BMO's investment over ten years will be focused on sectors deemed critical to Canada's economic security and resilience.Christopher Katsarov/The Globe and Mail
Bank of Montreal BMO-T said it will deploy up to $70-billion in new capital over 10 years for sectors considered critical to Canada’s economy.
The bank said its plan is aimed at supporting Canada’s economic security and resilience. It’s the latest move among Canada’s biggest banks – ahead of Ottawa’s investment summit Tuesday – targetting sectors Ottawa believes will bolster the economy.
BMO will focus on key industries, including electricity, energy and transportation infrastructure, mining and critical minerals, AI computing, defence and security, and oil and gas. The capital will be issued through bank financing, debt capital markets activity and the raising of public equity.
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The announcement comes ahead of the Canada Investment Summit, where major foreign firms will seek out opportunities to invest in the country’s major projects. The efforts are critical to Prime Minster Mark Carney’s plan to reduce dependence on the United States.
BMO chief executive officer Darryl White said foreign investors are most interested in projects that they can get involved in quickly and will offer the best returns.
“It’s very important that we’ve turned the tone in Canada to a build-first and an open-for-business-first tone, which is very inviting to the rest of the world,” Mr. White said in an interview. “And you’re seeing it now in the FDI that’s turning our way.”
Over the past year, calls have mounted for Canada’s six biggest banks to increase lending for small- and medium-sized business and for pension funds to boost investments in the country. At a Senate committee in June, Canada’s banking regulator cited a fund by JPMorgan Chase & Co. JPM-N, the world’s biggest bank, saying Canadian banks should “step up and make the same commitment to Canada.”
Last year, U.S.-based JPMorgan said it would invest US$1.5-trillion over 10 years in industries that bolster the U.S. economy’s security and resilience. Earlier this year, the bank said it is expanding that support to Canada, Europe and Britain.
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Royal Bank of Canada RY-T announced it is launching a $1.4-billion fund aimed at investing in Canadian technology companies, including aerospace and dual-use defence companies. The lender said the fund will focus on sectors where it believes the country’s greatest strengths lie.
Canadian Imperial Bank of Commerce CM-T is committing $2-billion over five years for small- and medium-sized defence-related and dual-use businesses as Ottawa spends to boost the country’s military base.
Bank of Nova Scotia BNS-T is planning to issue Canadian defence bonds to help raise capital for companies.
National Bank of Canada NA-T tapped former top general Rick Hillier to advise on defence and assist with the lender’s efforts to grow its client base in the defence and security industry, as well as among dual-use companies.
BMO said its efforts should support national priorities to help Canadian businesses compete as the global economy shifts. This could include initiatives proposed to the Major Projects Office (MPO), as well as projects related to Canada’s national electricity strategy, the province of Alberta and the oil sands, sovereign AI and analysis related to the defence and oil and gas sectors.
The bank identified the sectors by determining how to support the projects that have been announced, as well as insights into where its clients are looking to invest and spend, Mr. White said.
But the key to attracting foreign investment in these projects will rely on Ottawa’s ability to speed up the time from proposal to launch, Mr. White said.
“We’re off to a good start, but it’s still too slow,” he said, citing the MPO as an example of an initiative aimed at accelerating projects.
“I can’t give you a long list of places where we can say that we’ve accelerated from a two to a 10, but I do know there are a lot of initiatives to try to get that dial turning faster. I can’t encourage it enough. It’s the number one issue that gets raised by our client base.