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Canada Introduces Measures to Boost Pension Fund Investments

Justin Barber

— 1 min read

The Canadian government has announced new measures to encourage increased investment by pension funds within the country. These measures were outlined in the 2024 Fall Economic Statement and include several key changes aimed at facilitating domestic investment opportunities.

  • Investment Limit Removal: The government plans to remove the existing rule that limits pension funds from investing more than 30% in Canadian entities. This change is intended to allow pension funds to make larger investments domestically.

  • Venture Capital Catalyst Initiative: A fourth round of the Venture Capital Catalyst Initiative will be launched with $1 billion in funding for the fiscal year 2025-26. This initiative aims to attract more private venture capital by offering more favorable terms to pension funds and other institutional investors.

  • Mid-Cap Companies Support: Up to $1 billion will be provided to support mid-cap growth companies. The government's investment will match 25% of new private investments to encourage additional private capital in the growth equity market.

  • AI Data Centre Investments: The government aims to unlock up to $45 billion in loans and equity investments for AI data centre projects. Pension funds will be required to invest at a 2:1 ratio of their own capital to access these opportunities.

  • Airport Investments: The government is engaging with airports and pension funds to explore ways to incentivize investment and development on airport lands, including potential changes to airport authority ground leases.

  • Utility Ownership Threshold: The government is considering lowering the 90% threshold that limits municipal-owned utility corporations from attracting more than 10% private sector ownership. This change would allow pension funds to acquire a higher ownership share in these entities, potentially aiding municipally-owned electricity utilities in expanding their infrastructure.

These measures are part of the government's broader strategy to create a more attractive investment environment in Canada, aiming to boost the economy and enhance innovation while ensuring strong returns for pension funds.

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