The central bank warned Monday that Canadian institutions’ growing exposure to private credit abroad—mostly in the U.S.—could transmit stress back home if global markets suffer a sharp downturn. (The Logic)

Talking point: The Bank of Canada estimates the country’s largest pension funds held about $215 billion in private credit investments at the end of 2025, equal to roughly nine per cent of invested assets. The three largest life insurers held just over $200 billion in the first quarter of 2026, or about 22 per cent of invested assets. Canadian investment funds held another $54 billion in 2025, up more than 60 per cent since 2020. Banks also lent at least $40 billion to asset managers running private credit funds in the first quarter, though that represented only about one per cent of their overall lending. Canadian businesses, meanwhile, still get about three-quarters of their external financing from banks and public debt markets, while the share of non-bank loans has remained around 15 per cent for the past decade.

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