently has $576 billion in assets, but only 14% of those funds are invested in Canada. 

In May, Blacklock’s Reporter uncovered the Board invested $539 billion globally, with China accounting for 10% of those investments.

Records submitted to the committee show the Board owns $4 million in shares in Longi Green Energy Technology Company Limited, a solar panel manufacturer accused of using Uyghur Muslim slave labour.

“Longi is a customer of many of the polysilicon companies engaged in labour transfers in the Uyghur region,” said the report In Broad Daylight: Uyghur Forced Labour And Global Solar Supply Chains.

Other investments by the Board into Chinese firms include $259 million in China Gas Holdings Ltd., a natural gas distributor, $75 million in the state-run China Construction Bank and $37 million in the Bank of China. 

They laud those as “good investments” despite ongoing allegations of foreign interference, an intimidation campaign against members of Parliament, and human rights atrocities against Uyghur Muslims.

Michel Leduc, the plan’s global head of communications, testified to a Commons special committee on Canada-China relations earlier that “human rights are increasingly an investment consideration.” 

“We are exceedingly cautious,” said Leduc.

“We strongly believe any business, asset, or company that does not take human rights seriously will just not be around, so it is a destruction in value,” he told MPs. “If that fails, we will exit or avoid investing in the first place.”

To facilitate the move, the federal government may permit pensioners from owning over 30% of any given Canadian firms — an exemption that would exclude all foreign enterprises.

According to the fiscal update, the feds believe continued domestic investments by the Investment Board could “boost Canada’s economy” and “create good careers for people across the country.”

Overall, Canadian investments abroad have grown significantly since 2015 relative to foreign investment in Canada, reported the National Post.

With roughly $100 billion more being invested abroad by Canadians than by foreign investors here, that difference has grown to $726 billion between 2015 and 2022, according to Statistics Canada data

Despite the growing disparity, Leduc contends their current plans in domestic enterprise remain significant.

“Canada is, and will continue to be, a core market for us. While Canada represents less than three per cent of the world’s equity market capitalization, 14% of the CPP Fund invested in the Canadian market, representing $83 billion,” he penned in a written statement to Postmedia.

In addition, he warned of “increasing geopolitical risks” should Canada seek to pull out from foreign investments for political reasons.

“Increasing geopolitical risks over the last half decade have heightened the relative position of stable investment markets such as Canada, even as we continue to think and invest over multiple decades,” reads the statement.

According to Leduc, investments into Chinese companies paid attractive dividends and bolstered Canadian access to the “world’s largest and fastest-growing economies.” 

Mahmood Nanji, a fellow at the Ivey School of Business, concurred with the sentiment, claiming it “sends [the] wrong signal to international investors.”

Nanji told the National Post that he doubts the federal government would repatriate foreign investments into local industry.

“I don’t think [Finance Minister] Chrystia Freeland or anybody in the federal government would ever suggest mandating any of this stuff,” he said. “I think it’s more of a sort of gentle nudge.”

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  • By Tamara Ugolini

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