SYDNEY (Reuters) – Canada must diversify its economy and position itself as more competitive on the global stage if tariffs promised by U.S. President Donald Trump take effect, Canada’s biggest pension fund said on Tuesday.
Edwin Cass, chief investment officer of the Canada Pension Plan Investment Board, said his country’s economy was “tied at the hip” to the U.S. after Trump said on Monday 25% tariffs on Canada and Mexico would go into effect almost immediately.
“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,” Cass told the Australian Financial Review Business Summit in Sydney.
Canada’s federal and provincial governments had already started planning to lower trade barriers inside the country in response to the threat of U.S. tariffs, he added.
Cass, who oversees the investment of C$675 billion ($465.74 billion) on behalf of 22 million Canadians, said the Trump administration was apparently moving multiple policy levers at once to improve productivity and may succeed, but not without discomfort.
“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,” Cass told the conference, noting that Trump himself had warned his policies may bring short-term pain.
($1 = 1.4493 Canadian dollars)
(Reporting by Byron Kaye and Christine Chen; Editing by Nia Williams)
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