By: Julius Melnitzer | May 23, 2024
The federal government’s promise to encourage Canadian institutional investors to invest more domestically is taking shape with two key initiatives found in the 2024 budget.
The first involves the creation of a working group led by Stephen Poloz, former Governor of the Bank of Canada, to explore domestic opportunities for Canadian institutional investors in various sectors, including digital and physical infrastructure, artificial intelligence, airport facilities, venture capital and residential construction. In tandem, the group will consider removing the ‘30 per cent rule’ for domestic investments, which restricts Canadian pension funds from holding more than 30 per cent of the voting shares of most corporations.
The second initiative involves amendments to the Pension Benefits Standards Act requiring large federally regulated pension plans to disclose their investments by jurisdiction and asset class within each jurisdiction.
But looming over the working group’s task is a fundamental issue. “It will be very difficult to define what amounts to investment in Canada,” says Jeffrey Sommers, a pensions, benefits and executive compensation partner at Blake, Cassels & Graydon LLP. “There are many companies that have headquarters in Canada, but do a great deal of business elsewhere, and vice-versa.” MORE . . .
Julius Melnitzer is a Toronto-based legal affairs writer, ghostwriter, writing coach and media trainer. Readers can reach him at [email protected] or https://legalwriter.net/contact.
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