CAPM
CAPITAL GROUP MULTI SECTOR INCOME SELECT
stock TSE

You are taking that quote out of context. Read the whole article.
He is not recommending 3.4%, he is saying hypothetically you should have 3.4% based on market cap weight. He is recommending 30%, which is why Vanguard's VEQT has 30% Canadian allocation.
Based on CAPM ("efficient portfolio" as he mentioned) we should allocate every country based on market cap. But under ICAPM we try to optimize our portfolios.
Again, also from your article:
That doesn’t mean being overweight Canadian equities at all is a bad thing and there are many reasons for doing so, **Hasanjee acknowledges**, including familiarity, tax considerations, hedging domestic liabilities and currency risk, and future return differentials.

>VT if you have USD is the theoretical best diversified ETF it is a straight world by market cap breakdown.
Under CAPM, yes.
But we don't live in a CAPM world. Thus why ICAPM exists to rationalize deviating from the "optimal portfolio."
>For some reason there is no total market fund in canada.
Because this theoretically suboptimal for Canadian investors. The Canadian equivalent of VT is XEQT/VEQT/ZEQT/etc.

You are taking that quote out of context. Read the whole article.
He is not recommending 3.4%, he is saying hypothetically you should have 3.4% based on market cap weight. He is recommending 30%, which is why Vanguard's VEQT has 30% Canadian allocation.
Based on CAPM ("efficient portfolio" as he mentioned) we should allocate every country based on market cap. But under ICAPM we try to optimize our portfolios.
Again, also from your article:
That doesn’t mean being overweight Canadian equities at all is a bad thing and there are many reasons for doing so, **Hasanjee acknowledges**, including familiarity, tax considerations, hedging domestic liabilities and currency risk, and future return differentials.

>VT if you have USD is the theoretical best diversified ETF it is a straight world by market cap breakdown.
Under CAPM, yes.
But we don't live in a CAPM world. Thus why ICAPM exists to rationalize deviating from the "optimal portfolio."
>For some reason there is no total market fund in canada.
Because this theoretically suboptimal for Canadian investors. The Canadian equivalent of VT is XEQT/VEQT/ZEQT/etc.