Key Takeaways
- Executives at four of the largest global money managers see a major opportunity to deploy more capital in Canada, but said execution is the key.
- Canada’s low-cost energy can become a powerful AI investment advantage, they said.
- They argued that achieving the best results depends on changing Canada’s regulatory environment.
Executives from four major global money managers see Canada as a “sleeping giant” with its resources, talent, and capital market depth. But the country must move faster to turn that potential into projects and global interest into investment, they said.
That was the central message from a panel discussion at the inaugural edition of Canada Investment Summit in Toronto on Tuesday, aimed at attracting C$1 trillion over the next five years. The panel featured Larry Fink, chairman and chief executive officer at BlackRock; Jon Gray, president and chief operating officer at Blackstone; Annette Mosman, chairman and chief executive officer at APG; and Dilhan Pillay Sandrasegara, chief executive officer at Temasek Holdings. Together, the four companies oversee roughly C$25 trillion in assets.
Their sentiment was broadly bullish on Canada, but it came with a caveat: Global capital has choices. On the plus side, Canada’s political stability, rule of law, natural resources, energy, and highly skilled workforce give it a solid foundation, they said. But policy roadblocks have prevented the country from fully capitalizing on these advantages.
“Canada is a sleeping giant economically,” said Blackstone’s Gray. However, with a decade or more of regulation permitting and taxation, “people didn’t think about the cumulative impact,” he added.
“We’re now at a moment where Canada is really focused on its economic independence,” Gray said. “We’re hearing that we’re going to unleash Canada, speed up the permitting, look at regulation, look at taxation, so [global investors] can invest here more easily.”
Infrastructure and Artificial Intelligence Are Key Opportunities
Infrastructure is one of Canada’s biggest opportunities, panel members said, particularly as the global economy undergoes a massive buildout in energy and artificial intelligence.
Gray said Canada’s critical minerals, natural gas, and hydropower place the country in a strong position to benefit from the AI investment cycle. The country also has abundant land and relatively inexpensive energy that could support the expansion of data centers.
“There’s an enormous need for this physical infrastructure from things in the natural world,” he said. “Canada lines up in almost a perfect spot for all of that, [but] you need private capital.”
He added that Canada is well positioned to use “some of its low-cost available energy and build data centers in cooler climates and abundant land.”
Regulatory Hurdles Need Removal
While highlighting Canada’s potential, panel members stressed the need for better regulation to help infrastructure projects move along faster.
Blackstone’s Gray cited the example of a hydropower transmission line linking Quebec to New York City, which took 16 years to build. “Everyone would have said this is an amazing project, clean energy, win-win, and yet because of regulation on both sides, this took forever,” he said.
When it comes to the importance of the AI infrastructure buildout, BlackRock’s Fink said best practices need to be clearly defined to help speed progress in order for the benefits to be broadly distributed.
“The delays in the buildout of AI are only going to make AI the domain of large firms,” Fink said. “We have shortages of chips and memory, and as these shortages continue, [it becomes] very expensive to build out AI. The faster we can build out more capacity, the more we can democratize and make it available for everyone.”
Canada’s Advantages
The Dutch and Singaporean institutional investors on the panel cited Canada’s institutional maturity as a major differentiator when derisking their global portfolios.
“If you look at geopolitical risks, we are revisiting our portfolios,” said Mosman, the chairman and CEO at APG, a Dutch pension investor. “What makes Canada very interesting for us is we’re like-minded, but also its political stability. It’s about the rule of law, [and Canada’s] great institutions.”
Canada’s talent pool was highlighted as another attractive feature for global investors. Sandrasegara, CEO at Temasek Holdings, a Singapore-based investment firm, stressed the need for local growth financing to ensure Canadian-born technologies scale domestically rather than looking elsewhere.
“There’s a lot of innovation in Canada, especially with startups,” Sandrasegara said. “The problem with those businesses is, if you don’t have capital to scale, they migrate to the United States. That’s the biggest thing that we face.”
The question for Canadian authorities to consider is “how to decide to build businesses for the long term for investors in a way where we can put permanent capital to work in an economy, taking advantage of what there is in that economy, and there’s a lot going for Canada,” he added.
