Toronto-Dominion Bank TD-T -0.10%decrease is committing $150-billion over five years in new lending, underwriting, advisory and other financing activities aimed at driving growth across sectors that are essential to boosting Canada’s economy.
The country’s biggest banks have been launching initiatives – ahead of Ottawa’s investment summit this week – to provide capital for Canadian companies as the federal government attempts to reduce economic dependence on the United States.
TD’s initiative focuses on five key sectors the bank believes will drive economic growth, including energy, critical minerals and resources, defence and aerospace, digital technology and artificial intelligence, and infrastructure.
For potential projects, TD listed clean and conventional energy, exploration and extraction of resources, aerospace supply chains, AI innovation and commercialization, and ports and trade corridors, among others.
TD said it already has subject-matter experts in these areas and is adding capacity and talent as it expands in these sectors. But partnerships with government and investors will be necessary to make progress on key projects.
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“For the supercycle to take effect, it’s more than just the capital of the banks,” TD chief executive officer Raymond Chun said in an interview.
“It’s about how do you make sure you get the investors and the opportunities linked together, the work that has to get done with government, and then the subject-matter experts from the banking side, and certainly our funding – all of that needs co-ordination and to be brought together.”
The Canadian economy could launch an investment “supercycle” if certain steps are taken, including increasing the competitiveness of the country’s tax and regulatory systems, according to a recent report by TD.
It estimates that $1-trillion in new investments across more than 300 projects is already approved or being considered through 2035 across five key sectors of the economy.
TD examined those 300 projects and identified the five sectors where the bank believes it can provide additional financial support through lending, underwriting, advisory services, equity and debt capital markets and other opportunities, Mr. Chun said.
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He said foreign investors attending the Canada Investment Summit will be looking for projects progressing at greater speed. He added that reducing regulatory and tax complexities and improving access to skilled labour will be key to attracting investments.
“At the speed and the quantity of the deals and opportunities that are there, you’re going to need skilled labour,” Mr. Chun said.
“We need to make sure as a country that not only are we nurturing and retaining, but we’re enabling skilled labour to go coast to coast and apply their skills and trades. That’s not as easy as it should be inside of Canada.”
As part of the bank’s financing commitment, TD plans to invest in programs that help companies adapt and scale. It has expanded its small and commercial business unit by hiring more than 800 staff and expanding its local teams in regions across the country.
The bank also intends to invest in programs and partnerships to develop skills critical to growing sectors of the economy and in initiatives to boost AI literacy, digital capability and entrepreneurship.
TD’s financing program is one in a series of moves by Canadian banks to introduce new measures to invest in domestic businesses.
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Over the past year, Canada’s banks have faced persistent calls to boost lending for small- and medium-sized business, while pension funds have been urged to increase investments in the country.
Canadian banks, analysts and industry researchers called on the Office of the Superintendent of Financial Institutions to free up lending capacity.
In June, OSFI reduced the amount of capital the country’s biggest banks must hold, freeing up billions of dollars to boost lending as Ottawa looks to attract greater private financing for high-growth sectors.
Earlier Monday, Bank of Nova Scotia committed more than $100-billion to help scale Canadian businesses and launched an institute led by a former ambassador to examine the country’s long-term competitiveness.
Royal Bank of Canada launched a $1.4-billion fund aimed at investing in Canadian technology companies, including aerospace and dual-use defence businesses.
Bank of Montreal said it will deploy up to $70-billion in new capital over 10 years for key sectors.
Canadian Imperial Bank of Commerce committed $2-billion over five years for small- and medium-sized defence-related and dual-use businesses.
