Global Investors Are Eyeing Canada Again, Scotiabank CEO Says

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(Bloomberg) — Foreign investors are increasingly looking at ways to deploy capital in Canada, a trend that’s extending to the country’s own pension funds, according to Bank of Nova Scotia Chief Executive Officer Scott Thomson.

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“You have seen a significant change in tone from international investors to Canada,” Thomson said Wednesday on an analyst call after the bank reported fiscal second-quarter earnings. “Over the last 15 years — and I’ve lived this — you’ve seen a lot of foreign money leave Canada, and now you have a lot of foreign money looking at Canada.”

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Prime Minister Mark Carney has been selling Canada abroad through trade missions and is inviting the world’s biggest investors to a summit in Toronto later this year. His government has pledged to help get major infrastructure and resource-development projects off the ground. Earlier this month, he reached a deal with the oil-rich province of Alberta on industrial carbon pricing. That’s a federal condition to support a proposed pipeline, part of what Thomson referred to as a “grand bargain” with Western Canada. 

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Now, even the country’s massive pension funds, which have faced criticism for not investing more domestically, are seen as potential investors, Thomson said. Carney’s government is also considering spinning off or selling ownership stakes in the country’s airports, a prospect likely to appeal to the Maple Eight pensions.  

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“Pension funds in Canada have historically looked outside of the borders,” Thomson said Wednesday. “Now, I think they’re increasingly looking inside of the borders.”

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Shell Deal

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As evidence of that shifting sentiment, he pointed to last month’s announcement that UK-headquartered Shell Plc will acquire Canadian shale producer Arc Resources Ltd. for $13.6 billion. It’s the biggest deal in the Canadian energy patch in more than a decade and a significant shift from an earlier trend of oil majors steadily shedding Western Canadian assets.  

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While rising energy costs have hit Canadian consumers and businesses, higher oil prices have also boosted the government’s finances through higher tax revenue, giving it more fiscal capacity to help parts of the country that have been hurt by US tariffs, Thomson said. 

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“As you look out to 2027, I’m actually relatively optimistic about the outlook for Canada,” he told analysts. Despite the “tragic aspect” of the war in Iran, “We’re an oil-exporting nation. You’ve got a new business-friendly government that is trying to get things done. And so, as we look further out, I actually I think we’re going to see some good things in the Canadian environment.”

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Thomson’s optimism was echoed by Bank of Montreal CEO Darryl White, who said on a separate earnings call he also sees the possibility of stronger growth in Canada. 

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“Recent federal measures such as setting firm deadlines for project reviews and approvals within one year, streamlining consultations, establishing special economic zones and trade corridors nationally, and simplifying regulatory reporting are positive, and they’re a good start,” White said. 

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