How could Canada's pension fund invest more at home? Finance committee chair wants to know

Canada Pension Plan managers face the prospect of hearings by the House of Commons finance committee after MPs learned that only a small fraction of the public pension plan's billions of dollars of assets are invested in Canada.

Liberal MP Karina Gould, the newly elected chair of the committee, said it is important for the CPP to be managed effectively but she would like to know why the fund that provides retirement benefits for most Canadians isn't investing more in the domestic economy.

"It is concerning," Gould said Thursday.

She said she wants to understand why so little is invested in Canada and how the public pension fund could not only "bolster the Canadian economy, but also support Canadians and their pensions."

Gould said the committee will be busy holding pre-budget consultations and examining Bill C-4, which includes a tax cut for Canadians. However, if committee members agree, she said hearings into the Canada Pension Plan could take place in the fall.

"In this economic moment that we're in, it's really important that we have an understanding of, you know, where our pension funds are investing," Gould said in an interview. "It's definitely something that could be of interest to the committee."

Gould said committee hearings could also look at the CPP's mandate and whether it should more closely resemble the double mission of the Caisse de dépôt et placement du Québec — the province's public pension manager that is charged with both making money and investing in Quebec's economic development.

"It's an interesting question to explore," she said.

Gould's comments come after the Canada Pension Plan Investment Board (CPPIB), also known as CPP Investments, revealed that just 12 per cent of the CPP's assets are invested in Canada — its lowest level ever. The largest chunk of its $714-billion fund, 47 per cent, is currently invested in the United States — its highest level ever.

The revelation has raised questions about whether the CPPIB should be investing more in Canada while the country is in the midst of a trade war with the U.S.

Those who support the high level of investment in the United States by the CPP, including the CPPIB itself, argue the plan's mandate is to make money. They argue U.S. investments offer more diversity and higher returns — which help ensure the plan will be able to pay out benefits for years to come.

Others, however, question why the plan isn't doing more to invest in Canada to create Canadian jobs and infrastructure projects.

They are also concerned about the plan's exposure to the U.S. at a time when President Donald Trump's administration has made the country a riskier place to invest.

Like Gould, the NDP's interim leader leader and finance critic Don Davies was surprised to learn that the CPP's investment in Canada had dropped to 12 per cent.

"I think it's alarming. I mean I think it's only 12 per cent of, you know, such an incredibly large fund of monies that are paid by Canadian employees and Canadian employers," he said.

While Davies says the fund is well managed, he wants the government to review the CPPIB's mandate.

"I personally think [the mandate] should be expanded to also include development of the Canadian economy," he said.

"There's no shortage of projects that will strengthen our economy and also give good returns to workers and employers," Davies said.

"I think Canadians would be surprised to learn that their own pension monies are being used to invest in other countries in such a vastly disproportionate way than in their own country."

Davies said he would welcome hearings on the issue by the finance committee, of which he is not a member.

The Conservatives have not yet responded to a request to comment.