Prime Minister Mark Carney makes an announcement on the Canada Strong Fund, Canada's first sovereign wealth fund, at the Canada Science and Technology Museum in Ottawa on April 27.Justin Tang/The Canadian Press
The federal government should force the investment arms of the Canada Pension Plan and public-sector pensions to invest additional funds in this country rather than launching a sovereign wealth fund, says the Conservative chair of the Senate finance committee.
In an interview with The Globe and Mail Wednesday, Senator Claude Carignan said the model – known as a dual mandate – has worked well in Quebec with the Caisse de dépôt et placement du Québec.
“My position is that I think that the pension funds need to invest more in Canada,” the Quebec-based senator said.
While the federal government has frequently said it wants to help create conditions that encourage such funds to invest more domestically, Mr. Carignan said urging voluntary action hasn’t worked and legislative changes should be considered.
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“We could change their mandate and put a note that they have to invest more in the Canadian economy, like we have with Caisse de dépôt,” he said. “The other pension plans don’t have this objective, but I think that they have to be more involved in our economies.”
Mr. Carignan said a dual mandate would eliminate the need for the $25-billion Canada Strong Fund that Prime Minister Mark Carney announced last month tied to the government’s spring economic update.
The Conservative senator said he was expressing a personal view and acknowledged his comments place him at odds with his own party.
The CPP is jointly managed by Ottawa and the provinces, except Quebec. Changing the CPP investment rules would require the support of Ottawa and at least two-thirds of participating provinces, representing two-thirds of the population of those provinces.
The Public Sector Pension Investment Board (PSP Investments) invest funds for the pension plans of the public service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force.
The CPPIB and PSP Investments have virtually identical mandates to invest assets with a view to achieving maximum rates of returns without undue risk. Neither fund is subject to minimum amounts with respect to domestic investments.
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The CPPIB held net assets worth $780.7-billion as of Dec. 31, 2025, while PSP Investments held $299.7-billion as of March 31, 2025.
Under pressure to put more money to work in Canada, the chief executives of Canada’s largest pension funds have argued that the plans have thrived on an independent governance model that keeps them free from political meddling.
Some pension-sector experts have suggested that the dual mandate that governs the Caisse has been a drag on its returns over the past decade. But comparisons with peers are hard to make given the different mix of clients the funds serve.
Provincial law in Quebec requires the Caisse to pursue “optimal returns” for its six million depositors “while contributing to Quebec’s economic development.” The fund now manages $517-billion in assets, and its former CEO, Michael Sabia, is Clerk of the Privy Council in Mr. Carney’s government. Its Quebec investments include infrastructure projects such as Montreal’s REM light-rail line.
Conservative MPs stressed the need for CPP independence in an exchange last month with Canada Pension Plan Investment Board senior managing director Michel Leduc.
During a recent finance committee meeting in the House of Commons, Conservative MP Pat Kelly criticized calls for the CPP to have a domestic investment mandate.
“We hear voices, from time to time, saying things like, ‘Why doesn’t the CPPIB invest in Canada?’ ‘Shouldn’t they invest more in Canada?’ or more chillingly: ‘Should they be compelled to invest more in Canada?’ ” he said, before asking Mr. Leduc to comment on the importance of the fund’s independence.
Mr. Leduc responded by saying that the CPPIB does invest considerably in Canada, which he pegged at more than $115-billion.
“The point about independence is critical on multiple fronts, including our ability to access global markets,” he said. “If we were seen to have different non-commercial objectives – perhaps national-interest objectives – it would make our life a lot more difficult regarding accessing prized assets around the world.”
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Mr. Leduc told The Globe Wednesday that the CPPIB is one of the best performing pension funds in the world and Canada should not be adding barriers.
“We have heard many voices about this in recent years and while everyone is entitled to their opinions, that respectfully doesn’t extend to their own facts,” he said.
In April, Ontario Municipal Employees Retirement System was the first major Canadian pension fund to set a target to boost its exposure to Canada. CEO Blake Hutcheson said OMERS plans to add at least $10-billion of new investment in Canada over five years, which would increase the part of its portfolio in Canadian assets to 25 per cent from 18 per cent.
John Fragos, a spokesperson for Finance Minister François-Philippe Champagne, said the OMERS move shows the government’s “carrot” approach is working.
“We don’t need a stick,” he said.