"Pension funds have the potential to boost Canada's economy"
In a fall economic update presented to the parliament, Canada intends to explore the elimination of a long-standing rule preventing federally regulated pension plans, including the Canada Pension Plan Investment Board (CPP Investments), from acquiring majority control of companies.
The rule, in place since 1985, restricted pension funds from holding more than 30 percent of the voting shares of most corporations.
CPP Investments, managing nearly 600 billion Canadian dollars in assets, is among the world's largest pension funds. The Canadian government expressed its desire to expand the role of pension plans in investing in various sectors, including Canadian equities, real estate, infrastructure, and fixed income.
“The federal government believes that continued domestic investments by Canada's pension funds have the potential to boost Canada's economy and create good careers for people across the country,” the economic update says.
Canada also proposed that large federally regulated pension plans disclose the distribution of their investments, both by jurisdiction and asset type, to the country's banking regulator.
This potential policy change aligns with the existing practices of other major Canadian pension funds, such as the Ontario Teachers' Pension Plan Board and the Ontario Municipal Employees Retirement System, which are allowed to own companies outright as they operate under provincial regulations.
