Carney gambles on the world's biggest investors betting on Canada

**Carney bets on the world’s biggest investors backing Canada**

It has been just over 18 months since Canadian Prime Minister Mark Carney declared that his country’s relationship with the United States, built on more than a century of close economic and military cooperation, was "over".

Collapsed trade negotiations, retaliatory tariffs, and Donald Trump’s remarks about turning Canada into the "51st state" have all intensified this bitter dispute between the two North American neighbours.

Now, as Canada’s chief promoter, Carney is trying to use the personal ties he built during his years in the upper ranks of global finance to persuade some of the world’s richest asset managers and business leaders to place their money on his country.

For two days, Toronto will welcome more than 100 global investors managing over C$100tn ($72tn; £53) in assets, in the hope that fresh economic ties will help Canada cope with a more unstable geopolitical environment.

"Canada has what the world wants," Carney said ahead of this "first of its kind" investment summit.

On Monday and Tuesday, a luxury hotel will receive guests from major sovereign wealth funds from around the world - including the United Arab Emirates and Norway - along with chief executives from major finance firms, such as BlackRock’s Larry Fink and Blackstone president Jon Gray.

There, Carney plans to sell them on Canada’s energy and resource industries, as well as the country’s political stability, in hopes of drawing investment into AI, defence, transportation, and infrastructure projects nationwide.

This is part of a plan to create a "more independent, more resilient economy" in Canada following the tariff war with the US, which has intensified in recent weeks.

But there is no certainty that these deep-pocketed investors will be easy to convince, and obstacles include Canada’s history of lengthy project approvals.

A recent report from the Canada Pension Plan Investment Board, which will co-host the summit, warned that the scale and depth of investible opportunity is the country’s biggest weakness.

"Global capital is looking for opportunity, but opportunity alone does not make a market investible," said Naomi Powell, director of the CPP Investments Insight Institute.

Although moving away from its closest business partner will be a test for Carney, the former central banker has a contact book filled with some of the world’s biggest business leaders and is on first-name terms with many of them.

"These were personal invites in many cases, literally," said Goldy Hyder, president and chief executive of the Business Council of Canada.

"It’s not a group of politicians inviting financiers, it’s a group of former financiers and investment people inviting their former buddies," added Miville Tremblay, who worked with Carney for several years at the Bank of Canada and saw his abilities during the 2008 global financial crisis.

"He was way above everyone," he said. "He understands finance very deeply. [He] would know when they are bluffing and when the understatement meant that something really bad was happening."

Understanding investors’ thinking gives the prime minister, who started his career at investment bank Goldman Sachs, an edge this week.

Carney is banking on his background to strengthen Canada’s economic future, though there is little doubt that Canada would suffer most from any lasting break with the US, the world’s largest economy.

Tremblay said Canada seeking foreign investment was nothing new, but the sales pitch to major corporations has changed.

For the last 25 years, Canada’s trade ministers used its closeness to the US as a selling point, telling foreign investors they should "invest in Canada because you’ve got an easy access to the US market", Tremblay said.

"This line doesn’t work anymore."

As the US-Canada trade war continues, many think there will eventually be a point when both sides return to the negotiating table.

Bradley Saunders, North America economist at Capital Economist, said securing the future of the trade deal was the "really important thing" for Carney to accomplish in the longer term.

"Trade exports to the US are worth 20% of Canada’s GDP - that’s one of the highest rates in terms of bilateral trade between any two countries in the world.

"If Carney wants to attract long-term investment... he wants this to go well, he has to try and provide a stable environment - and that won’t come until Canada has a certain trading relationship with the US."

Tremblay added that even if Canada reduced its trade with the US over the longer term, it was clear "they’ll have to sit down and make a compromise".

Hyder warned that investors will want Carney to show he can remove other barriers to investment, including making sure indigenous communities and provinces - which can slow or stop major resource projects - support the proposals.

Tremblay said the pitch must be "Canada has stuff that the world needs" - which is exactly the wording Carney has chosen.

Unless a deal was already being negotiated with another country, however, he believes it is unlikely that any major announcements will be made. He said that while overseas investment will be a key goal, encouraging more domestic investment from Canada’s largest pension funds, which currently invest more abroad, is also important.

Tremblay added that the current turbulent economic and political climate is ideal for his former boss. "He’s a crisis manager. He managed the financial crisis, he managed Brexit, and now he’s got a super crisis for Canada."

Carney has made clear that the path ahead for Canada as it moves away from its dependence on the US will be difficult.

So far, most Canadians support his approach, despite some criticism that he is moving away from climate commitments and toward closer ties with countries like Saudi Arabia and China as he promotes Canada’s abundant resources.

Still, Drew Fagan, a professor at the University of Toronto’s Munk School of Global Affairs, says the challenge for the prime minister is that the current split with the US is unfolding faster than the time needed to develop and build new global trade partnerships.

"And in the interim, that’s where the valley of death is for him, both economically and potentially politically," he said.