Freeland taps Stephen Poloz to entice pension funds to invest in Canada
Canada’s finance minister has asked former central bank governor Stephen Poloz to examine ways to entice its pension funds to invest more in the country.
Poloz will lead a “working group” that will look at what it will take to get Canadian pensions to put more of their capital into domestic opportunities — including housing development, venture capital and infrastructure such as airports, the government said in budget documents Tuesday.
Large public pension managers including the Canada Pension Plan Investment Board have few restrictions on where they can invest. Over time, they’ve made a huge swing into foreign markets, seeking better returns and greater diversification.
That shift has spurred debate within the country. Last month, more than 90 business leaders, including current and former chief executives, signed an open letter to Finance Minister Chrystia Freeland and her provincial counterparts, urging them to alter the rules for pension funds to “encourage them to invest in Canada.”
Poloz was governor of the Bank of Canada from June 2013 to June 2020, when his seven-year term expired.
Freeland’s budget also takes steps to advance the government’s open banking framework.
Open banking — also called “consumer-driven banking” — allows consumers and businesses to securely transfer their financial data to other service providers. In theory, that should increase competition in the financial services sector, but the government has been slow to bring in the necessary legislation — it says it’s coming soon.
Freeland’s budget appoints the Financial Consumer Agency of Canada to take charge of overseeing the open banking rules. The government is also setting aside $4.1 million for the Finance Department to finish the policy
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