Bold claim: Canada’s pension power remains restlessly invested across the border, even as nationalist rhetoric urges a homegrown focus. That’s the core tension this piece unwinds: giant Canadian funds still tilt heavily toward the United States, raising questions about domestic investment, risk, and long‑term strategy.
Among them, the Canada Pension Plan (CPP) stands out as Canada’s largest pension fund, reporting a record $780.7 billion in assets. Remarkably, 47 percent of those assets are allocated to the U.S., while just 13 percent stay in Canada. This U.S. tilt hasn’t shifted in the year since President Trump returned to office, according to third‑quarter results released recently.
The CPP’s U.S. holdings have built up steadily since 2005, a period that followed Ottawa’s removal of foreign‑holding limits on Canadian pensions and RRSPs. Today, the CPP has about $366 billion invested in the U.S. and roughly $98 billion in Canada.
CBC’s analysis shows the CPP isn’t alone among Canada’s eight largest funds, collectively holding about $1 trillion in U.S. assets. For instance, OMERS—the Ontario Municipal Employees Retirement System—holds 55 percent of its portfolio in the U.S., and the Public Service Pension (PSP) holds 40.5 percent there. Only three of the Maple Eight still have more Canadian assets than American: the Healthcare of Ontario Pension Plan (HOOPP), the Ontario Teachers’ Pension Plan (OTPP), and the Alberta Investment Management Corp. (AIMCo).
When asked about these U.S. allocations, CPP spokesperson Michel Leduc acknowledged rising geopolitical concerns but framed the CPP’s approach as long‑horizon and risk‑aware. “We are not easily whipsawed by current events or electoral cycles, even as we monitor turmoil carefully to avoid excessive risks,” he stated. He also noted that CPP’s U.S. exposure is not out of line with global diversification measures; by comparison, major indices such as the MSCI World Index and the FTSE 100 are heavily weighted toward the U.S.—around 65 percent content—so 47 percent U.S. exposure is actually modest in that global context.
Many observers question why more domestic investment can’t flow to Canada. Daniel Brosseau, president of Letko Brosseau Global Investment Management in Montreal, argues that pension funds do more than fund retirement—they shape the economy by financing plants, equipment, and jobs. Their choices can influence Canadian wages and overall national wealth. A 2024 letter, co‑signed by 90 investment leaders, urged Ottawa to offer incentives for the Maple Eight to increase domestic investments, highlighting roughly $3 trillion in “dry powder” available for deployment in Canada.
Economist Sen. Clément Gignac notes a shift in sentiment, with uncertainty in the U.S. and new opportunities at home prompting a reassessment of U.S. exposures. The Maple Eight recently met with Canada’s finance minister in Toronto to explore avenues for more Canadian investments, including a quarterly forum to align on potential joint ventures that could bring more capital home.
Yet Ottawa has stopped short of mandating a “Buy Canadian” policy. The government has tools to influence behavior but has not imposed foreign‑holding limits since 2005. Finance Minister François‑Philippe Champagne emphasizes a balanced approach: while there’s interest in expanding domestic opportunities, pension funds remain independent and cautious, guided by long‑term policy outcomes rather than short‑term political pressures.
Prominent voices from academia echo that diversity is essential. Keith Ambachtsheer of the University of Toronto’s Rotman School of Management notes the logic of holding a large U.S. share in a global portfolio, given the U.S. market’s sheer size. He concedes there’s risk, but highlights strong long‑term performance—CPP averaged about 8.4 percent annualized returns over the past decade despite geopolitical tensions.
Looking ahead, fund managers say they are watching U.S. developments closely while pursuing Canadian opportunities, especially in large‑scale national projects. Canada’s Major Projects Office has earmarked funding to accelerate key initiatives, signaling a strategic push to bolster domestic investment conditions. Industry representatives stress that the CPP and its peers seek low‑risk, predictable, long‑term returns through assets such as infrastructure, utilities, and airports, aligning with the Canada Pension Plan Act’s objectives rather than impulsive moves.
So, is it prudent to keep a large slice of retirement savings in the U.S., given global diversification and Canada’s own growth plans? And with new domestic projects on the horizon, will Canada’s big pension funds shift more capital homeward in the near term, or will the U.S. position remain the backbone of a globally diversified portfolio? Share your view in the comments: should Canadian pensions rebalance toward Canada more aggressively, or is a broad, global approach the wiser path for long‑term retirees?
