Kitco News - Canadian pension funds should support their homegrown resource sector, argues mining legends Frank Giustra and Pierre Lassonde.
Giustra is chief executive officer of Fiore Group, and Lassonde is chair emeritus of Franco Nevada. Monday, the two published a commentary in The Globe And Mail arguing that Canada's big pension funds should do more to support the sector.
The resource sector is unable to advance significant projects, and large miners are starting to exit Canada, argues Giustra and Lassonde. The resource sector will continue to slide unless more investment is made.
"The solution lies in our Canadian pension funds – dubbed the Maple 8 – representing 35 per cent of all Canadian savings. Canadian investments do not just affect pension portfolios. They also have a considerable impact on Canada’s economy, generating jobs, improving incomes, and increasing contributions to retirement plans.
"Given their long-term approach to investments, Canadian pension funds should look more deeply into Canada’s resource sector," writes Giustra and Lassonde.
The two-point to the examples of China and the U.S. China has heavily subsidized state champions and secured its mineral and energy needs, writes the two.
"While the rest of the world wasn’t paying much attention over the past two decades, China, always playing the long game, made significant inroads throughout the world."
The U.S. has its Inflation Reduction Act, which has invested in a number of critical mineral projects.
"Seemingly overnight, it’s as if the world awakened to the reality that securing these minerals has become a matter of national security. With the added challenges of deglobalization and the balkanization of supply chains, resource nationalism is rearing its ugly head, and battle lines are being drawn.
"Canada needs to stop being a wallflower, waiting for an invitation to the party. We must get ourselves onto the dance floor, and our very own pension funds should make for suitable dance partners."