Just 12% of Canada Pension Plan investments are in Canada, while nearly 47% are in the U.S., raising debate over domestic economic priorities.
Pension Allocation Surprises Canadians
The Canada Pension Plan (CPP), a cornerstone of retirement security for millions of Canadians, is drawing renewed scrutiny after its investment board disclosed that only 12% of its $714 billion in assets is invested in Canada — the lowest level ever recorded. In contrast, a record 47% is now invested in the United States.
The figures, released by the Canada Pension Plan Investment Board (CPPIB), have sparked concern among former officials and economic stakeholders. “If Canadians knew how little was invested at home, I think they’d be shocked,” said Susan Peterson, a former top federal finance official who helped reform the plan in the 1990s.
Shifting Strategy and Growing U.S. Exposure
The CPPIB says it follows a long-term, globally diversified investment strategy aimed at maximizing returns for current and future beneficiaries. According to Michel Leduc, head of public affairs for the CPPIB, U.S. assets have increased in part because of the strong performance of American markets.
“U.S. stocks have gone up,” said Leduc. “It’s not just about where we invest — it’s about how those investments perform.”
Still, critics argue that rising U.S. exposure could increase vulnerability to foreign policy shifts, especially under renewed U.S. leadership from Donald Trump. His tax policies could impose new costs on Canadian funds operating south of the border.
Calls to Reinvest at Home
Economic observers, business leaders, and politicians are raising questions about the broader economic implications of such limited domestic investment. In March 2024, dozens of Canadian executives urged Ottawa to amend pension fund rules to prioritize investments in Canada, citing their potential to create jobs, build infrastructure, and stimulate local economies.
Senator Clément Gignac and former Bank of Canada governor Stephen Poloz have each called for greater domestic opportunities for institutional investors. “It’s time to ask whether the plan’s single mandate of maximizing returns needs to evolve,” Ginac said.
A Historical Shift
Until the early 2000s, CPP investments were largely confined to Canadian bonds and public sector assets. That changed when the federal government eliminated the foreign property rule in 2005, allowing pension funds to move capital abroad freely. Since then, the share of CPP assets invested in Canada has dropped dramatically — from 74% in 2005 to just 12% today.
The plan’s total assets have grown exponentially over that same period, from $81 billion to over $700 billion, with projections to hit $1 trillion in the next few years.
Debate on Mandate and Risk
Critics like investment manager Daniel Brosseau say the lack of targeted incentives for Canadian investment weakens long-term economic resilience. He proposes taxing foreign pension income to shift the balance. “Right now, there’s no meaningful distinction between a Canadian and a foreign investment in the tax code,” he said.
Meanwhile, the Canadian Labour Congress is calling for a broader public conversation. “Canadians pay into this plan and expect it to support their future — and potentially, their communities,” said Chris Roberts, director of social and economic policy.
Public Sentiment and Policy Outlook
The CPPIB insists its approach is prudent, ethical, and focused on long-term returns. But growing public awareness may pressure the government to reconsider how pension funds balance returns with national interest.
Groups like the National Pensioners Federation, which represents older Canadians, say members want investments that improve local infrastructure, healthcare, and public services. “We’re watching closely,” said president Trish McAuliffe. “Pensioners want to see our money working for Canada — not just Wall Street.”
