Fund will be used to finance construction of major projects of national interest

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[–] 76 points 6 months ago (6 children)

In principle, a sovereign fund is a fantastic idea that we should have done long ago.

In the specifics, I'm a bit concerned about how it's being set up, because I don't trust that "major projects of national interest" won't be narrowly defined as "fossil fuel infrastructure".

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  • [–] 23 points 6 months ago

    There's a few other projects that are big ticket items that there would need to be federal money for. Thinking things like the Toronto - Quebec City high speed rail, the port expansion at Churchill, the space launch site in Nova Scotia. Pretty sure the major port in BC (the container port, not the LNG/oil one) is looking to expand too. Then there's the Ring of Fire mining projects in northern Ontario. That would for sure involve the federal government, since it touches the "critical minerals" issue and directly involved Native relations.

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  • [+] -9 points 6 months ago (4 children)

    I just figured it was to funnel money to Liberal Party donors as usual.

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  • [–] 10 points 6 months ago* (3 children)

    Your downvoters must have already forgotten about the 'Green Slush Fund' (Sustainable Development Technology Canada (SDTC) program) the one that the Liberals refused to reveal the details of where the billion dollars went even after Parliament demanded the books be opened. Eventually the Auditor General found that Liberal appointees to the fund gave $400 million tax dollars to their own companies, involving 186 conflicts of interest. We call this Green Slush Fund for a reason. Imagine how much more accountable they'll be with 30 billion.

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  • [–] 30 points 6 months ago (4 children)

    If you're Canadian you should be angry you don't already have a trillion+ dollar fund.

    Canadians literally should be the wealthiest people on the planet

    They have more resources and in abundance than anywhere else

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  • [+] 16 points 6 months ago (11 children)
  • [–] 4 points 6 months ago (8 children)

    CPP serves a different and super narrow purpose. The idea is to maintain a very safe, stable portfolio that can reliably pay out pensions. We CANNOT make politically/ethically charged decisions here AT ALL.

    From what I'm guessing, the SWF that's being proposed here is something of a middle ground. Independent, but with a "let's invest in Canada" approach. The idea doesn't seem to be just to maximise roi, but to rather do that along with "investing in Canada". Basically the government wanting to create/fund profit making, Canadian businesses that require large capital to get started (so mostly infrastructure projects).

    Keeping it independent from parliament kinda insulates it from political nonsense. At the same time, cheaper debt for the Canadian economy as a whole.

    I like it. However, I would like if the operations were cooperativezed. I'm afraid that future governments would raid the fund to promise temporary tax breaks or whatever. They can't do that with the CPP, as this would cause massive political backlash. I hope the public is well educated enough regarding this fund, where its protection is of paramount importance to them.

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  • [–] 6 points 6 months ago* (1 child)

    What will probably happen is

    1. The fund builds something like a new toll highway where tolls were supposed to pay back into the fund.

    2. Conservatives take office, and sell the highway toll rights for pennies on the dollar.

    3. Conservatives lose office, and then trash talk the liberals for the fund not working and what a waste the highway was.

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  • [–] 1 point 6 months ago

    A piece I think we're missing. They probably are opening the fund up to the public to invest in for exactly this reason.

    If I'm putting in a thousand bucks in the fund through my TFSA, and if PP decides to sell off my highway for pennies on the dollar, my next thousand bucks would be invested in a sniper rifle.

    If public involvement in the fund wasn't there, then what you said would be the likely outcome. I mean at least that's how I understand it (and if what I've understood is correct... Holy hell is the Carney admin smart lol)

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  • [+] 4 points 6 months ago (6 children)
  • [–] 1 point 6 months ago (4 children)

    I was thinking of this the entire evening. Maybe there's rebuttal to this point? So they're talking of opening the fund up to the public as a retail product. They've stated that the mandate would be to give market returns. This way, the average individual buys into the fund as well (I would for sure). THAT is how the public becomes interested in the fund's survival and growth as it is for the CPP.

    Let's say the Tories get in next election. If the fund is giving good returns, then the toriest of Tory voter would get out on the streets if there is even a whiff of the government dissolving it. Now I am exaggerating here, but the point I'm trying to make is that opening it up to retail investors ensures public interest in the fund's continued existence and expansion.

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  • [+] 1 point 6 months ago (4 children)
  • [–] 1 point 6 months ago (3 children)

    Here's my guess from my comprehension of the write-up:

    • Crown corp with an independent board of directors (like the CPP).
    • Mandate to invest only in Canadian projects.

    So my guess is that the funds would most likely be used to fund highly capital intensive projects from the ground up (instead of just buying Shopify stocks for example). This would almost always be infra projects. Depends on how much risk the board would be willing to take for assessed potential reward.

    Tbh I'm not really that worried about the competency of the board. The CPP and QPP have been incredibly successful till now ¯⁠\⁠_⁠(⁠ツ⁠)⁠_⁠/⁠¯.

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  • [–] 1 point 6 months ago* (2 children)

    The CPP and QPP have been incredibly successful till now

    Hey, CPP, want to grow and handle this other thing?

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  • [–] 1 point 6 months ago (1 child)

    Yeah, I hope they create structures to reuse the CPP's analysis and even staff for that matter.

    My guess though is that it would be slightly the other way round, where the Canada strong fund creates investment products that the CPP could purchase. But yeah, I hope CPP's talent is used here. It's clearly working, and quite competent!

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  • [–] 1 point 6 months ago (1 child)

    Venezuela will start to pump oil. The Middle-East war will end. Europe is going to structurally cut down how much oil it needs. The war in Ukraine will end. Oil from Africa will flow.

    These capital investments aren't expensive. A $1billion investment into something is nothing nowadays, internationally, so we should be really suspicious as to why these are not getting invested into. I don't think they have a chance of turning a profit, just money pits.

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  • [+] 1 point 6 months ago (1 child)
  • I'd never thought I'd see electric cars replace gas cars, even up till last year. Now I'd think that most gas cars will be gone in 15 years. When tech revolutions happen, they happen fast. Europe, Asia will quickly go all electric, as well as India, Pakistan, Egypt, S. Africa. Followed by S. and then N. America.

    Look at pictures from the 1980s and 90s, it was all medium sized sedans, and small hatchbacks; times change.

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  • [–] 14 points 6 months ago (1 child)

    This is good news but I bet it has some neoliberal aspect that ultimately chips away at how good this could actually be.

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  • [–] 8 points 6 months ago

    Canada announces the creation of a state-gauranteed investment vehicle that it is calling a sovereign wealth fund to ride off the good PR of Norway's sovereign wealth fund, which this resembles in (literally) name only.

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  • [–] 6 points 6 months ago

    I hope it can escape looting by future governments and that oversight of the funded projects is rock solid to avoid funneling money to cronies.

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  • [–] 8 points 6 months ago

    As long as none of the money, and none of the assets harvested with that money enters the US economy it's okay.

    He still hasn't shown how he will ensure Canada won't benefit the US.

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  • [–] 3 points 6 months ago

    I'll wait for the official announcement, but looks to me like this fund will financed with debt. So another $25B on top of the $75B already.

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  • [–] 4 points 6 months ago (7 children)

    The problem I see with that is that this fund won't last long enough to matter. I don't even give it a decade before a different administration quietly takes the money from that fund to spend it on whatever.

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  • [–] 4 points 6 months ago* (last edited 6 months ago)

    This is the problem: any surplus or balancing of the budget is weaponized.

    The party being fiscally responsible is demonized: "why are you taxing us for benefits we don't see now?".

    Cue to the opposition being elected and pilfering the coffers for easy political points from the electorate, then they will remember the opposition's term as the party of "good times".

    I wish the electorate wasn't this dumb, but in Ontario atleast, we re-elected in Doug Ford so...

    This needs to be managed by an independent government entity, like a central bank. They say that it is, so that's cool.

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  • [–] 2 points 6 months ago (4 children)

    Do you prefer it being under less democratic control than more? Cause that's flip side of independent gov't institutions.

    Personally I think isolating public infrastructure/institutions from the gov't has not worked incredibly well. I used to think the opposite. It "protects" them somewhat from bad actors but it also limits the ability of other gov'ts to leverage them to fulfill what Canadians voted for. Essentially limits the scope of electoral democracy to affect change further than it already is.

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  • [–] 3 points 6 months ago (3 children)

    The DOGE example shows we do need a way to protect institutions from the "tear it down" far right. It's ridiculously easy to destroy but hard to build. So I would say give them a strong democratic mandate and charter and make it legally hard to tear down in one mandate.

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  • [–] 1 point 6 months ago* (2 children)

    Right, that's the worst case scenario result. But I think we (they) might have gotten to it by having decades of unrepresentative government where the gov't represented business at the expense of the majority. And if that's valid, then I think there's an argument to be made about getting the gov't to do what's elected to do by giving it more power to do stuff, as well as experience the consequences of bad gov't earlier, before we get to a DOGE moment. That doesn't really change how capital captures and drives gov't to make decisions in its interest instead of workers, but we'd still be able to course correct faster and more effectively I think. I don't have a settled opinion on this but I've been warming up to the idea that voters should in fact be able to change gov't institution directions via elections in major ways. Also I don't think isolating gov't institutions from elected governments does prevent capital from taking them over. And we might be curbing just our own ability to exercise control.

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  • [–] 2 points 6 months ago* (1 child)

    Oh I hear you. But I think we can create robust democratically accountable institutions that are also protected from destruction. Things like civilian oversight boards, ombuspeople, and unions having a stake. I'd even go wild and say use things like sortition to randomly select citizen "juries" with the power to veto defunding/destructive policies.

    Edit: the Liberals aren't going to do any of that of course.

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  • [–] 3 points 6 months ago

    Wow, more public money going to private companies, awesome, and it is to destroy the land? Sick. So happy.

    The best thing for capitalists in this country was Trump, you can say shit is "for Canadians" and libs will just fucking eat it up.

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  • 1 comment in c/world view that post
    [–] 3 points 6 months ago* (last edited 6 months ago)

    Aren’t sovereign funds generally based on principle of storing of excess wealth as investment for future generations? This sounds like Canadians are creating a fund that’s intended to be spent immediately, and they’re also encouraged to put their own money there. One would think a government should be saving money when times are good, not when they’re getting bad. It sounds like austerity, but also like public investment, so I’m confused by all of this.

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