Is three percent too much to ask?
Playing catch-up after a busy two weeks in Canadian tech, I find myself returning to commentary from Prime Minister Mark Carney made during the inaugural Canada Investment Summit. Answering a question on mechanisms to ensure Canadians maintain stakes in the investment projects on offer, Carney added that the feds didn’t—and shouldn’t—want to direct or compel Canadian pension funds to participate.
“We want to create the conditions where those institutions … want to invest and compete with each other to invest in Canada,” he said.
Pension fund participation has been a hot topic over the last two years. Given the nearly $500 billion in capital commitments for Canadian investment (including from OTPP and CPPIB) coming out of the summit, plus an additional $10 billion from OMERS earlier this year, it now appears moot.
But a new report from policy think-tank the Canadian Shield Institute won’t let it die. Released this week, the report notes that pension funds have steadily been shifting away from Canadian investment this century. When they do invest, it’s mostly in real estate and infrastructure.
Canadian Shield recommends that pension funds be mandated to allocate three percent of their assets under management to invest in Canadian growth companies. Phased in over 10 years, that’s roughly $7 billion in new capital annually—the near equivalent of all venture capital investment in Canada in 2025.
How such a mandate would be implemented really matters (the report has more details), but so is what we ask and expect from these funds. The argument that pension funds are not sovereign wealth funds, and that the expected returns for Canadians should not be futzed with, is well taken. The report’s response? “The pension funds are creatures of public policy; the government can choose to change their mandate.”
Right now, our prime minister seems unwilling. Tell me what you think.
Douglas Soltys,
Editor-in-Chief
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Top stories from BetaKit
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Elevate transformed into the Nrth Festival this week in Toronto with a surprise opening-night rebrand. The kickoff event prompted leaders from Cohere, TD, Kids Help Phone, and DuckDuckGo to discuss bringing human control back to tech, while Toronto Raptors legend Kyle Lowry capped off the night encouraging entrepreneurs to believe in themselves.
The next day, Waabi COO Lior Ron said his company’s autonomous trucks are ready to be deployed, with full North American deployment within five years. Across the street on the Moonshots stage, leaders from Carbonyx and Destiny Copper laid out the value of investing in cleantech to sustainably shore up critical mineral supply chains.
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Deals and Dollars
Who cashed in, or out, this week:
- Kanin Energy raised $138 million for its waste-heat-to-power development. (Calgary)
- The Government of Canada gave Mitacs $162 million for an AI internship program targeting SMBs. (Toronto)
- Altis Labs raised $25 million USD to expand its AI platform for cancer trials. (Toronto)
- Blair Health secured $4.2 million to make specialized women’s care more accessible. (Toronto)
- Beacon Software bought New York-based Haize Labs to boost AI reliability across its portfolio. (Toronto)
- TD Bank invested $25 million into a strategic collaboration between Cohere and Layer 6. (Toronto)
- Fertility support platform Bird&Be raised $13 million USD amid rapid growth. (Toronto)
- Astrus closed $12 million USD to automate one of the biggest bottlenecks in chip design. (Kitchener-Waterloo)
- Supply chain software startup Axya secured $17 million in equity and debt. (Montréal)
Data point
Read more in The Globe and Mail.
The refresh
Jensen vs Geoffrey
Nvidia CEO Jensen Huang made his disagreements with Geoffrey Hinton public on The Ezra Klein Show this week, calling the AI pioneer’s warnings “irresponsible.” If you want to hear the Canadian’s perspective, Hinton joined Radio Atlantic the following day to preach caution, comparing AI development to Oppenheimer and the atom bomb.
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BetaKit Podcast · Sept 27
“I think—and I hope I’m right—that we can build the next OpenAI, or Anthropic, or world model here in Canada.”
Mila entrepreneur-in-residence Alex Shee joins to explain the cultural shift among academic institutions toward supporting the entrepreneurial journeys of locally trained AI scientists and the “generational opportunity” it could create for Canada. Watch/Listen now ›
See you in your inbox next week. Contributors: Alex Riehl (Ottawa staff writer), Douglas Soltys (editor in chief), Trevor Nichols (web editor).
Feature image courtesy OMERS Private Equity.