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As unions and pension funds worldwide pull billions from Tesla over CEO Elon Musk’s controversial political activities and the company’s declining stock value, one of Canada’s largest public sector unions is urging its pension manager to divest from the embattled electric vehicle giant.
The Canadian Association of Professional Employees (CAPE), which represents 27,000 federal workers, says it has joined the international campaign in solidarity with US federal public servants. The union is calling on the Public Sector Pension Investment Board (PSP) to divest from Tesla.
As of March 2024, PSP managed $264.9 billion in net assets, making it one of Canada’s largest pension investors. It oversees federal pension funds for the public service, Canadian Forces, RCMP and Reserve Force, with a global portfolio across both public and private markets.
At the end of 2024, PSP held more than 690,000 Tesla shares worth nearly $387 million — a stake that has since dropped in value by roughly $186 million as Tesla’s share price continues to fall.
CAPE president Nathan Prier, who also serves on the PSP advisory committee, said the move follows a long tradition of union-led divestment efforts. He called it “deeply concerning” that public pension funds are supporting a company whose owner is actively undermining US federal programs and workers who provide essential services to millions.
“We in Canada have been watching the American labour movement and working people get attacked like never before, and public servants are the main target,” Prier said. “CAPE and its members stand firmly in solidarity with our siblings south of the border and against corporate interference, naked conflicts of interest and indiscriminate job cuts that weaken critical public services ordinary Americans rely on.”
Prier told Canada’s National Observer that Musk is using his corporate power — and his unelected role heading the US Department of Government Efficiency (DOGE) — to dismantle essential public services and fire workers en masse.
“Canadian workers will not stand by while our pension funds prop up a billionaire attacking democracy and public service,” he said.
Canada’s National Observer reached out to the Public Sector Pension Investment Board for comment but did not receive a response in time for publication.
CAPE’s call also aims to raise awareness of similar risks in Canada. The union warns that future Canadian governments should not be tempted to adopt anti-public-service strategies seen in the US.
Prier said divesting from Tesla would send a clear and principled message: Canadian public sector workers and taxpayers will not support companies that put profit over public service — particularly when those companies support an administration threatening to annex Canada.
“Canadians need much more than tax cuts, deregulation and a race to the bottom to defend themselves against American attacks on our economy and sovereignty,” reads a CAPE statement. “A new federal government mandate should deliver for working people to get us through this crisis, and that will mean strong federal and provincial programs, such as EI and health care, backed by a strong public sector.”
The union’s call comes amid growing international backlash against Musk and Tesla. European pension funds — including Sweden’s KPA pension and Folksam, and Denmark’s AkademikerPension — have already divested from Tesla, citing governance issues, anti-union practices and Musk’s political extremism. Another of Europe’s largest pension funds, ABP, has sold its entire stake in Tesla.
In the US, pension funds are also pushing back. New York City’s comptroller is considering legal action against Tesla, linking Musk’s political distractions to shareholder losses. Advocacy groups are also urging CalPERS, one of the largest US pension funds, to divest from Tesla.
Prier encouraged other Canadian unions to follow suit and pressure their pension funds to consider the broader implications of continuing to invest in Tesla.
Financial red flags
Julian Birkinshaw, dean of Ivey Business School at Western University, says CAPE’s argument isn’t just symbolic — it's also financially sound.
While Tesla was once hailed as a green-tech innovator, many investors now view the company as overvalued and volatile, he said. “Even setting aside Musk’s political behaviour, the company is still fundamentally overvalued — it’s being priced like a tech stock, but it’s just a car manufacturer.”
Birkinshaw warned that Musk’s personal brand is now “toxic” in Canada and Tesla will struggle to regain consumer trust. “Even if Musk steps down, it could take years for Tesla to rebuild its image,” he added.
Unions are right to raise concerns, given Musk’s “anti-democratic” behaviour and opposition to organized labour, which clash with core Canadian values, Birkinshaw said.
Experts say Tesla has long struggled with Environmental, Social, and Governance (ESG) issues and those risks are now accelerating.
Tim Nash, founder of Good Investing, said CAPE’s call to divest from Tesla raises legitimate concerns and reflects broader issues in sustainable investing. While singling out one company can be challenging, he believes it's important for pension funds to apply a strong ESG lens — particularly when governance failures are evident.
“Tesla has always had governance issues, but now it’s an even more severe problem because of their CEO’s and board members’ involvement in the US government,” Nash said.
Current ESG frameworks don’t offer clear tools for assessing the reputational or political risks associated with a company’s leadership, Nash said. While Elon Musk’s actions haven’t been flagged by major ESG rating agencies, they raise legitimate concerns about long-term brand damage and risk. He suggested that Tesla’s governance issues, particularly its leadership’s involvement in US political affairs, are unusual and troubling.
From a financial perspective, Nash described Tesla as having both a high price-to-earnings ratio and a high Beta (its volatility against its benchmark), suggesting that the current share price is expensive and more volatile when compared to competitors. He said other EV companies, such as Chinese EV giant BYD, now outperform Tesla in key financial metrics, including total revenue and unit sales.
While calls for divestment may grab attention, Nash believes the deeper issue is how pension funds define and apply their sustainable investing policies and wants to see the public sector pension fund develop clearer standards.
Abdul Matin Sarfraz / Canada’s National Observer / Local Journalism Initiative.
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