Canada’s largest pension fund is urging the country to diversify its economy and enhance its global competitiveness in response to the looming threat of U.S. tariffs. Edwin Cass, the chief investment officer of the Canada Pension Plan Investment Board (CPPIB), highlighted the need for Canada to position itself more strategically after U.S. President Donald Trump announced the implementation of 25% tariffs on Canada and Mexico, set to take effect imminently.
Speaking at the Australian Financial Review Business Summit in Sydney on Tuesday, Cass emphasized that Canada’s economic ties with the United States have long been close, a relationship that could be strained under the new tariff regime. “One of the things we obviously should have been doing in the past, and I think you’ll see going forward, is that we’ll try and diversify our economy a lot more and we’ll try and do some things to make it more competitive on the world stage,” he said.
In response to the tariff threat, both federal and provincial governments in Canada have already initiated plans to reduce internal trade barriers, Cass added.
With oversight of C$675 billion ($465.74 billion) in investments on behalf of 22 million Canadians, Cass acknowledged that while the U.S. administration’s aggressive policies could enhance productivity, they are likely to cause short-term economic disruptions. “There is a way that those combinations of policy levers can end up with a better result in the U.S., but it’s going to be a bumpy road,” he remarked, echoing President Trump’s own warnings of potential pain in the short term.
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