CPP’s investment in Canada hits record low of 12% in 2025, sparking calls for policy review
According to the Canada Pension Plan Investment Board (CPPIB), only 12 percent of the CPP’s $714bn portfolio is invested in Canada — the lowest share recorded in its history — while exposure to US assets has reached 47 percent, the highest on record.
The shift has reignited concerns from policymakers and pension experts about the fund’s domestic economic role, geopolitical risks, and long-term mandate.
As reported by CBC News, the allocation to Canadian assets has declined steadily from 74 percent in 2005 to 12 percent in both 2024 and 2025, while US investments have grown from 12 percent in 2008 to 47 percent in 2025.
The CPPIB attributes this trend to strong market performance in the US.
“US stocks have gone up,” said Michel Leduc, head of public affairs and communications at CPPIB. “It’s just because we make good investments.”
But some say the imbalance raises strategic questions.
Former senior Finance Department official Susan Peterson, who helped build the modern Canada Pension Plan, said, “If Canadians knew out of the $714bn such a miniscule amount was invested in Canada, I think they would say, whoa, what’s wrong with this picture.”
As per CBC News, Liberal MP Karina Gould, chair of the House finance committee, said she is concerned about the low domestic share and indicated that committee hearings into the CPP’s investment strategy could begin in the fall.
“It is concerning,” she said, noting the need to explore whether the plan could more actively support Canada’s economy while still meeting its return objectives.
New Democratic Party finance critic Don Davies also called for a mandate review, telling CBC News, “There’s no shortage of projects that will strengthen our economy and also give good returns to workers and employers.”
The issue drew broader attention in March 2024 when Canadian executives signed an open letter to former Finance Minister Chrystia Freeland and provincial counterparts.
As reported by CBC News, the letter expressed concern about “the decline in Canadian investments by pension funds and its impact on the Canadian economy,” calling for reforms to encourage more domestic investment.
In response, the federal government appointed former Bank of Canada governor Stephen Poloz in April 2024 to assess how to stimulate more Canadian opportunities for pension funds.
The fall economic statement included proposals to ease investments in Canadian companies, public utilities, airports, and AI infrastructure.
However, Daniel Brosseau, co-founder of Letko Brosseau, remains sceptical.
He told CBC News that current proposals “will have no effect” unless they distinguish between foreign and domestic investments. He proposed taxing foreign income from pension plans to incentivize Canadian deployment.
CPP Investments maintains that its focus remains long-term. “We’re investing money for people who aren’t even born yet,” said Leduc.
“That long-term thinking must be the strongest pillar of how we think about our investment strategy.” At the same time, he added, the fund is not “short-term stupid” and continues to assess risk factors.
Concerns also extend to political risk.
According to CBC News, US tax reforms proposed under the Trump administration could impose new withholding taxes on foreign pension funds.
This could cost Canadians and Canadian companies billions, prompting some funds — including the Public Sector Pension Investment Board, which has 41 percent of its assets in the US — to reconsider their allocations.
The CPPIB’s foreign investment strategy diverges from that of Quebec’s Caisse de dépôt et placement, which operates under a dual mandate to generate returns and support Quebec’s economic development.
Senator Clément Gignac suggested a Senate review of how Canada’s major pension funds manage foreign exposure, warning of risks from geopolitics or hostile policy changes abroad.
Trish McAuliffe, president of the National Pensioners Federation, told CBC News that her members favour prudent and ethical investments, particularly in Canadian infrastructure and health care.
She confirmed the issue would be raised at the federation’s upcoming convention. “We’re hopeful… but make no mistake — people are watching.”
The CPPIB was created in the late 1990s following reforms led by then Finance Minister Paul Martin. It operates independently from government.
Previously, a foreign property rule capped non-Canadian investments at 10 percent — a limit lifted in 2005 by then Finance Minister Ralph Goodale.
Since then, foreign investment has steadily increased.
