Canada is calling on its C$3tn (US$2.1tn) pension system to boost domestic investment as it seeks C$500bn in new finance to reboot the economy and lower its dependence on the US.

Industry minister Mélanie Joly told the Financial Times the new wave of “economic nationalism” means Canada’s financial institutions must foster homegrown investments and major infrastructure projects to kick-start the country’s sluggish economy.

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This month Joly launched an industrial strategy aimed at creating jobs and attracting foreign investment in response to US President Donald Trump’s tariffs on Canada.

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Like the UK, Canada has been examining how to channel more pension assets to domestic targets to combat weak productivity and poor business investment.

Last year more than 90 Canadian corporate executives signed an open letter calling on the government to amend rules which would allow them to increase domestic investments, saying the amount they allocated to Canadian equities had dwindled from 28 per cent in 2000 to 4 per cent by 2023.

Ottawa in December lifted its 30 per cent cap for investments in Canadian entities at a time when Trump was threatening tariffs and trade wars against its major trading partner.

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[–] HumanOnEarth@lemmy.ca 6 points 1 month ago

Invest in Canada Divest from the US Invest in the EU Divest from China, Russia, etc

[–] wampus@lemmy.ca 4 points 1 month ago

Canada’s financial institutions must foster homegrown investments and major infrastructure projects to kick-start the country’s sluggish economy.

HAH. The federal regulators are busy pushing for payment changes specifically to allow foreign businesses greater access to Canadians wallets. They've been working to kill small Financial Industry players, namely the provincially regulated Credit Unions, for literally decades -- largely stemming from Carney himself, during his time at the Bank of Canada. When they talk about opening up competition in that space, it's code for letting US tech giants/foreign companies have direct access to Canada's financial systems / Canadian's wallets -- not about some home grown industry.

If they were serious about trying to fund small businesses more, they'd set up a program to invest a sum of money at many of the smaller Credit Unions around the country -- that'd be direct investment in small businesses already. They could set up large deposit vehicles at those Credit Unions with a fixed, below normal interest rate (so they earn less on the deposit), on condition that the capital be used to fund small business loans for the local community at a preferential rate. Let the Credit Unions do all the heavy lifting in terms of vetting the loans. Using geographically contained credit unions also allows govt to target specific regions differently, simplifying a process for responding to a (de)evolving trade environment. If one community is harder hit by trade uncertainty / tariff shenanigans, they could provide additional funding to that regions local CUs to help mitigate it / pump funding into that region. Things like this have been done historically, from what I understand.

It's unlikely they'd go that way though, because they don't really want small Canadian businesses in the Financial Markets, they want to eliminate the provincial credit unions. Also, it gives up too much direct authority -- and the government is trending authoritarian, whether its left-wing, right-wing or centrist doesn't really matter on that front.

[–] pedz@lemmy.ca 3 points 1 month ago* (last edited 1 month ago) (1 children)

As long as it's not like the PPP with the CDPQ and the REM.

The REM itself is fine but the no competition clause from public transit entities is unacceptable. The REM makes it illegal for public transit to compete with it. Everything must feed into the REM to maximize the return on the investment. And the return is coming from public money.

If a suburb doesn't have adequate transit but is not projected to be a good return on the investment, no transit for the citizens. It now has to be profitable and it's going to slowly make Montréal/the ARTM dependent on an investment fund to get more transit.

What a shitty way to invest in your own community.

[–] kent_eh@lemmy.ca 4 points 1 month ago (1 children)

After spending far too long looking up all the acronyms you used, I'm pretty sure I agree with your point.

(Yes, they may be commonly understood in Quebec, but not so much for the rest of us)

[–] pedz@lemmy.ca 4 points 1 month ago

In short, Montreal gets a new metro (the REM), financed by a pension fund (CDPQ) in a Private-Public Partnership. But the contract makes it illegal for public transit to compete with the new metro, slowly cannibalizing the public system (the ARTM).

Not even people in Québec are very much aware of this. It's pretty much only transit users and transit fans in Montréal that are aware of this, because it's affecting the quality of transit.

I think it's what makes this model perfidious. People can only see the new shiny metro system and don't care how it's financed. In fact, they see it as a success! Lots of foamers/transit enthusiasts are skipping this part because we got a new metro built in record time.

I'm not a fan of Cult MTL but they have a pretty complete article on the situation:

It’s a private, for-profit system that eats away at public transit funding, saps consumer confidence and is designed not to complement public transit, but compete with it.

So, of course it would be good for pension funds to invest in local projects. Just, please, not like this one.