Canadian Business Leaders Tell Pension Funds to ‘Buy Canadian’ as U.S. Trade War Raises Investment Pressure

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Canada’s renewed push to put more domestic capital behind Canadian companies is moving beyond consumer slogans and into the country’s biggest pools of long-term money. At Toronto’s Nrth technology conference on September 23, business and technology leaders urged pension funds, banks and policymakers to do more to help Canadian firms grow at home, arguing that the trade fight with the United States has made economic resilience more urgent.

The message amounted to a capital-markets version of “buy Canadian”: not simply purchasing domestic products, but ensuring promising Canadian companies can find enough financing to scale without automatically looking abroad. That pressure is arriving just as several major pension investors have announced billions of dollars in new Canadian commitments, sharpening a debate over how far national economic goals can—and should—fit alongside the funds’ obligation to earn competitive long-term returns.

The Latest Pressure Surfaced at Toronto’s Nrth Conference

The newest pressure surfaced at Nrth, the Toronto technology festival formerly known as Elevate. Vass Bednar, executive director of the Canadian Shield Institute, argued that Canada’s large pension funds should be more willing to take risk on domestic opportunities rather than concentrating their Canadian allocations in comparatively conservative assets such as government bonds and infrastructure. Her co-panellist, North Exit Ventures general partner Tal Schwartz, focused on a different bottleneck: the difficulty Canadian startups can face when they need much larger rounds of capital to move from early-stage promise to scaled businesses.

That distinction matters. The complaint is not that Canada lacks entrepreneurs or seed financing altogether. It is that companies often need increasingly large cheques as they expand sales teams, build infrastructure, enter regulated markets or compete internationally. Schwartz argued that tax policy and capital allocation need to make those later stages easier. With the U.S. trade conflict increasing attention on sovereignty and domestic capacity, the old question of where Canadian retirement capital is invested has become a much more immediate economic argument.

The Push for More Canadian Investment Predates the Trade War’s Latest Escalation

The current debate did not begin with this year’s tariff escalation. In March 2024, more than 90 Canadian business leaders signed an open letter urging federal and provincial finance ministers to encourage pension funds to invest more in Canada. The letter argued that holdings of publicly traded Canadian companies had fallen dramatically from levels seen around 2000 and warned that reduced domestic equity participation could make it harder for Canadian businesses to raise capital, grow and remain headquartered in the country.

That headline statistic requires context. The roughly four-per-cent figure cited in the letter referred to holdings of publicly traded Canadian companies as a share of total pension assets; it did not mean Canadian pensions had only four per cent of their money invested in Canada overall. Large funds also own Canadian infrastructure, real estate, private companies, bonds and other assets. That distinction has been central to the response from pension managers, who have argued that their domestic exposure is broader than a public-equity number suggests and that investment decisions must be judged across entire portfolios.

The U.S. Trade Fight Has Changed the Economics of the Debate

What has changed is the economic backdrop. Bank of Canada Governor Tiff Macklem said on September 21 that the breakdown in Canada-U.S. trade negotiations and new U.S. tariffs had increased uncertainty after businesses spent much of the previous year adapting supply chains and searching for new markets. The Bank estimated that products hit by the newest U.S. measures represented about five per cent of Canada’s goods exports to the United States, but warned that the larger danger could come from companies delaying investment and hiring because trade rules keep changing.

That concern helps explain why domestic investment is being framed as resilience rather than simple nationalism. The Bank said that, if the new tariffs remain, fourth-quarter economic growth could be roughly halved to below one per cent. At the same time, Statistics Canada reported that exports to non-U.S. destinations reached a record $25.6 billion in July, accounting for 33.7 per cent of Canadian exports that month. Companies are diversifying customers; advocates now want capital markets to diversify Canada’s sources of growth as well.

Major Pension Investors Are Already Putting More Money to Work at Home

Some of Canada’s largest institutions are already moving in that direction. At the Canada Investment Summit in Toronto, the federal government said pension funds, insurers and other institutional investors committed nearly $100 billion in new capital to Canadian assets. The announcements included a $50-billion Maple Fund involving CPP Investments and Brookfield Asset Management, a plan by PSP Investments to lift its Canadian exposure by 30 to 40 per cent, and a separate commitment from Ontario Teachers’ Pension Plan to invest an additional $10 billion in Canadian opportunities by the end of 2027.

Those figures are commitments and targets rather than money already fully deployed, which makes execution the next test. PSP chief executive Deborah Orida said the fund expects its Canadian pension capital to rise above $100 billion over the next few years; importantly, she also said the increase reflects attractive investment opportunities rather than a government order. Ontario Teachers’ likewise said its additional Canadian investments must meet its return objectives. The language matters because the funds are signalling that more domestic investing is possible without abandoning the financial standards attached to pension money.

Canada’s Biggest Pension Funds Remain Global by Design

The tension is clearest at CPP Investments, the country’s largest pension investor. As of December 31, 2025, CPP Investments reported about 12 per cent of its assets in Canada and 47 per cent in the United States, with the remainder spread across Europe, Asia-Pacific and Latin America. The fund’s global structure is deliberate: it says diversification across regions and asset classes helps protect contributors from risks that are already heavily tied to the Canadian economy through employment, wages and demographics.

That is why calls for more domestic investment can collide with pension governance. Canadian workers earn their salaries in Canada, pay taxes in Canada and often own homes in Canada, so concentrating retirement assets in the same economy can increase exposure to a single national shock. At the same time, Canada can offer infrastructure, energy, technology and private-market opportunities that fit long investment horizons. PSP says about one-fifth of its portfolio is currently invested domestically, while Ontario Teachers’ says roughly 30 per cent of its gross assets are in Canada. There is no single “Canadian pension” allocation model.

The Startup Financing Gap Is Where Frustration Is Sharpest

The sharpest frustration may be in the growth stage of Canada’s technology market. Schwartz told the Nrth audience that Canada can fund very young companies but becomes harder to navigate when businesses need larger mid- and late-stage rounds. That challenge matters because a company that cannot find enough domestic growth capital may seek foreign investors, shift more operations abroad or sell earlier than founders originally planned. None of those outcomes is automatic, but the financing gap can influence where ownership, intellectual property and high-value jobs ultimately accumulate.

Recent fundraising shows that Canada can build larger pools of technology capital. Toronto-based Portage closed its fourth venture fund at approximately US$600 million in September and said its broader platform manages about US$7 billion. Separately, Radical Ventures announced more than US$1 billion in initial commitments for a new late-stage AI strategy, with backing from institutions including PSP Investments, CPP Investments, HOOPP and OPTrust. Those deals provide evidence of capacity, while the Nrth speakers’ argument is that Canada needs many more vehicles capable of writing large growth cheques.

Ottawa Is Trying to Create Assets Pension Funds Can Actually Buy

Pension executives have repeatedly said that one obstacle to investing more at home is not willingness but the supply of large, investable projects. Ottawa is now trying to expand that pipeline. In September, the government opened the door to long-term private operating concessions at Toronto, Montreal, Vancouver and Calgary airports while keeping public ownership of the underlying airport assets. Canadian pension funds already invest in major infrastructure around the world, so projects of that scale can better match the size, duration and return needs of large institutional portfolios.

PSP’s own examples show how that pipeline can be built. Orida highlighted the Canada Growth Fund’s $2-billion support for the country’s first small modular reactor project and argued that early risk-taking can help create assets that later become suitable for conventional infrastructure investors. The broader idea is straightforward: rather than simply asking pension managers to be more patriotic, governments can create clearer projects with predictable regulation, commercial revenue and enough scale to absorb billions of dollars. For pension funds, investability matters as much as geography.

The Real Test Is Whether Patriotic Capital Can Still Clear the Pension Bar

The debate therefore turns on whether “buy Canadian” becomes an investment opportunity or an investment instruction. Ontario Teachers’ has explicitly tied its new domestic target to Canadian opportunities that satisfy its return objectives. PSP has emphasized that its recent increase in Canadian investing was not driven by a government edict. CPP Investments likewise describes its mandate in terms of maximizing long-term returns while managing risk for contributors and beneficiaries. Those statements draw a line between encouraging domestic capital and directing pension portfolios for broader policy purposes.

Business leaders, meanwhile, are arguing that a country under trade pressure cannot treat capital allocation as disconnected from economic capacity. Their case has gained urgency because U.S. tariffs are forcing manufacturers and exporters to reassess supply chains, customers and investment plans. The practical compromise now emerging is less about fixed domestic quotas and more about making Canadian opportunities competitive enough that large institutions choose them voluntarily. If the new commitments announced this month turn into operating projects, growing companies and durable returns, the “buy Canadian” investment push will have moved from rhetoric to measurable capital deployment.

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