Private credit exposure for Canadian firms reaches $360B, mostly in US markets

Canadian financial institutions and funds have quietly built up roughly C$500 billion ($360 billion) in private credit exposure, with the vast majority of that capital deployed outside Canada’s borders. The Bank of Canada flagged the figure in its 2026 Financial Stability Report, offering one of the clearest pictures yet of just how deeply the country’s biggest investors have waded into the booming world of non-bank lending.

Who’s writing the checks

Canada’s largest pension funds, collectively known as the Maple 8, account for a significant chunk of the action. Together, they’ve amassed over $100 billion in private credit assets.

The Canada Pension Plan Investment Board leads the pack with approximately $43 billion in private credit holdings. That figure is set to grow substantially, with plans to expand its portfolio to over $115 billion by 2029.

Life insurers are right there alongside the pensions. Manulife and Sun Life each exceed $40 billion in private credit investments.

Most of this capital flows into US markets, where the private credit ecosystem is deepest and most developed. Domestic lending in Canada remains comparatively limited.

The appeal and the anxiety

Private credit offers yields that traditional fixed income markets have struggled to match, along with structural features like direct lending arrangements that give investors more control and transparency over individual deals.

CIBC Asset Management recognized the growing institutional appetite when it launched a diversified private credit fund in January 2026, designed to give institutions broader access to the asset class.

The Financial Stability Board recently reported that bank credit lines to private credit funds reached approximately $220 billion as of May 2026. Those credit lines represent the connective tissue between traditional banking and the shadow lending world, and they’re exactly the kind of interlinkage that can amplify stress during economic downturns.

Why $360 billion deserves a closer look

The Bank of Canada’s characterization of risks as “manageable” comes with a caveat that continued monitoring is essential. The global private credit sector’s complexity and opacity make it inherently difficult to assess where vulnerabilities might be hiding until they surface during periods of market stress.

Private credit deals are, by definition, privately negotiated. There’s no public market pricing to provide real-time signals about deteriorating credit quality. Valuations rely on models and manager assessments rather than observable transactions.

The cross-border dimension adds another layer. Canadian regulators have limited visibility into the US private credit markets where most of this capital is deployed.

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