Despite concerns about the U.S. trade war and President Donald Trump’s threats to Canadian sovereignty, Canada’s largest pension funds maintain significant investments in the United States.
The Canada Pension Plan (CPP), the country’s largest pension fund, recently announced that its assets have reached a record high of $780.7 billion, with 47 percent allocated to U.S. investments, compared to only 13 percent in Canada.
According to third-quarter results released on Friday, the level of U.S. ownership has remained stable since Trump’s return to office a year ago.
Since 2005, when Ottawa lifted restrictions on foreign holdings in Canadian pensions and RRSPs, the CPP’s U.S. investments have been steadily increasing. Currently, the CPP has $366 billion invested in the U.S. and $98 billion in Canada.
An analysis by CBC revealed that other major Canadian pension funds, known as the “Maple Eight,” collectively hold $1 trillion in U.S. assets. For instance, OMERS has 55 percent of its portfolio in American investments, while the PSP has 40.5 percent.
Only three of the Maple Eight have more investments in Canada than in the U.S. — the Healthcare of Ontario Pension Plan, the Ontario Teachers’ Pension Plan, and the Alberta Investment Management Corp.
When questioned about the CPP’s U.S. holdings, spokesperson Michel Leduc highlighted that despite growing concerns about geopolitical risks, the CPP focuses on long-term investments and carefully monitors potential risks to avoid excessive exposure.
Leduc noted that the CPP’s 47 percent U.S. investment is actually below the average compared to leading global investment indices such as the MSCI World Index and the Financial Times Stock Exchange 100, which have a 65 percent U.S. content.
Calls for Increased Domestic Investments
Daniel Brosseau, president of Letko Brosseau Global Investment Management in Montreal, emphasized that pension funds play a crucial role in the economy beyond providing retirement support. They also impact economic activities and investments in Canada.
In 2024, Brosseau co-authored a letter signed by 90 investment leaders urging Ottawa to incentivize the Maple Eight to invest more domestically, citing the substantial capital available for investment in Canada.
Senator Clément Gignac, an economist, highlighted changing market dynamics and the potential for Canadian pension funds to reconsider their U.S. holdings amid uncertainties and new investment opportunities in Canada.
Engaging in Investment Discussions
Recently, managers of the Maple Eight funds met with Canada’s finance minister in Toronto to explore new investment opportunities and promote domestic investments using the $2.6 trillion in assets they collectively manage.
Finance Minister François-Philippe Champagne mentioned ongoing discussions with pension fund managers to identify potential projects that could lead to increased investments in Canada.
While the government has not imposed regulations mandating domestic investments, there is a collaborative effort to encourage pension funds to consider more Canadian investments.
Keith Ambachtsheer, from the International Center for Pension Management at the University of Toronto, expressed support for the removal of foreign investment restrictions on pension funds, highlighting the benefits of global diversification and the positive performance of pension fund investments over the years.
Despite the significant U.S. holdings, CPP reported strong annualized returns of 8.4 percent over the past decade, demonstrating resilience amid geopolitical uncertainties.
Emphasizing Long-term Investments
While some of the Maple Eight pension funds did not respond to requests for comments, others emphasized their focus on monitoring U.S. developments and exploring new ventures in Canada, aligning with recent government initiatives for major nation-building projects.
Don Peat, spokesperson for OMERS, highlighted the fund’s engagement with government entities and partners to evaluate potential opportunities for transformative projects in Canada.
CPP’s Michel Leduc reiterated the fund’s commitment to low-risk investments that offer predictable returns, emphasizing a strategic approach guided by long-term objectives and clear investment criteria.