Terence Corcoran: Why we should invest more in the U.S. market

The U.S. and Canada flags next to the Blue Water Bridge border crossing in Point Edward, Ont. Photo by GEOFF ROBINS/AFP via Getty Images files

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Among the numerous fiscal con jobs in Prime Minister Mark Carney’s Liberal economic update is the ongoing attempt to lower perception of the government’s debt level by claiming assets that Ottawa does not own. The government claimed “net debt” — which logically implies total debt minus assets supporting the debt — would come in at $1.4 trillion this fiscal year.

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It’s a fake number. The actual net debt figure is $2.2 trillion. The Carney Liberals are now in the habit of including in assets money that does not belong to the government, namely $800 billion in value sitting in the Canada Pension Plan (CPP). As many critics and observers have noted, inclusion of the pension assets is nothing more than an accounting trick. The money technically and politically belongs to Canadians as pension savings; the government could not use the money if it had to pay down debt.

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But that’s just one part of the muddle behind Ottawa’s pension fixations. A deeply ironic aspect is that most of the $800 billion sitting in the CPP exists as a result of deliberate and strategic investing outside of Canada, with most of it going to the United States. In 2025, only 12 per cent of its $800 billion was invested in Canada, with 47 per cent going to the U.S. and the remainder elsewhere. Foreign investments have made the CPP one of the best performing pension funds in world, with U.S. and foreign investments generating $550 billion or almost 70 per cent of all assets now held for Canadian pensioners. Quebec’s Caisse de dépôt pension system also invests 70 per cent of its assets abroad.

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Despite the obvious benefits to pensioners, nationalists and interventionists see foreign investments by Canadian pension funds as detrimental to Canadian economic growth. The CPP and Quebec funds are part of the Maple Eight group of government pension funds that now manage $2.3 trillion on behalf of pensioners. Jim Stanford, former auto workers union economist, wrote recently that “Shockingly, our own Canada Pension Plan has half its total assets in the U.S.” It’s time, he said, to “bring some of that capital home.”

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It is time, according to Policy Options in a paper that often seems to have been ghostwritten by Carney, to “incentivize” pension funds to double their Canadian investments, to “mandate” investments at home, to “unlock” and “harness” the pool of capital that is allegedly doing nothing for Canada or the Canadian economy. “Bring Canada’s pensions funds back home,” it said.

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The real reason the funds do not focus more on Canada would be the same regulatory environment that deters foreign investors from investing in Canada. Canada is also a small economy that, by definition, does not have the economic scale to support the range of risks needed to keep a trillion-dollar pension fund safe and sound.