Canada’s major pension funds continue to maintain significant investments in the U.S. market despite concerns over the U.S.-Canada trade war and President Donald Trump’s policies. The Canada Pension Plan (CPP), the largest pension fund in the country, recently announced a record-high asset value of $780.7 billion, with 47% of its investments in the U.S. and only 13% in Canada. These figures have remained stable since Trump’s presidency began, as per the third-quarter results released by the CPP.
The CPP’s U.S. investments have steadily increased since 2005 when Canada lifted restrictions on foreign investments in pensions. Currently, the CPP has $366 billion invested in the U.S. compared to $98 billion in Canada. A CBC analysis revealed that other major Canadian pension funds, known as the “Maple Eight,” collectively hold $1 trillion in U.S. assets. For instance, 55% of OMERS’ portfolio and 40.5% of PSP’s investments are in American assets.
Despite concerns over geopolitical risks, CPP spokesperson Michel Leduc emphasized the fund’s long-term investment strategy. Leduc noted that the CPP’s U.S. holdings are below the global average according to indices like the MSCI World Index and the Financial Times Stock Exchange 100, which have 65% U.S. content. Various experts and industry leaders, including Daniel Brosseau and Sen. Clément Gignac, have highlighted the need for Canadian pension funds to consider more domestic investments.
Recently, the managers of the Maple Eight funds met with Canada’s finance minister to explore new investment opportunities and promote domestic investments. While there have been calls for increased Canadian investments, the government has not enforced regulations to mandate domestic investments by pension funds. Keith Ambachtsheer, an advocate for global diversification in pension funds, supports the current trend of large U.S. holdings due to the market’s size and performance.
In response to the evolving economic landscape, pension funds are closely monitoring developments and seeking lucrative ventures in Canada. For example, OMERS spokesperson Don Peat emphasized the fund’s engagement with government partners to explore transformative projects. CPP’s Leduc reiterated the fund’s focus on low-risk investments with predictable returns, particularly in infrastructure and utilities, aligning with the fund’s long-term investment strategy guided by clear objectives.