Canadian pension funds invested $2.6 billion in the Asia-Pacific region in 2023, according to a new report by the Asia Pacific Foundation of Canada.
It found that between 2003 and 2023, roughly 30 per cent of all Canadian investment flows in the Asia-Pacific region were made by pension funds, noting investment flows began growing in the early 2010s, peaked in 2021 at $22 billion and then started to decline. By 2022, investments in the region reached about $8 billion.
More than 50 per cent of investment in Australia between 2019 and 2023 was by Canadian pension funds, while investments by Canadian pension funds in China have decreased over time. Between 2003 and 2018, China saw 19 per cent of its total investment come from Canadian pension funds; however, between 2019 and 2023, these allocations only accounted for three per cent of the total investment amount. Investment flows in China declined from $627 million in 2020 to $423 million in 2021.
While Canadian pension funds decreased investments in China, they increased investments in India. Despite tensions between the governments of Canada and India reaching a tipping point in September 2023, investment by Canadian pension funds increased from $28 million in the third quarter of 2023 to $111 million in the fourth quarter.
More than half (57 per cent) of Canadian investments in India between 2003 and 2023 went to the real estate, financial services and industrial transportation sectors. As well, infrastructure and renewable energy have become more attractive for investors lately thanks to expansion supported by plans and policies from India’s national and regional governments, said the report.
“Canadian pension funds’ investments in the Asia-Pacific have been increasing, in large part to benefit from the region’s rapid economic growth,” the report said.
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