Canada wants its pension funds to invest domestically. Will that undermine the ‘Maple 8’?
Canadian prime minister Mark Carney won last year’s election in part due to economic nationalism in response to US tariffs. But is this the right approach to the country’s widely-respected pension funds? (Justin Tang/The Canadian Press via AP)
Canada’s pension funds are often held up as the envy of the global pension ecosystem with their good governance and robust internal investment capabilities.
The country punches far above its weight in the pension management universe. Its vaunted ‘Maple 8’ consistently scores high marks for transparency, performance, and long-term financial viability as demonstrated by healthy funded statuses for the beneficiaries they serve.
So much so that the British government has looked to Canada as a model to emulate.
A large part of Canada’s pension success has derived from its propensity to invest outside its borders, with wide-ranging allocations across the US, Europe and as far as India and Australia.
But with 2026 quickly ushering in another year of economic deglobalisation, the Canadian government has sought to shore up its domestic economy, attract more foreign investment, and disentangle its trade dependence with its southern neighbour.
Canada’s behemoth public pension funds, among the world’s largest and most sophisticated institutional investors, have become a part of the debate given their large pools of deployable capital. As such, some Canadian government officials have called on the country’s pension funds to invest more in Canada.
This raises a critical question: will prioritising domestic investment undermine the frameworks responsible for the historical success of Canada’s pension funds?
Different starting points
When delving into the question of whether Canadian pension funds should invest more in Canada, one thing that is clear is just how different the pre-existing landscape is among the existing top investors.
For instance Canada’s largest pension fund, the $559.7bn Canada Pension Plan Investment Board (all dollars in this piece are US ones), reported 47 per cent of its total allocation was to the US at the end of its last fiscal year, compared to just 12 per cent in Canada.
In contrast the $87.7bn Healthcare of Ontario Pension Plan reported that throughout 2025 more than half of its investments were Canadian, including Canadian government bonds.
Another Canadian powerhouse, the $184.5bn Public Sector Pension Investment Board, was somewhere in the middle with roughly 20 per cent of its investments in Canada, while still being heavily invested – 40.5 per cent – in the US.
In Québec the $312.4bn Caisse de dépôt et placement du Québec has had a provincial focus far pre-dating recent tensions with the US brought on by Donald Trump’s second term.
In 2023, it announced plans to double the amount of assets entrusted to Québec external managers to $5.7bn by 2028. Additionally, La Caisse has set the goal of reaching $71.9bn, which would amount to almost a quarter of its assets under management, in investments in Québec by this year.
But the US still represented the largest destination for La Caisse’s investments – 38 per cent at the end of 2024, compared to 30 per cent in Canada.
This diversity complicates any uniform call for greater domestic investment – bringing into focus whether such demands simply refer to higher absolute allocations, increased proportional exposure, some sort of target or something else altogether.
Investment opportunity
Some, though, say Canada has a long way to go to transform itself as a more attractive investment destination - whether for foreign capital or its own pension funds.
Arijit Banik, treasurer at York University in Ontario, told AOX the government’s desire for its homegrown institutional investors to simply invest more in Canada “isn’t good enough”.
“The government of Canada needs to put in supply-side policies that make investing in Canada a better option for capital, if not the best option.”
“This means a better environment for Canadian businesses.”
On this point, industry minister Mélanie Joly – one of several voices calling for greater domestic investment – agrees, along with other government members, the country can and should do more to support its Canadian businesses, generate new jobs, and invest in infrastructure.
To that end, Prime Minister Mark Carney launched a major projects office in August with the goal of advancing infrastructure projects of national importance including ports, railways, critical mineral developments and clean energy initiatives.
Some investors, such as Hoopp, have already expressed interest in backing the initiative. Speaking at the Canadian Club Toronto in September, chief executive Annesley Wallace said the fund would be interested in investing in some of the projects.
“Historically, we haven’t seen as much of those opportunities, especially with the national-level commitment that we would have liked ... the recent announcements around the major projects are exciting.”
Elsewhere, other pension managers are moving ahead with plans to invest more domestically with little concern for government goals. For instance earlier this month CPP Investments announced it would commit a further $539.4mn to its Canadian middle-market private equity program managed by Northleaf Capital Partners, which has been in place since 2006.
CPP cited “compelling investment opportunities in the Canadian market” as its rationale.
Bruce Hogg, head of integrated strategies for CPP, told AOX the decision was unrelated to recent government calls for more domestic investment.
“There is zero connection with the government other than the singular objective as prescribed in our legislation, which is to create as much value as possible.”
“The increased commitment reflects the growth of the Canadian private equity market and the strong performance of the [Canadian fund of funds] program.”
Not alone
In this fragmented era that Joly says results in a need for “economic nationalism”, Canada is far from the only country where this conversation is taking place. Similar conversations are happening in the UK, the Netherlands, Germany and elsewhere.
Indeed it might be reassuring to know that Canada, the poster child for pension funds, is not immune from these trends.
Governments, pension executives, and policymakers in Canada will need to carefully weigh ambitions for greater domestic investment against the long-term investment principles and fiduciary mandates that have historically underpinned their success.
As we’ve seen, Canadian pensions are perfectly willing to invest in Canada. Perhaps the message for politicians everywhere is to work on creating investable opportunities first, and issue demands of their pension funds second.