LILLEY: Mark Carney's new Sovereign Wealth Fund just like all other funds
· Toronto Sun
The takeaway from Mark Carney’s announcement of a new Sovereign Wealth Fund for Canada might just be that big government is back. Of course, this being Canada, big government never really left.
Even under supposedly conservative governments, we see tax dollars being “invested” in the economy, picking winners and losers and doing what the private sector should but won’t do.
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Carney’s announcement of the Canada Strong Fund , $25 billion to be invested over three years, joins a long list of other funds that are supposed to do the same. The one thing Canada is not lacking is a pool of government money designed to build infrastructure, boost the economy or find and develop the next generation of entrepreneurs.
“Canada’s new government is catalyzing a series of nation-building projects in energy, trade, critical minerals, transport, data, and beyond —
projects that will make Canada stronger, more resilient, and more independent,” Carney said in announcing the fund.
One might rightly ask how the Canada Strong Fund differs in purpose from the Canada Infrastructure Bank, the Canada Growth Fund, the Venture Capital Catalyst Initiative, which is now called the Venture and Growth Capital Catalyst Initiative, or the Strategic Innovation Fund. Of course, this is a short list and doesn’t include the various regional economic development agencies, the federal government’s various loan or business development groups or assorted slush funds.
At his news conference announcing the Canada Strong Fund on Monday, Prime Minister Carney said that the infrastructure bank provides loans while this new fund will take equity or ownership stakes in projects to make more money. Yet the reality is that the Canada Infrastructure Bank, which Carney just boosted from $35 billion in funds to $45 billion last November, also take ownership stakes in projects.
How many different bureaucracies do we need investing in Canadians businesses and trying to “unlock” or “crowd in” private-sector investment?
This is how the federal government describes the $15-billion Canada Growth Fund, “a financially prudent portfolio of investments that unlock private sector investment in Canadian businesses and projects to help grow Canada’s economy at speed and scale.”
Nothing new about this
What Carney is giving us isn’t a new or transformational idea, it’s another bureaucracy, something he’s fond of building. The Major Projects office he announced last summer hasn’t moved forward a single project that wasn’t already underway when it was referred to them and the Build Canada Homes organization was set up to build more homes when in fact, home building is declining.
The major problem with the Trudeau government was that the announcement was the policy, they didn’t think beyond the news release. The major problem with the Carney government appears to be that the only thing they think of beyond the announcement is how to build more bureaucracy.
We don’t need anymore!
In addition to the Canada Strong Fund, the Canada Infrastructure Bank, the Canada Growth Fund, the Venture and Growth Capital Catalyst Initiative and the Strategic Innovation Fund we have as whole series of other groups designed to attract investment, pull in the private sector and build Canada strong. Those would include the Canada Development Investment Corporation, Invest in Canada, the Canada Indigenous Loan Guarantee Corporation, the Indigenous Equity Initiative, the Business Development Bank of Canada, Export Development Canada and more than half a dozen regional development agencies.
Here’s a radical idea.
Private-sector funding sure would help
Instead of putting billions of dollars we don’t have into a Sovereign Wealth Fund which is really a Sovereign Debt Fund, we could improve the investment climate to attract more private-sector funding. We could eliminate capital gains for anyone who reinvests in a Canadian company, lower personal and corporate income taxes to make Canada more competitive, reduce red tape in getting projects approved and expand full expensing of capital costs to encourage investment.
None of this would cost $25 billion, and the returns would be substantial.
It also wouldn’t allow government to take credit for the projects that go forward and that is the real issue.