Federal Government Proposing to Lift Pension Funds’ 30 Percent Investment Cap

December 13, 2024 TruthUSA

The Liberal government plans to eliminate the cap restricting Canadian pension funds from owning more than 30 percent of the voting shares of Canadian entities.

Deputy Prime Minister Chrystia Freeland announced that the upcoming fall economic statement will remove the cap on pension funds holding over $3 million in assets, allowing them to invest in Canadian entities more freely. Ottawa intends to work with the provinces on how to handle provincially regulated pension plans.

Additionally, Freeland revealed that there will be a fourth round of funding for the Venture Capital Catalyst Initiative to promote investment in Canada’s startup sector. The government will also invest $1 billion in mid-cap growth companies and enable up to $45 billion in combined loan and equity investments for specific AI data center projects.

Ottawa is also considering reducing the 90 percent threshold that restricts municipal-owned utility corporations from attracting more than 10 percent of private sector ownership. This change would allow them to acquire higher ownership stakes in the entities, enabling them to access more capital and fulfill future demand.

The government will also engage with airports and pension funds to explore ways to further encourage investment in lands owned by airports. This could involve altering rules regarding airport authority ground leases.

Freeland emphasized that Canada is currently engaged in a “global fight” for capital, especially with the incoming U.S. administration threatening 25 percent tariffs on Canada under Donald Trump. She noted that the administration is aiming to create “economic uncertainty outside the United States as a strategy to deter investment elsewhere.”

“Our government is fighting for Canadian jobs, our government is fighting for capital, and the measures I’m announcing today on … pension funds are part of that,” she said.

Freeland will deliver the government’s Fall Economic Statement on Dec. 16, a day before Parliament adjourns for the winter break. The statement is expected to include measures to enhance border security and double the loan limit to $80,000 for the Canada Secondary Suite Loan Program, which assists homeowners in establishing rental units on their properties.

The deputy prime minister will also disclose whether the government achieved its economic goals of a 42.1 percent debt-to-GDP ratio for the 2023–2024 fiscal year and keeping the deficit below $40.1 billion. During a press conference on Dec. 10, Freeland confirmed that the government would meet the debt-to-GDP ratio objective but did not address whether it would fulfill the second commitment.

Source link