Beyond Capital: How Long-Term Investors are Creating Value | Global Dialogues Toronto 2026

AI Adoption and Investment Strategy

• Tectonic Shifts: The panel identifies AI as the defining force of the Fourth Industrial Revolution, requiring a transition from viewing it as a "faster horse" (efficiency tool) to the "car" (structural reinvention).
• Governance and Integration:
  • Agility: Jenny Johnson (CPP Investment Board) notes that the next phase involves moving beyond initial employee adoption to rigorous governance and broader technology integration, such as 3D printing for ear cartilage and single-part airplane components.
  • Silo Elimination: John (AGF) reports AGF is dismantling organizational silos to create a single integrated research team combining fundamental, quantitative, and fixed income perspectives to handle market fragility.
  • Longevity Trends: The average tenure of companies in the S&P 500 has dropped from 30–40 years to 15 years, signaling that past strategies are insufficient for future volatility.
• Private Credit Constraints:
  • Duration Risk: Jack (Fortress Investment Group) warns against long-duration exposure in AI credit, arguing that credit investors are not compensated for the high upside volatility inherent in tech sectors.
  • Liquidity Mismatch: Investors in illiquid assets must prioritize short duration and residual value recovery to avoid being "stuck" if technology pivots or equity valuations collapse (e.g., the enterprise software sector).
  • Discipline over FOMO: There is a call to resist fear-of-missing-out (FOMO) dynamics, ensuring capital allocation matches the specific liquidity profile and mandate of the asset class.

Geopolitics, Security, and Global Order

• Existential Risks: Bruce Heyman highlights a convergence of threats between AI and nuclear proliferation, noting that fewer than 10 people globally control both AI launch codes and nuclear arsenals.
• Regulatory Pushback: A recent assembly of Nobel laureates at the Vatican signed a communique calling for a slowdown in AI growth to establish control mechanisms regarding nuclear security.
• Deglobalization: The era of pure globalization is ending, replaced by a "trifecta" of rupture in technology, geopolitics, and climate; business leaders must adapt to nearshoring and regional supply chains.
• US-Canada Relations:
  • Interdependence: Bruce Heyman emphasizes that Canada and the US are "family," noting that over 1 million Americans live in Canada and vice versa, with significant voting influence via abroad voting.
  • Protectionism Reality: "Buy America" policies and tariffs are viewed as sticky revenue sources for the US government, unlikely to be fully rolled back even under a new administration due to the $40 trillion national debt.
  • Consumer Blind Spots: Most Americans fail to realize they consume Canadian components (e.g., aluminum, softwood lumber, potash) in everyday goods; tariffs on these would be inflationary for the US.

Canada's Investment Opportunity

• AAA Status: Jenny Johnson points to Canada's unique AAA credit rating (shared only with Germany among G7 nations) as a critical advantage for infrastructure investment compared to the US.
• Capital Allocation:
  • Power Sustainable: Committed $10 billion to Canadian infrastructure investing, signaling a "all-in" strategy for the next decade.
  • Current Exposure: AGF holds approximately 10% of its portfolio in Canada, while CPP holds $40 billion, viewing the market as underexposed by international investors who typically see only a low-single-digit Canada exposure.
• Productivity Gap: Despite being a "godfather" of AI (Deep Learning) and possessing abundant natural resources, Canada suffers from mediocre productivity gains, prompting calls to reduce regulatory headwinds between provinces.
• Talent Retention: Key drivers for capital retention include improving the business-friendly environment to stop the migration of talent and capital to the US.

Macroeconomic Outlook and Debt

• US Debt Sustainability: The panel expresses skepticism regarding US debt solutions, ruling out austerity due to fixed entitlement costs and noting that inflation (the "reserve currency" option) will likely lead to higher long-term rates.
• Market Volatility: US debt levels are expected to cause market sentiment swings, creating a "roller coaster" of yields and asset valuations depending on global confidence in the direction of the economy.
• Bifurcated Economy: The US economy is described as "K-shaped," with higher socioeconomic segments remaining low-leveraged and stable while other segments struggle with increasing debt loads.
• Crowding Out: A long-term risk identified is that the sheer scale of US Treasuries will eventually crowd out other investment opportunities, though a total failure of the asset is deemed unlikely given its role as the global risk-free benchmark.
• Demographics: Shrinking populations in Westernized countries are making it increasingly difficult to cut entitlements, compounding debt challenges.

Forward-Looking Statements

• Canada's "Moment": Bruce Heyman declares that current geopolitical and technological shifts create a unique, favorable investment window for Canada, provided it can diversify its economy and enhance infrastructure.
• Equity-First Approach: Jack notes that private credit follows equity capital; a surge in Canadian equity investment is a prerequisite for significant private credit deployment in the region.
• Infrastructure Pipeline: Power Sustainable currently holds the largest pipeline of wind, solar, and battery projects in Canada, utilizing integrated credit teams to fund renewable and fiber infrastructure.
• Electoral Impact: Heyman urges US expatriates in Canada and dual citizens in the US to vote, noting that election outcomes in both nations are frequently decided by margins smaller than these demographic groups.