26-05-2025
- Business
- Hamilton Spectator
Pensions ‘investing almost nothing' in Canadian tech
The big Canadian pension plans have not bought into 'Elbows Up' and 'Buy Canadian' sparked by U.S. President Donald Trump's tariffs, says a veteran tech investor.
'It is more important than ever that Canada own its innovation, I think it is a relatively simple change, the Minister of Finance could do it tomorrow,' said Chris Albinson, a venture capitalist and former CEO at Communitech.
Known collectively as The Maple 8, the big Canadian pension plans are a huge source of investment funds for American and Asian companies, said Albinson.
'The $2.7 trillion in pension assets collectively in the large Maple 8 pensions, 45 per cent of those dollars are invested in the U.S.,' he said in a recent interview.
The pensions in the U.S. invest about five per cent of their assets in American innovation, and two years ago the British government said the pension plans there need to invest five per cent in British innovation.
The Maple 8's investments in Canadian technology amount to about 0.5 per cent of their total investments, said Albinson.
'They are investing almost nothing in domestic innovation,' he said.
The Maple 8 group of pension plans includes the Alberta Investment Management Corporation (AIMCo), the British Columbia Investment Management Corporation (BCI), la Caisse de dépôt et placement du Québec (CDPQ), the Canadian Public Pension Investment Board (CPPIB), the Ontario Municipal Employees Retirement System (OMERS), Healthcare of Ontario Pension Plan (HOOPP), Ontario Teachers Pension Plan (OTPP) and Public Sector Pension Investment (PSP).
One of these funds, the CPP investment board, did not respond to a request for an interview.
During his long career in venture capital, Albinson raised billions for startups and scaleups. For 20 years he was based in Silicon Valley, and returned to Canada in 2021 when he became the CEO of Communitech. Shortly after arriving at Communitech, he launched the True North Fund that raised $2.8 billion in its first year — more venture capital than the previous 10 years combined for Communitech.
President Trump's threats against Canada's economy and territory need to be taken seriously, and the big pension funds should be part of Canada's push back, he said.
During 2024, the biggest venture capital deal was the $1.24 billion raised by B.C.-based Clio, a software maker for the legal sector. It was one of the biggest software fundraising rounds in Canadian history.
'There wasn't a single Canadian investor,' said Albinson.
Last year was a continuation of a decade-long trend.
'Over the last 10 years, 66 per cent of $40 billion that has been invested in our best companies has been U.S. investors,' said Albinson, citing numbers collected by the Canadian Venture Capital & Private Equity Association. 'Said differently, over the last decade we have sold 66 per cent of the ownership of our best companies to the U.S.'
Canada's tech sector has 86 companies generating at least $100 million annually. It has four, private, venture-backed companies generating $1 billion annually, and two of those are in Waterloo Region.
'It's awesome that we have all these high performing companies, and they are at scale, they are on the cusp of being these global champions to really drive the flywheel over, we just sold off control of those companies to the U.S. in the last decade,' said Albinson.
The one exception among the Maple 8 is la Caisse de dépôt et placement du Québec, which has a policy of investing in Quebec and Canadian tech. In 2022, the Caisse led one of the biggest funding rounds in the history of Waterloo Region tech, a $250 million investment in the cybersecurity Unicorn eSentire. The Caisse investment was the biggest part of a $325-million raise.
The U.S., U.K., Scandinavian countries and others require their pension plans to invest in their innovation economies. Canada has no such requirement.
'Every other G7 country invests five to six per cent of their pension assets in their future, in their innovation engines, to keep them rooted in the country,' said Albinson. 'We are the only one that doesn't, and it drives me mad.'
Canada Pension Plan Investment Board posted online its annual report for the last fiscal year that ended March 3. Investments generated a return of 9.3 per cent for fiscal year 2025. That $59.8-billion return is from investments in the U.S. (47 per cent), Europe (19 per cent), China and Asia (17 per cent), and Canada (12 per cent). It paid out more than $4 billion in fees and bonuses to external managers.
In 2005, Ottawa removed any requirements on pension plans to invest in Canadian tech or any other sector of the economy, said Matt Roberts, a Toronto-based investor. At the time, the pension lobby implied that Canadian companies would get about 45 per cent of all the investments from Canadian pension funds, but that did not happen, he said.
'I would like them to put more money into Canada and figure it out,' said Roberts, co-founder and general partner at CMD Capital. 'Find the best investments in Canada, and if it's venture capital, wonderful, if it's not, fine.'
The lack of investment in Canada by Canadian pension funds is hurting all sectors of the economy, he said, not just tech.
'When you send a dollar outside Canada you are losing the multiplier effect of that economic activity,' said Roberts.
Prime Minister Mark Carney's government should require minimum levels of investment in Canada by the Maple 8, he added. A preliminary report on the subject went to the federal cabinet last fall, but was never made public.
'We have more money in China through CPP than we have in Canada,' said Roberts. 'Most Canadians I don't think would be happy with that. I think Canadians now want to invest in Canada, the problem we have now is it requires significant change.'
