Global Capital Warms to Canada as Investment Landscape Shifts
Chief executives from powerful global investors say Canada’s efforts to attract capital have captured their attention, and now the country needs to deliver quickly on its promises.
The CEOs emerged from two days of frenetic meetings at the Canada Investment Summit in Toronto signalling their optimism that the cumbersome Canadian investment environment they had encountered in previous deals is on the cusp of changing for the better.
“Canada is a bit of a sleeping giant, economically,” Blackstone Inc. president and chief operating officer Jon Gray, who oversees US$1.3-trillion of assets, said during a panel discussion on Tuesday.
In comments on and offstage, several CEOs said the country’s trusted reputation is intact, and contrasts well against a backdrop of volatility and uncertainty sweeping through trade relationships and financial markets.
Executives are eyeing ways to invest capital in coveted Canadian resources, such as critical minerals, natural gas and clean energy, as well as in the country’s untapped capacity to build and power data centres.
But those CEOs are waiting to see tangible signs of Canada’s economy waking up, including a deeper pipeline of investable projects, regulatory and permitting barriers coming down, and a more generous tax framework.
“The regulation, the permitting, the taxation – all well-intended,” Mr. Gray said, “but people didn’t think about the cumulative impact.”
The summit, led by Prime Minister Mark Carney and two of the country’s largest pension funds, drew roughly 250 CEOs and top executives to Toronto for two days of meetings, dinners and receptions.
It was also a platform for Ottawa to announce tax incentives, such as an expanded, upfront “mega deduction” on investment costs, and launch a process to allow private investment in airports.
“There’s a level of urgency and there’s a level of ambition,” said John Graham, CEO of the $864-billion Canada Pension Plan Investment Board and a summit co-organizer, in an interview. “The most important thing is now we’ve got to maintain this momentum.”
BlackRock Inc. CEO Larry Fink, sitting next to Mr. Gray on stage on Tuesday, said the demand to build new infrastructure is increasingly outpacing available investment capital, ramping up already fierce competition for dollars.
And BlackRock, which manages US$15.3-trillion, has historically “been challenged in finding deals within Canada itself,” he said.
But if Mr. Carney and Canadian CEOs can deliver on what they promised at the summit, “even in this more challenging world for supply of capital, Canada will be a large beneficiary,” Mr. Fink said.
In particular, surging demand to build AI infrastructure and computing capacity presents an opportunity for Canada that the country has not yet fully tapped.
“We’re waiting to see those projects. We’re ready to put the money in the ground,” Mr. Fink said.
Annette Mosman, the CEO of €639-billion Dutch pension fund APG Group, said she was impressed by Mr. Carney’s narrative linking politics and policy “in terms of getting things done.”
Energy, advanced technology and defence are familiar themes for European investors, Ms. Mosman said in an interview. “I think Canada now is a bit quicker compared to Europe, making it more tangible,” she said.
The federal government’s openness to private investment in its four largest airports – in Toronto, Vancouver, Montreal and Calgary – is early proof “there are more concrete, investable assets” on the table, she said.
Christian Sewing, CEO of Germany’s largest bank, Deutsche Bank AG, said on a panel that Canada’s efforts to attract investment and bolster the economy have been “heroic.” He took notes from the summit on what the German government needs to do to “top” Canada when it holds its own investment summit next month.
As geopolitical turmoil has escalated, global investors have shifted their approach in the past year, emphasizing democratic values, independent institutions and reliability – all of which they can find in Canada. The country is “on the map” and more important than ever as investors seek out new opportunities to diversify their portfolios, he said.
This is a major reason Deutsche Bank and major German investors, including state-owned development bank Kreditanstalt fuer Wiederaufbau, travelled to Canada to attend the summit, he said. However, the ability to execute is the greatest hurdle that Canada faces.
“You have the capital, you have the skills, you have the resources, and in my view, you have something which the Prime Minister again and again emphasized – you have trust and values. In the times we are living, the latter point is so important,” Mr. Sewing said.
“What you really need to show over the next four months is delivery.”
Barclays CEO C.S. Venkatakrishnan said the rupture in Canada-U.S. trade and bilateral relations is likely to be felt in border states in the U.S., and that political discussions are taking place in states including Vermont, Maine and Michigan. Ultimately, he said, this is a chance for Canada to make improvements to trade.
“This is an opportunity to correct an imbalance,” he said on a panel.
French asset manager Ardian SAS already has about $7-billion invested in Canada and a Montreal office with 30 staff. Co-CEO Mark Benedetti, who is Canadian-born and based in New York, said in an interview he is “really seriously” considering launching a fund to invest in Canada’s middle market.
“What I found about this summit today is a real sense of optimism,” he said.
And that was “not just from the top down, from the government, from Prime Minister Carney,” he said, “but from all of my peer investors.”
This article was first reported by The Globe and Mail
