Canada is pitching more than $1 trillion worth of investment opportunities to global investors converging on Toronto this week. But business leaders warned at the Milken Institute’s Toronto event Monday that attracting the capital needed to develop those projects will depend on reducing regulatory uncertainty and execution risks that held back past investment. 

The downtown event took on the city’s frenetic energy, as celebrities walked the red carpet at the Toronto International Film Festival and global asset managers and pension funds digested a deal book of 167 projects that will be pitched at Tuesday’s Canada Investment Summit. The Milken Institute, which counts some of the world’s biggest investors as its partners, hosted more than 200 business leaders from Canada, the U.S., Europe and Australia.

TD CEO Raymond Chun used the fanfare to debut $150 billion in new domestic lending, advisory and other financing activities over the next five years on Monday morning, while Finance Minister François-Philippe Champagne premiered plans to provide more tax certainty for investments over $1 billion.

But panelists at the Milken Institute event had tough criticism of the country’s financial push. 

Canada has natural resources and early access to artificial intelligence, yet it’s not a leader in business productivity—and in the hyper-competitive world of asset management, that’s enough to give investors pause, said Jenny Johnson, CEO of Franklin Templeton Investments. 

“Canada has so many tailwinds. Now you’ve got to get rid of some of the headwinds,” she said, warning that regulations that slow down business and increase costs will force investors to look elsewhere. 

One panel of capital markets executives and investors cautioned that access to money itself isn’t Canada’s main problem. Jeremy Carter, global analytical head at Fitch Ratings, said that the country has ample domestic and international capital but lacks enough projects investors are prepared to finance. Data centres are one area where Canada has fallen well behind the U.S. despite its energy and other advantages, he said. 

Mo’ money, mo’ problems: TD’s new pledge to fund energy, critical minerals, infrastructure, technology, defence and aerospace makes it the latest financial giant to set aside more domestic capital, joining Bank of Montreal, CIBC, RBC, Bank of Nova Scotia, Ontario Teachers’ Pension Plan and Public Sector Pension Investment Board, which announced billions in new funds over the past week.

But Carter warned that accelerating a few “marquee” developments won’t solve Canada’s problem, arguing that Canada needs thousands of viable projects rather than only a handful of nationally significant ones. 

TMX Group CEO John McKenzie similarly called for the equivalent of a “minor projects office,” saying smaller companies struggle with the same complex approval processes as billion-dollar developments. Uncertainty over whether projects can actually be completed raises the cost of capital, he said. McKenzie noted that annual energy sector financing through the country’s public markets has fallen from nearly $20 billion annually more than a decade ago to less than $1 billion today, while the number of listed energy companies has dropped from roughly 400 to fewer than 200. 

Champagne expressed hope that his new tax policy, offering investors binding confirmation of the tax consequences around their investments, provides the type of certainty that businesses are asking for. “Capital will go where the time to market is fast,” he said. 

Trade diversification dilemma: The push is unfolding as Ottawa tries to reduce Canada’s reliance on the U.S. market. The European Parliament said Monday it’s set to open an Ottawa office for “even closer parliamentary co-operation.”

But Carter cautioned that diversification cannot realistically replace the U.S., given its proximity and size. “Canada has the same problems that the European Union has,” Carter said. “ Canada needs to have productive trade relations with the U.S., and I don’t think it’s going to replace that with Europe.”

Data centre, private credit hazards: RBC CEO Dave McKay and BMO Capital Markets head Alan Tannenbaum said they are reviewing domestic data centre deals, which Tannenbaum hopes will also bolster smaller firms that supply the “picks and shovels” for bigger projects. While Tannenbaum said the “staggering” amount of capital now available to companies is boosting business confidence, he also acknowledged that there had been an “overheated” environment in private credit financing. 

Other investors warned of risks in both sectors. Syl Apps, a senior managing director at real estate developer Hines, said his firm avoids certain data-centre projects, such as acquiring existing data centres, because “there’s a lot of risk there that the market is not counting.” Fortress Investment Group co-CEO Jack Neumark said that credit investors are not always seeing the upside of data-centre investments. 

“As credit gets more and more involved, I think everyone’s going to have to be careful,” Neumark said. 

AI’s rewards—and risks: Cohere CEO Aidan Gomez is the week’s most prominent AI voice addressing business heavyweights, appearing at both the Milken Institute conference and Canadian Venture Capital and Private Equity Association’s event on Monday, as well as the Canada Investment Summit itself and AI conference All In later in the week.

“We deserve to see part of the upside of this technology,” he said.

AI safety is this week’s other major topic, following calls by Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman to “pace” the advance of the technology. Gomez pointed to his rivals’ suggestion that the U.S. relax some antitrust rules to allow for such co-ordination. “That should raise a huge red flag in terms of what some of the incentives behind this might be,” he said.

Cohere client RBC has been among the fastest-moving of large Canadian corporations to embrace AI. It’s speeding up development of new products, McKay said. Still, he expressed concern about the sovereignty of systems and cybersecurity. “I don’t think we have enough guardrails,” he said.