Despite concerns regarding the U.S. trade war and President Donald Trump’s statements on Canadian sovereignty, Canada’s largest pension funds maintain significant investments in the United States.
The Canada Pension Plan (CPP), the leading pension fund in the nation, reported its assets reaching a new high of $780.7 billion, with 47 percent allocated to U.S. investments, in contrast to only 13 percent in Canada.
According to the latest third-quarter results disclosed on Friday, the proportion of U.S. holdings by CPP has remained stable since Trump’s return to office a year ago.
Since 2005, when constraints on foreign investments in Canadian pensions and RRSPs were lifted by Ottawa, the CPP’s U.S. assets have shown consistent growth.
Presently, the CPP has $366 billion invested in the U.S., while its Canadian holdings amount to $98 billion.
An examination by CBC revealed that the CPP is not the sole member of the “Maple Eight,” the major pension funds in Canada, collectively possessing $1 trillion in U.S. assets.
For instance, OMERS (Ontario Municipal Employees Retirement System) has 55 percent of its portfolio in American investments, and the PSP (Public Sector Pension) holds 40.5 percent in the U.S.
Only three of the Maple Eight have higher Canadian assets than American holdings — 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. investments, spokesperson Michel Leduc highlighted that investors are increasingly wary of geopolitical risks but stressed the CPP’s long-term investment approach.
“We remain steadfast in our long-term investment strategy, not swayed by short-term events or economic fluctuations, while vigilantly monitoring risks to ensure prudence,” Leduc remarked.
Leduc indicated that compared to prominent benchmarks of global investment diversification like the MSCI World Index and the Financial Times Stock Exchange 100, the CPP’s U.S. exposure is below the average, given that these indices have 65 percent U.S. content.
“While some may question the extent of our U.S. investments and advocate for more Canadian holdings, our 47 percent allocation is actually below the norm,” Leduc explained.
Advocacy for Local Investments
Daniel Brosseau, president of Letko Brosseau Global Investment Management in Montreal, emphasized that pension funds play a crucial role beyond retirement support, influencing the economy through various investments.
“Pension funds contribute to economic activities, impacting wages and wealth creation in Canada by investing in plants, equipment, and projects,” Brosseau stated.
Investment manager Daniel Brosseau emphasizes the broader impact of pension funds on the economy beyond retirement benefits.
In 2024, Brosseau co-authored a letter signed by 90 investment leaders urging Ottawa to introduce incentives for the Maple Eight to increase their domestic investments.
“Canada has significant capital available, with around $3 trillion that could be directed towards local investments,” Brosseau mentioned.</p