Canada’s largest pension funds have advice for Justin Trudeau’s government as it prepares to double its infrastructure investments over the next decade: follow the Australian model and think big.
The funds, which manage more than C$760 billion ($568 billion) in combined assets, say they need large projects like airports, toll roads and ports to justify their time and investment with so many global assets competing for their cash.
"What are we looking for? We’re looking for projects of scale," said Mark Wiseman, chief executive officer of Canada Pension Plan Investment Board, the country’s largest pension fund with C$283 billion in assets.
The Canadian government isn’t expected to provide extensive details of its infrastructure plan in the March 22 budget because it’s still developing a long-term strategy. Federal officials have said an extra C$10 billion will be made available over the next two years while it crafts a broader strategy to deploy an additional C$20 billion to each of three silos over the next decade: public transit, green infrastructure, and social infrastructure.
The country’s largest pension funds, including Canada Pension Plan, Caisse de Depot et Placement du Quebec, and Ontario Teachers’ Pension Plan, are encouraging the federal government to be ambitious for the longer-term strategy.
Canadian pension funds and money managers have become global leaders by investing in ports, toll roads, power plants and other infrastructure, deploying billions annually as they reduce risk in their portfolio through geographic diversification.