Ottawa removes funding cap for Canadian pension funds

Article content material

Canadian pension funds will not be restricted to a cap of 30 per cent management of corporations they put money into and the federal authorities is working with the institutional investor and home airports to “discover measures for additional pension fund funding on airport lands.”

Article content material

Article content material

Deputy prime minister Chrystia Freeland made the bulletins — a part of sweeping measures that might complete $47 billion in authorities cash and incentives to encourage extra pension funding in Canada — at a information convention Friday in Toronto. She stated extra particulars could be supplied in Monday’s fall financial assertion.

Article content material

“We are making it simpler for pension funds to accumulate controlling stakes in Canadian entities,” Freeland stated. “Currently Canadian pension funds are restricted from proudly owning greater than 30 per cent of a Canadian entity. We’re going to vary that.”

She stated the sequence of adjustments and new measures that may have an effect on the nation’s largest pensions have been made following a report from former Bank of Canada governor Stephen Poloz, who she tasked within the spring with discovering methods to encourage extra home investments by the Canadian funds, which collectively management $3 trillion.

“Canadian pension funds have… among the world’s finest funding experience. They are envied world wide,” Freeland stated on the information convention on the Toronto Stock Exchange.

The marketing campaign to get extra pension cash invested domestically started in 2023 after fierce lobbying in Ottawa, however drew pushback from massive pension funds whose executives argued that their diversification geographically and by asset class is what resulted of their enviable returns.

Pension officers additionally argued that Canada had not freed up massive infrastructure property, corresponding to airports and ports, that are a sort of funding favoured by massive institutional buyers world wide together with Canadian pensions.

Article content material

Article content material

But Freeland stored pushing ahead, and final spring’s appointment of Poloz to guide a process drive to discover the problems appeared to ease friction with the pension funds.

“We are combating for capital. We must personal the rostrum and say Canada is a superb place to speculate… and we’re decided to get our share,” Freeland stated on the information convention the place she introduced different measures together with tax credit and incentives, plus $2 billion in extra authorities cash to encourage public-private funding to spur progress of Canadian startups and mid-sized corporations.

Another leg of the plan is to create a program that may present as much as $45 billion in loans and fairness and contain “working with pension funds growing AI information centres,” Freeland stated.

A senior pension supply stated Friday that there gave the impression to be no draw back within the pre-announced measures, however declined to remark publicly earlier than seeing the complete element within the authorities’s fall financial assertion on Monday.

Freeland stated Poloz had provide you with “good, artistic concepts” to generate extra alternatives for pensions funds to spice up their investments in Canada and make that simpler for them to do. But she additionally framed the measures introduced Friday, partly, as a response to the re-election of Donald Trump as president of the United States.

Article content material

“We must be candid in regards to the actuality of the incoming U.S. administration,” she stated. “This is an administration which brazenly has a method of making financial uncertainty exterior the U.S. — as a method to discourage funding anyplace aside from the United States.”

She stated she can have extra to say about her authorities’s response throughout Monday’s financial replace.

“Canada goes to battle for Canada,” Freeland stated. “Our authorities is combating for Canadian jobs, our authorities is combating for capital.”

• Email: bshecter@nationalpost.com

Bookmark our web site and assist our journalism: Don’t miss the enterprise information it’s worthwhile to know — add financialpost.com to your bookmarks and join our newsletters right here.

Article content material