Interesting critique of the new Canadian sovereign wealth fund
The IMF has repeatedly shown that better management of public commercial assets could generate substantial revenues — fiscal space created from assets governments already own, rather than from higher taxes or additional borrowing. The potential gains are measured not in billions but in the trillions globally, and are likely understated because urban real estate owned by the public sector is often recorded far below market value, or not valued economically at all.
And why not both? The simple reality is we have a vast amount of domestic infrastructure if we absolutely need if we are going to be viable without leaning on American infrastructure to survive. Using the Sovereign Wealth Fund to a) Help create clear indicators to investors where our priorities as a country lie, b) Help mitigate private risk on projects with long time to ROI horizons, and c) Ensure we as Canadians maintain public ownership of public infrastructure and resources.
The status quo is that we are an American satellite colony. Is that the Canada we want to live in?
I think the real ask here is that this “Sovereign wealth fund” contain more than just the new national public projects pegged to returns with very little to no input on the project and instead act like a managed group of assets that are “professionally managed” like pension funds do with their wholly owned investments where these projects (though public) are set up like a business with a board and executives managers etc. that answer to the SWF chairs on their board with the SWF asking questions like how are you growing the value of the service/project. It wouldn’t have to be purely monetary either, everyone always thinks of the train line that sells utility space along the line, adding additional lines to increase the amount of business that can be done, maybe the oil company that wants another pipeline somewhere else to reach different customers, but the real argument is that you can expand this beyond direct monetary value generated. for example You improved patient outcomes by 20% in this Hospital group this year your job next year is to identify whether you will be able to take on the increase in population of X city or whether you will need an additional hospital to meet demand, if the new hospital is chosen How will you improve the health outcomes within your system, new capabilities? additional capacity? Oh you have a problem with your municipal trash system that is not properly funded and lowers how much the municipal waste company can do well guess what the SWF board is going to show up and make you fix it so that it works well and it doesn’t lower the value of all the other assets in that city. in contrast it keeps the local politicians from dumping money in some pet project that will not have any demonstrable returns.
Sounds Nice right?
the problem is that this needs to be done slowly over time or piecemeal by local governments with provable metrics assets etc. that can be measured in some useful way with fair metrics that politicians can influence but not dictate or completely control. not all things run well as a business and trying to decide what should and should not be governed by monetary concerns or public outcomes is tricky. Singapore is talked about a lot but without getting into a long discussion Singapore has a very different idea of what governments can demand and do to public utilities and public outcomes then what the average westerner is comfortable with.
i also worry that if this is pushed down to local governments we run into the whole problem of the provinces taking ownership of these services from municipalities as they are “creature of the province” and none of the municipal or federal government end up with any access to the money to add to these funds.
You speak very broadly of what the “Average Westerner” is comfortable with. Canada has lived under a tyranny of monopolies effectively since its inception, I think you’d be very surprised regarding how quickly the typical Canadian will respond to top-down initiatives, marginal “51st State Canadians” notwithstanding. The beauty of the “Investor” style framing of these arrangements is it facilitates municipal partnership while disincentivizing provincial gold digging by provinces that would balk at being a minority stakeholder.
i would rather an ineffective but stable gov fund then it be in the hands of gamblers. we need to be able to hold them to account and by having it be wholly government controlled, it can then be held to account by the public even if its by proxy from some one in charge. I’m frankly done with this ‘private citizens do it better’ line of thinking. sure they make more money, but at what social or societal cost.
