At the World Economic Forum in Davos in 2026, Prime Minister Mark Carney expressly cited Canada’s pension system as a worldwide benchmark. He highlighted how the durability of these funds originates from disciplined diversification, patient capital, and the ability to absorb shocks that destabilize other institutions. Canada’s public pension schemes are frequently referred to as “quiet giants.” They rarely make headlines, but they are at the heart of Canada’s long-term economic stability. Funds such as the Canada Pension Plan Investment Board, the Ontario Teachers’ Pension Plan, and the Public Sector Pension Investment Board are largely considered among the world’s most reliable and sophisticated investors. This reputation, however, does not imply immunity from the geopolitical shifts in the Indo-Pacific.
CPP Investments alone controls over 700 billion Canadian dollars in assets, with significant exposure to Asia-Pacific markets. South Korea represents a distinct type of exposure. CPP Investments has invested billions of dollars in Korean data centers, renewable energy platforms, and logistical infrastructure, including significant stakes in hyperscale data facilities near Seoul and large-scale wind farm projects off the southern coast. These assets are well suited for long-term digital demand and industrial upgrading. However, Korea’s domestic politics are becoming more polarized. The 2022 labor strikes in the auto and public transportation sectors demonstrated rising labor unrest. Presidential elections in March 2027 promise more policy changes as candidates debate economic protectionism and industrial strategy. Technology and data infrastructure are increasingly being viewed as national security priorities. This is seen in Seoul’s 2023 proposal to tighten data localization and security standards for foreign cloud providers, as well as enhanced state monitoring of crucial tech supply chains. For Canadian pension funds, the mix of political volatility and increased regulatory scrutiny adds an extra layer of risk to Canadian capital.
India has emerged as one of the most rapidly rising destinations for Canadian institutional capital. CPP and Ontario Teachers both have significant investments in Indian toll roads such as the Mumbai-Pune Expressway, airport services in Delhi and Bengaluru, and industrial corridors through the BharatMala Programme. The appeal is clear. India delivers scale and government-funded infrastructure development. However, the results have been unequal. Canadian investments in India face regulatory uncertainties around power purchase agreements, land acquisition issues in areas such as Punjab and Rajasthan, and tightening requirements for foreign direct investment. National elections in 2024 strengthened political continuity, but state elections continue to result in policy fragmentation. Pension funds that invest in sub-national infrastructure assets are indirectly subject to local political turbulence, as well as national stability. CPP’s exit from Delhivery after years of holding the stake reflected how India’s logistics sector faced weaker-than-expected profitability and slower valuation growth, limiting returns despite the market’s headline expansion.
Southeast Asia presents the most complex risk. Canadian pension funds have invested in Indonesian ports linked to the nickel and EV supply chains. They also own energy and industrial assets in Vietnam. They have experience in real estate and financial services in Singapore, which remains the region’s safest legal hub. Indonesia has attracted special attention due to its size. Canada is also negotiating a bilateral trade pact with Jakarta. However, the regulatory climate in Indonesia is subject to rapid change. Jakarta’s ban on nickel exports in 2020 shocked global supply chains and international investors. Since then, the administration has continually tightened domestic processing standards while indicating that downstream control is a goal. These actions are significant because they have a direct impact on the profitability of ports, transportation corridors, and industrial infrastructure associated with mining and processing. A future Indonesian government could pursue this further under the pretext of “resource sovereignty.” It may increase state control over mining, energy, and transportation. Thailand and Malaysia offer an extra layer of uncertainty. Thailand’s political system has gone through multiple cycles of civilian government, military control, and court intervention. This has regularly caused delays in long-term infrastructure decisions. Malaysia has experienced regular coalition swaps since 2018. These reforms have frequently reopened discussions over infrastructure contracts and the role of state-owned companies. Hence, this may mean long term instability in securing Canada’s pensions.
These are not abstract risks. Canadian pension funds have already experienced periods of underperformance coinciding with geopolitical and economic shocks in the Indo-Pacific. The Ontario Teachers’ Pension Plan, for example, reported a 1.9% return in 2023, with the fund citing difficulty in real estate and infrastructure prices as increased global interest rates impacted long-term assets. That is significant because many Indo-Pacific investments are centered in precisely those industries. Large Canadian funds have reduced fresh emerging-market commitments in recent years, citing increased geopolitical risk and lower risk-adjusted returns. As global interest rates increased, funds like CPP were compelled to write down holdings that appeared appealing in a low-rate environment but became way less profitable under tighter global financial circumstances.
At the same time, Canadian pension funds remain heavily concentrated in the United States. In CPP Investments’ most recent reporting, the U.S. accounts for about 47 per cent of its geographic exposure, making it the single largest destination for Canadian retirement capital. This has delivered strong returns, especially through American technology. But it also creates systemic exposure to U.S. political risk. The last few years have shown how quickly tariff politics and industrial policy can spill into markets. Diversifying into the Indo-Pacific is therefore not optional. The real question is where Canadian capital can go without a big risk of political volatility.
Canada’s trade and investment policy should match where pension capital is already placed. Japan and Australia are the clearest anchors. CPP and other funds have long held major real estate, infrastructure, and private equity positions in both markets. These are high-governance democracies with predictable courts and transparent regulations. Australia is also one of the few Indo-Pacific markets where pension funds can hold regulated utilities, ports, and energy assets with relatively low contract risk. Japan offers scale and stability, but election-driven nationalism and defence spending could introduce currency shifts, which matters for long-term assets.
Finally, Canada should invest more institutional capital in Indo-Pacific markets, where governance is improving and policy risk is decreasing. Vietnam is the best example. It has attracted big manufacturing relocations and consistently strengthened its investment framework, making it a more reliable destination for industrial and logistics assets than many competitors like China. In parallel, Canadian funds should take a closer look at renewable and climate-resilient infrastructure in smaller Indo-Pacific countries, where projects are backed by guarantees and clear long-term contracts.
Prime Minister Mark Carney’s evolving Indo-Pacific strategy is centered on diversification away from a single market and toward stronger regional economic and security relations.
Carney’s government has also pursued concrete partnerships that dovetail with pension capital interests. In Gyeongju, South Korea, Canada announced a new Canada–Republic of Korea Security and Defence Cooperation Partnership, deepening collaboration on defence, cyber, and industrial cooperation. This is where pension-backed infrastructure and investments stand to benefit from stronger bilateral relationship.
Canada’s pension system has built its global reputation for its diverse and intentional investments. Preserving that reputation in the Indo-Pacific in the next few decades would require a greater understanding that political geography is now as important as economic investments, especially as the Indo-Pacific region goes through a period of political unpredictability.
Photo: Indian Prime Minister, Shri Narendra Modi meeting the CEO of the Canada Pension Plan Investment Board, Mr. Mark Wiseman, in Toronto, Canada on April 16, 2015. Accessed via Wikipedia Commons. This image is a copyrighted work of the Government of India, licensed under the Government Open Data License – India (GODL).
Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.
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