Recent trade tensions, protectionist policies and geopolitical fragmentation are transforming markets. Perhaps more than ever before, Canadians are thinking critically about how their economic choices shape our country. From groceries to alcohol to kitchen cabinets, there is heightened awareness of where our goods and services come from, and who benefits when we buy them.
But what about the companies we invest in? Do we truly understand how they contribute to our economy and society? Many Canadians may not realize that several iconic brands with deep roots in our communities are now part of global enterprises. Does it matter?
Canada’s securities regulation is built on a disclosure-based system. As regulators, our role is to ensure companies provide investors with the details they need to make informed decisions. That means focusing on what’s called material information – basically, disclosure for which the omission or inclusion could reasonably influence an investor’s decision to buy, sell or hold a security.
As investor expectations evolve, there is growing interest in understanding how companies contribute to Canada’s economic and social fabric – information that may be increasingly viewed as material by investors who are seeking alignment with national or personal values. Many Canadians would want to know not just how a company performs, but how it supports the country they call home.
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International diversification has long been a smart strategy for Canadian investors. As a relatively small market with deep global ties – located next to the world’s largest and most liquid capital markets – Canada has naturally looked outward for investment opportunities. The long-term performance of the S&P 500 has reinforced this trend. It has been so strong that many Canadians haven’t paused to consider the broader impact of their investment decisions across the economic spectrum.
But Canada’s traditional economic partnerships are no longer guaranteed. We are in a new era, and securities regulators are thinking about how we can help make information reflecting a company’s contributions to Canada more easily accessible to investors.
While inclusion in the S&P/TSX Composite Index reflects a company’s legal headquarters, it may not fully capture its broader contributions to Canada’s competitiveness and resilience. There are meaningful ways to measure a company’s impact on the country’s prosperity using information already found in regulatory and corporate disclosures. Indicators might include job creation, research and development investment, capital expenditures, tax contributions and revenue generated within Canada.
Financial reporting broken down by jurisdiction is already required in financial statements filed in Canada and the United States, with specific requirements for disclosure of revenues attributed to the entity’s country of domicile, as well as revenues by key regions and other information, when material.
This approach – leveraging existing regulatory disclosures such as geographic revenue breakdowns, tax contributions and capital expenditures – could be used to measure the investments made in Canada by our largest institutional investors, including Canadian pension funds. It could also be used for other purposes, where the degree to which something is “made in Canada” needs to be measured.
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This information could be organized into a set of metrics forming the basis of a potential Canadian Prosperity Index that would complement existing disclosures.
This isn’t the first time Canadians have sought to align their investments with their values and convictions. The rise of ESG investing – supporting companies that prioritize environmental sustainability or diversity in leadership – reflects a broader shift toward value-driven decision-making. Investing in companies that strengthen Canada’s domestic economy could be a natural extension of this trend.
It is not a securities regulator’s job to pick winners and losers, or to tell people where to invest their money. But we can play a role in enhancing transparency and providing tools that empower investors to make decisions that not only align with their values but also add to Canada’s long-term prosperity.
At a time marked by division, protectionism and the erosion of democratic values, Canada stands out for its stability, rule of law, strong institutions and a culture of openness and pluralism. We should not underestimate the importance of these qualities to investors and market participants.
At this defining moment in our history, Canadians need to ask ourselves what matters to us. If we truly value the idea of Canada and what it stands for, then it’s time to invest in it.