Prime Minister Mark Carney has gathered the biggest rainmakers from around the world to showcase the country’s major deals and projects at the Canada Investment Summit.
The pitch to the hundreds of CEOs, investors and wealth managers in attendance: Canada, with its vast natural resources, has plentiful opportunities for foreign capital to be put to good use.
So, what are those opportunities, especially on the backdrop of growing protectionism from Canada’s southern neighbour? Here is a running list of the major announcements that have come out of this week’s summit, plus the ones on the periphery.
From the summit
Nationwide internet network
Little detail has been shared about Mr. Carney’s announcement to finance a new internet network that he says would provide nationwide sovereign internet connectivity.
“We will reinvest the tens of billions of dollars of capital we raise into the infrastructure that Canada needs for the next generation,” Mr. Carney said as part of his opening remarks.
That will mean “helping to finance new nation-building infrastructure, including a sovereign broadband backbone that connects Canadians from coast to coast to coast, with more direct and secure links to Europe and Asia,” he said.
A broadband backbone is the high-capacity core of the internet network that carries traffic between cities and countries.
Private investment of major Canadian airports
Mr. Carney said the government would open opportunities for private investment in four of Canada’s largest airports, which are located in Vancouver, Calgary, Toronto and Montreal.
The government will retain ownership of land and assets, but seek private investment through long-term concessions to operate the airports. Mr. Carney said the capital raised through private investors will be reinvested into infrastructure, including regional airports.
The concession concept is a common approach to running airports in Europe, Asia and Australia. Outside investors run restaurants, stores and other passenger-facing elements in the airport. Governments typically maintain ownership of the land and assets, and regulate returns on essential services, such as baggage handling.
Productivity mega deduction
Mr. Carney announced a “productivity mega deduction” that lets companies immediately deduct 100 per cent of the cost of new investment across far more assets than previously allowed.
The existing suite of tax incentives let businesses write off the costs of new capital investment for about 15 per cent of assets right away, focusing on manufacturing and processing, clean energy, productivity and research investments.
The new mega deduction covers about 65 per cent of assets, including fibre-optic cable, mining property, oil and gas pipelines, software, computer equipment, aircraft and vehicles, patents, rail track, bridges and roads.
It also roughly cuts Canada’s marginal effective tax rate on new business investment in half, from 13 per cent to 6.4 per cent. The government says that is the lowest rate of any major advanced economy.
Periphery announcements
Bell Canada expanding data centre capacity
BCE Inc. announced it plans to quadruple the capacity of its artificial-intelligence data centre operations in Saskatchewan. The company has ambitions to provide up to 1.2 gigawatts of compute power across three new facilities in the province through a series of investments that could top $5-billion.
The expansion, proposed through a non-binding memorandum of understanding with the province, would build on the company’s current 300-megawatt project currently under construction in Sherwood, Sask., and will follow the same structure, where Bell will build the physical facility and arrange for power and internet connections. Commercial partners, meanwhile, will provide the compute technology.
Advanced tax rulings
At an event the day before the summit, Finance Minister François-Philippe Champagne announced a new federal measure to offer “advance tax rulings” for investments of $1-billion or more. That would give investors binding decisions on how Canadian tax law will apply on a transaction before they commit capital, giving them more certainty.
Brookfield-CPPIB’s $50-billion “Maple Fund”
The Canada Pension Plan Investment Board, a co-organizer of the summit, and Brookfield Asset Management Ltd. are jointly launching a $50-billion “Maple Fund” that will make major investments in infrastructure and key sectors in Canada, two sources told The Globe and Mail.
They said Brookfield and CPPIB will each put up as much as $25-billion over the next five years to make equity investments in sectors that Canada considers strategic, as well as critical infrastructure projects.
The Globe and Mail is not identifying the sources because they are not authorized to discuss the agreement publicly.
Other major pension funds earmark billions in investment
Some of Canada’s other big pension funds also announced billions of dollars they intend to invest ahead of the summit.
- Ontario Teachers’ Pension Plan announced that it’s aiming to invest an additional $10-billion in Canada by the end of 2027, increasing the size of its $100-billion domestic portfolio.
- The $321-billion Public Sector Pension Investment Board said it is aiming to increase its investments in the country by roughly one-third, from $72.4-billion to $100-billion, over the next few years.
- Sun Life Financial Inc. also announced an infrastructure investing initiative that seeks to deploy $5-billion over five years to “support Canada’s economic growth and resilience, while delivering long-term returns,” the company said in a statement.
Nearly $325-billion from the big five banks
Leading up to the summit, five of Canada’s biggest banks announced various amounts of capital each would commit to a wide range of industries:
- Toronto-Dominion Bank is committing $150-billion over five years in new lending, underwriting, advisory and other financing activities. Its focus is on five key sectors: including energy, critical minerals and resources, defence and aerospace, digital technology and artificial intelligence, and infrastructure.
- Bank of Nova Scotia is committing more than $100-billion to focus on sectors targeted by Canada’s Major Projects Office, and is launching an institute aimed at assessing the country’s long-term competitiveness.
- Bank of Montreal is deploying up to $70-billion in new capital over 10 years for sectors considered critical to Canada’s economy, including electricity, energy and transportation infrastructure, mining and critical minerals, AI computing, defence and security, and oil and gas.
- Canadian Imperial Bank of Commerce is committing $2-billion over five years to small- and medium-sized defence-related and dual-use businesses in Canada.
- Royal Bank of Canada is launching a $1.4-billion fund aimed at investing in Canadian technology companies.
Radical Ventures new fund for AI megadeals
Radical Ventures said it raised US$1-billion for a new fund, for which it’s targeting to raise a total of US$4-billion.
The VC, which is focused on AI companies, said it secured investments from PSPIP, CCPIB, Healthcare of Ontario Pension Plan, TD, CI Global Asset Management, OPSEU Pension Trust, and BMO.
Arlene Dickinson’s new agri-food fund
Entrepreneur-investor Arlene Dickinson launched a $500-million fund focused on financing Canadian food and agriculture companies that are targeting markets in Southeast Asia.
Farm Credit Canada is a limited partner, committing $150-million from a separate, $1-billion fund. Dickinson, the general partner, told The Globe in an e-mail that she is looking for international and Canadian investors to contribute the remaining funds.
Carlyle ups its stake in Canadian oil patch
Carlyle Group-backed Avenrock Energy Inc. said on Monday it agreed to buy Parallax Energy Operating Inc. The deal gives it a 75-per-cent operating interest in light oil assets in the East Shale Duvernay in Alberta.
Avenrock did not provide a value for the transaction, though a source with knowledge of the deal said Parallax’s enterprise value was about $1-billion. Gross production from the assets is roughly 20,000 barrels of oil equivalent a day, with 85 per cent made up of oil and natural gas liquids.
The Globe and Mail is not identifying the person as they are not authorized to discuss the details of the transaction.
These assets were not among those listed in a prospectus of mostly infrastructure projects for Ottawa’s investment summit, though Carlyle is participant in the event.
Power Sustainable’s $10-billion investment
Montreal-based Power Sustainable plans to channel at least $10-billion into Canadian infrastructure and companies over the next five years. The sustainability-focused asset manager, a subsidiary of financial services giant Power Corp. of Canada, plans to invest from its own funds, draw in capital from co-investors, and tap debt markets to finance a growing pipeline of potential projects.
Meeting the $10-billion target would roughly double Power Sustainable’s total investing activity since it launched its first energy infrastructure strategy in 2021.
