Some of Canada’s largest financial institutions have unveiled major capital commitments in defence, energy, technology and infrastructure this week, ahead of Prime Minister Mark Carney’s Canada Investment Summit next week, which is set to bring together global investors, Canadian executives and public-sector officials.
The wave of announcements follows a decision by Canada’s top banking regulator in June to lower the capital buffer requirements for the country’s Big Six banks, freeing up billions of dollars that analysts expect will help fund large national projects in the years ahead.
John Aiken, an analyst at Jefferies Inc., said in a note on Wednesday that the key question for investors is whether Canada can turn more than $1 trillion in ambition, available capital and policy support into projects that actually get built and generate lasting returns for the private sector. Aiken said he expects the summit to offer more detail on how the federal government intends to achieve its goals.
Bank of Montreal said on Friday it intends to mobilize up to $70 billion in new capital over the next decade. Chief executive Darryl White said in a statement that building Canada has always relied on bold ideas backed by capital, and described the current opportunities in key economic sectors as the next chapter in that story.
Canadian Imperial Bank of Commerce announced a $2-billion commitment on Thursday aimed at helping small and mid-sized defence-related businesses grow, including firms working in energy, cybersecurity, digital capability, infrastructure and advanced technology. Susan Rimmer, CIBC’s head of commercial banking, said the bank is bringing together funding, sector expertise, market access and strategic connections to support Canadian companies in the defence and resiliency space.
Royal Bank of Canada earlier in the week announced a $1.4-billion initiative to invest directly in Canadian technology companies with the potential to grow into global players. Chief executive Dave McKay said the bank’s ambition is for more of the world’s next major companies to be built and remain in Canada, noting that homegrown entrepreneurs and tech talent have often been drawn elsewhere once ready to scale.
Bank of Nova Scotia published a framework on Tuesday that would allow it to issue Canadian defence bonds to support companies in the sector. Brandon Konigsberg, the bank’s executive vice-president, said the framework is meant to bring discipline and transparency to the capital the bank deploys in support of Canada’s security and industrial capacity.
Canada’s large pension funds also made announcements this week. The Public Sector Pension Investment Board said Thursday it expects to increase its domestic investments by 30 to 40 per cent over the next few years, pushing its total assets invested in Canada above $100 billion. Chief executive Deb Orida said the target reflects both a more uncertain global environment and new opportunities within the country.
Ontario Teachers’ Pension Plan Board said Friday it plans to invest an additional $10 billion by the end of 2027 in Canadian public and private investments. Chief executive Jo Taylor said Canada has a strong role to play in a global investment portfolio, noting that about a third of the fund’s holdings are already in the country.
Sun Life Financial Inc. also said Friday it would deploy $5 billion over five years toward investments supporting Canada’s economic growth and resilience, including projects tied to digital technology, energy, and transportation and logistics infrastructure.
This article is for informational purposes only and does not constitute financial, investment, or legal advice. Consult a licensed financial advisor before making investment decisions.
This article references reporting from: