Ottawa is turning the pension dial toward home, not by quotas, but by sweetening the deal. The strategy only works if investable projects appear fast. The government’s push, flagged in reporting that Canada now urges pension funds to invest at home, is paired with rule changes that lower ownership caps, concessionary co‑financing, and a new fast lane for megaproject approvals.
Remove Caps, Dangle Projects
Finance Canada already unlocked the door by removing the 30 percent rule on Canadian entities, and by tying AI data centre financing to a 2:1 pension co‑investment. The Privy Council then stood up a Major Projects Office, promising quicker federal decisions and help structuring financing for projects of “national interest.” That office is even exploring lower limits on municipal utility ownership to let funds take meaningful stakes, a direct fix for scale. Industry Minister Mélanie Joly made the political ask plain in an interview, saying, “we need to think about Canada first and that we need to put capital where our mouth is,” as she told the Financial Times. That line sets intent, but it does not change fiduciary law, so incentives must carry the weight.
Follow The Money Constraints
The math is uphill. CPP Investments still has roughly half its portfolio in the U.S., reflecting where scale and returns have been, as detailed in a recent FT analysis of its allocation. Mandating a home bias would clash with plan statutes that prioritise beneficiaries’ best interests and could invite political risk premia.
Former finance minister Chrystia Freeland captured Ottawa’s leverage instead, praising pension capability at a 2024 PRI speech, saying Canada has “the best pension funds in the world” and “They are really our crown jewels,” in official remarks. That framing justifies handing funds the pen on deal terms, not dictating outcomes, which keeps performance accountability with boards and CIOs.
Here is the mechanism that matters. Ottawa can amend federal regs, tender crown land, and underwrite pieces of project risk. Provinces control most plan oversight, so they must mirror changes for broad impact.
The Major Projects Office can compress federal timelines, but provinces, Indigenous governments, and regulators still gate permits, which means execution rests on coordination, not slogans. If the office consistently lines up bankable assets with clear revenue, plans will move, because they chase durable, regulated cash flows. If not, global allocations will keep outcompeting Canada on diversification and liquidity.
Two tests flip the switch. First, whether cabinet actually issues the promised utility and airport ownership changes within months, not years. Second, whether the office’s first wave of projects secures firm commercial structures, not just announcements. Fail either, and the new domestic pitch becomes soft guidance that investment committees can safely ignore. Hit both, and a voluntary tilt home is plausible without touching fiduciary guardrails or headline returns.
