Canada calls on its pension funds to invest at home in age of ‘economic nationalism’ (www.ft.com)

submitted 5 days ago by Scotty@scribe.disroot.org to c/canada@lemmy.ca

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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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[-] pedz@lemmy.ca 3 points 5 days ago* (last edited 5 days ago)

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 5 days ago

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 5 days 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.