We are concerned about the decline in investments made in Canada by pension funds and the impact this is having on the Canadian economy. Remember that pension funds are financed from the salaries earned by millions of Canadians.
Pension funds represent approximately 37% of institutional savings in Canada, a size comparable to that of banks. Unlike banks and insurance companies that focus on debt, pension funds have the unique ability to be patient, long-term equity investors, exactly what Canada needs to shape its future.
Canadian pension funds have reduced their stake in publicly traded Canadian companies from 28% of their total assets at the end of 2000 to less than 4% at the end of 2023.
The eight largest pension funds in Canada have invested more in China (around $88 billion) than in Canadian public and private stocks (around $81 billion). Their total investments in Canada in public and private companies, real estate, and infrastructure now total approximately 10% of their assets.
Canada’s GDP per capita has fallen from 95% of that of the United States in 1980 to 75% today. In Canada, non-residential investment per worker is less than half that in the United States. For every dollar invested in startups in Canada, the United States invests $40.
Canada enjoys enormous advantages. It is one of the most developed economies in the world and a wonderful place to invest. Over 25 years, Canadian stock markets have dominated those of the G7 countries and have always generated very competitive returns.
Pension funds should be able to invest anywhere in the world. However, the impact of investments made in Canada is not limited to retirement portfolios; they also have a considerable impact on the Canadian economy: job creation, improved income and increased contributions to pension plans. Less investment in Canadian businesses increases their cost of capital, decreases their value, and reduces their ability to grow, making Canada less attractive.
Pension funds should not fear, but rather embrace with enthusiasm the challenge of investing in Canada. The positive impact of these investments on the income and development of their members should not be ignored.
Without government sponsorship and considerable tax assistance, pension funds would not exist. The government has the right, responsibility and obligation to regulate the operation of this savings scheme.
Canada has excellent companies, true world champions. These competitive businesses deserve our support, and we need to create many more. Promoting investment in Canada should be a national priority.
Given their importance to the Canadian economy, we, the undersigned, would support an effort by Canada’s Minister of Finance and provincial finance ministers to change the rules governing pension funds to encourage them to invest in Canada. Consideration should also be given to encouraging other investors to devote more capital to domestic investments.
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Ammar Al-Joundi, Rene Amirault, George Armoyan, Louis Audet, Pascale Audette, Jim Balsillie, Ross Beaty, Laurent Beaudoin, Michael Belenkie, Stuart Belkin, Bruce Berry, Luc Bertrand, Tom Birks, Alain Bouchard, Sean Boyd, Eric Boyko, Daniel Brosseau, Peter Brown, Craig Bryksa, Andrew Casey, Tullio Cedraschi, Daniel Cloutier, Daniel Daviau, Laura Dottori-Attanasio, Kelvin Dushnisky, Jean André Élie, Darren Entwistle, Mark Feldman, John T. Ferguson, Laurent Ferreira, Nathalie Francisci, Mitch Garber, Jean Gattuso, Catherine Gignac, Frank Giustra, Steve Glanville, Shawn Haggerty, Linda Hasenfratz, Greg Hicks, Gervais Jacques, Don Kayne, Norman Keevil, Peter Kukielski, Hume Kyle, Eric La Flèche, Jean-Paul Lachance, David Laidley , François Laporte, Pierre Lassonde, Allen Lau, Dominic Lemieux, Peter Letko, Adam Lundin, John MacKenzie, Isabelle Marcoux, Robert Marien, Stéfane Marion, Eric Martel, Michael McCain, John A. McCluskey, Tim McKay, Michael Medline, Rob Mionis , Andrew Molson, Claude Mongeau, Gottfried Muench, Paul J. Murphy, Howard Pechet, Pierre-Karl Péladeau, Andrew Phillips, Brian Porter, Alex Pourbaix, Richard Prytula, Darren M. Pylot, John Rae, Réal Raymond, Richard Renaud, Mike Rose, Marc Rossiter, Henri-Paul Rousseau, Calin Rovinescu, Seymour Schulich, Kim Shannon, David Spyker, Tony Staffieri, Jim Stanford, Larry Stevenson, Sandra Stuart, Jeff Tonken, Donald Walker, Michael Wilson, Elizabeth Wirth