The head of the $714.7 billion investment arm of the Canada Pension Plan (CPP) says he sees opportunity in large-scale domestic infrastructure projects proposed by Prime Minister Mark Carney.
John Graham told The Canadian Press this week there could be value in giant infrastructure projects like bridges and pipelines for the millions of Canadians invested in the public workplace pension.
“We think that there may be the will to actually build some of these things,” he said.
Investing for Canada by investing in Canada
The comments come as Canada moves to decrease its economic reliance on the United States, stoke the domestic economy, and strengthen ties with the rest world.
The move by the CPP Investment Board (CPPIB) to increase its stake in Canada would be a reversal of a decades-long push to diversify beyond Canada.
Canadian public equities account for under three per cent of global equities and two-thirds of that tiny sliver are tied to the resource and finance sectors. Investing too much in Canada concentrates risk and blocks opportunity in the remaining 97 per cent of the world.
As of March 31, 47 per cent of the fund remained invested in the U.S. compared with 12 per cent in Canada. 19 per cent was invested in Europe, 17 per cent in the Asia Pacific region and five per cent in Latin America.
Holdings are further diversified among asset classes and sectors.
Diversification pays off for investors
The comments from John Graham come as CPP Investments reported a net return of 9.3 per cent for its latest fiscal year - a bit short of its benchmark return of 10.9 per cent.
The biggest gains came from public equities in the U.S. and China despite the threat of a global trade war.
Results also got a boost from a weak loonie in relation to other currencies when foreign gains are converted to Canadian dollars.
By any standard, long-term performance has been stellar. In its May 2025 report, state-run investment fund tracker Global SWF ranked CPP Investments second among 25 global pension funds for 10-year returns from 2015 to 2024 with an average annual return of 9.2 per cent.
Only Sweden’s AP7 pension ranked higher.
In a 2012 report, the Office of the Chief Actuary of Canada estimated the CPP investment fund would only need a real rate of return of four per cent annually until 2087 to sustain the entire plan at the current contribution rate.
How much Canada is too much Canada?
On one hand, investing Canadian retirement dollars in Canadian infrastructure and the Canadian economy seems like a win-win. But if geographic diversification is the key to bigger returns and less risk, over-investment in Canada could compromise future returns.
That really depends on how much Canada the CPPIB is prepared to take on.
Canadian investment industry groups have suggested preferential tax treatment to encourage domestic investments. Up until the 1990s registered retirement saving plans (RRSPs) were restricted from holding more than twenty per cent of assets outside Canada.
There’s a risk politics and patriotism could take priority over sound investment decisions, but one guardrail is the fact that the CPP is a crown corporation and not a sovereign wealth fund. Technically, it operates at arm’s length from the government and solely manages contributions paid by workers and employers, not public funds.
What it means for your retirement portfolio
In most cases, CPP benefits are intended as a supplement to other retirement savings like RRSPs and company pensions. In 2025 the maximum annual payout at age 65 is $17,200 but few Canadians actually reach that amount.
Individual benefits are calculated based on the amount contributed, average earnings throughout your working life, and the age you start collecting.
One big bonus is that CPP benefits are adjusted to the cost of living and that creates an inflation hedge most pensions don’t have.
