“’Buy Canada’ pressure builds on US$1.6 trillion in pension pot,” was the chilling headline to a Bloomberg News article this week, detailing the push to demand our public pension plans invest more in Canadian projects simply because they’re Canadian. That’s not a new argument by any means, and it doesn’t spell certain doom. Quebec’s Caisse de Dépôt has a mandate to invest in Quebec, and in the long term its returns reliably beat the “benchmark portfolio” — i.e., an index fund. (That said, in 2024 the Caisse lost more than $10 billion relative to that benchmark portfolio.)
But we live in Donald Trump’s world now — again. We are in a nationalist fever. Nerves are raw, passions are high, and unreasonable, strident and ultimately self-harming positions can start to look disturbingly attractive in the name of patriotism. Patriotism never justifies risking Canadians’ pensions on anything but what the people in charge think is the best return, and certainly not if contributions are mandatory.
In somewhat related news, the hits keep coming for Northvolt, the EV battery maker, which declared bankruptcy in its native Sweden on Wednesday, the largest bankruptcy in the country’s history, Swedish newspaper Dagens Industri reports. This comes roughly three months after the company filed for Chapter 11 protection in the United States, claiming US$30 million in cash against debt of US$5.8 billion.
The federal, Ontario and Quebec governments were falling all over themselves to hurl public money at EV plants, even as analysts warned of icebergs ahead
Northvolt has had its own unique problems. But in general, the EV market simply isn’t going where a lot of deep-pocketed investors thought it would go, or at least not as quickly. BMW cancelled a US$2.15 billion deal with Northvolt in June last year. Volvo, the only name in Swedish internal combustion, was formerly bullish on the EV revolution, pledging to produce only electric vehicles by 2030. It’s not quite so bullish anymore. “Customers and markets are moving at different speeds,” CEO Jim Rowan said in a statement in September.
Volvo has been owned by Chinese automotive conglomerate Geely since 2010, and has factories in China, meaning Volvo EVs — and Polestar EVs, a Geely-Volvo co-venture — are subject to severe tariffs. Those amount to 100 per cent levies in the U.S. and Canada alike, and Industry Minister François-Philippe Champagne told CTV News this week the government has no plans to back down on that.
The upshot to all this is that billions of taxpayer dollars are now up in the air. Quebec “invested” 2.9 billion in a controversial Northvolt EV project on Montreal’s South Shore, while the feds kicked in $4 billion in “investments” and other “incentives.” The Quebec government invested $270 million in the Swedish parent company as well. And then there is the small matter of our pensions.
The Caisse de Dépôt owned $200 million in the company’s convertible debt. Last month, it announced it had written that down to zero. Other Northvolt investors included the Ontario Municipal Employees Retirement System (which has written off a US$325-million investment), and the Investment Management Corp. of Ontario, a pension fund for retired public servants (which was in to the tune of US$400 million), Bloomberg reports.
Obviously not every investment a pension fund makes is going to come good, with or without a government directive to invest in certain ways. But the EV battery boom-and-potential-bust cycle is a perfect example of how such directives could go wrong: The federal, Ontario and Quebec governments were falling all over themselves to hurl public money at EV plants, even as analysts warned of icebergs dead ahead. The temptation for them to direct their pension plans in the same direction would be huge.
Combine that with the inchoate, reactionary nationalism Trump has unleashed in Canadians, and the urge it has activated in Canadian politicians to look the most patriotic, and the temptation might only become more compelling. We should be able to agree: Don’t politicize Canadians’ pensions.
National Post
[email protected]
Get more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what’s really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers. Sign up here.