Toronto, Canada – A veteran wealth management executive in Canada is urging the country’s largest pension plans to increase their domestic investments to protect institutions like the Toronto Stock Exchange. Peter Letko of Letko Brosseau highlighted the impact of low investment levels from Canadian pension funds on the nation’s economic and financial health in a recent interview.
Letko emphasized the importance of controlling and directing capital to benefit Canadians as a whole to prevent the potential decline of the Toronto Stock Exchange (TSX) and other Canadian exchanges. He expressed concerns that without greater involvement from the largest savings pool in Canada, the significance of the exchange could diminish over time.
In an effort to address this issue, Letko and his firm penned an open letter to Finance Minister Chrystia Freeland and provincial leaders, advocating for changes to pension fund regulations to encourage more investments within Canada. The letter, supported by signatures from numerous business leaders, highlighted the decline in Canadian companies’ ownership by pension funds over the years.
The letter underscored that Canada’s pension funds have reduced their investments in domestic companies significantly, with more funds allocated to international markets such as China. Letko acknowledged the benefits of global investing but stressed the negative impact of limited investments in Canadian companies on overall returns.
Despite his support for global investment opportunities, Letko believes that there is not enough focus on investing in Canada. He pointed out that historically, Canada has been a favorable country for both institutional and private investors, offering strong returns compared to other G7 nations.
Letko emphasized the growth potential of Canadian companies that are currently overlooked by major pension funds, stressing the importance of directing capital back into the country for the benefit of all Canadians. He hopes that increased domestic investments will not only strengthen Canada’s economy but also preserve the integrity of its financial markets.