Pension funds are Canada’s ‘crown jewels.’ Should they invest more at home?

globalnews.ca:

Signals that Ottawa wants more domestic investment from Canadian public pension funds are being amplified by some members of the business community who argue there’s more these large pools of capital can do to boost Canada’s economy.

But the pension plans themselves are pushing back against suggestions that anyone in government should dictate how they invest Canadians’ retirement savings.

An open letter sent to Finance Minister and Deputy Prime Minister Chrystia Freeland on March 6 urged the Liberals to amend rules governing pension funds to encourage more Canadian investment. It has been signed by nearly 100 current and former executives from Canada’s business community.

“Canada has great companies, true global champions. These competitive businesses deserve our support, and we must create many more. Increasing investments in Canada should be a national priority,” reads the letter, sponsored by Montreal-based investment management firm Letko, Brosseau & Associates Inc.

The vast majority of the CEOs supporting the push are from the mining and energy sector, which also disproportionately makes up listings on the Toronto Stock Exchange. The list also includes the top executives from telecom giants Rogers Communications Inc. and Telus Communications Inc., grocers including Empire Co. Ltd. and Metro Inc., as well as National Bank of Canada – the sole representative from Canada’s Big Six banks.

Letko Brosseau laments the decline in pension fund holdings that are allocated to publicly traded Canadian firms. Roughly four per cent of Canadian funds’ equity investments were allocated domestically at the end of 2022, down from nearly 28 per cent in 2000, according to Pension Investment Association of Canada data.

This is despite