Canadian Shield's 3% pension mandate would nearly match Canada's 2025 venture total every year

Spread evenly over a decade, the report's $7 billion a year ^[7] comes to about $70 billion of pension money in Canadian growth companies ^[1]. At 3% of assets under management ^[6], that implies a base of roughly $2.3 trillion ^[2].

BetaKit editor-in-chief Douglas Soltys wrote that after the summit, the question of pension participation "now appears moot" ^[10]. I think the pledges answer a different question. The report's complaint is about where the funds' domestic money goes. It finds most of it lands in real estate and infrastructure ^[5], and a commitment to either does not reach a growth-stage software company. BetaKit's account does not break the summit total down by asset class, and it does not name any minister or party backing the 3% figure.

Carney wants the funds to choose Canada on their own ^[1]. "We want to create the conditions where those institutions ... want to invest and compete with each other to invest in Canada," he said ^[2]. The report's response, as BetaKit quoted it, is blunter: "The pension funds are creatures of public policy; the government can choose to change their mandate" ^[9]. Soltys wrote that the argument "that pension funds are not sovereign wealth funds, and that the expected returns for Canadians should not be futzed with, is well taken" ^[11].

In my view the bigger risk to those returns is the entry price. Adding the mandate's flow each year would about double Canadian venture investment, if the investors behind the 2025 total kept their pace ^[4]. When money arrives faster than fundable companies do, valuations rise first. A fund required to deploy on a schedule is the buyer least able to wait for a better price. The counter-thesis is that Canadian companies are short of capital, not of quality. In that case new money produces new companies and prices hold.

Carney's position may simply hold, with the voluntary pledges counted as the answer. Soltys wrote that "Right now, our prime minister seems unwilling" ^[12]. If the 3% figure found a political sponsor, the think tank's number would be up against a stated government position in an actual policy fight ^[1]. My view that the question is still open would be wrong if the summit pledges turn out to include a meaningful share for growth companies.