At one point, Canada welcomed private investment, encouraged companies to build things, and understood that governments should create the conditions for prosperity rather than own the businesses that produce it. Currently, Ottawa is celebrating a government-controlled, government-financed oil pipeline while threatening legal action that could force Stelco’s American owner to sell its Canadian assets.Canada has not yet become a socialist dictatorship, nor is it confiscating entire industries. But the growing enthusiasm for government ownership and control deserves scrutiny, particularly when history offers expensive lessons about politicians promising to run businesses better than their owners.Let’s start with Cuba. After Fidel Castro took power in 1959, his government accused foreign companies of exploiting workers and undermining national sovereignty. Sweeping nationalizations followed, transferring banks, refineries, sugar mills, and other businesses into government hands.Castro promised prosperity and economic independence. Instead, central planning and government ownership undermined investment, management expertise, and entrepreneurial incentives. Repression, dependence on Soviet support, and the American embargo also shaped Cuba’s economic decline, but nationalization certainly did not deliver the prosperity Cubans were promised.Hugo Chávez followed a similar course in Venezuela. Beginning in 2007, his government nationalized major operations in oil, telecommunications, electricity, cement, and steel, including the enormous Sidor steel operation in 2008. ExxonMobil and ConocoPhillips lost control of major investments and pursued international arbitration.Unlike Castro, Chávez sometimes negotiated compensation. But the government increasingly determined who could own strategic industries and on what terms. Investment suffered, skilled workers departed, and production deteriorated, with corruption, mismanagement, sanctions, and other pressures compounding the damage..Robert Mugabe provided another warning in Zimbabwe, formerly Rhodesia. Beginning in 2000, his government forcibly acquired thousands of commercial farms, predominantly from white landowners. There was a legitimate case for addressing colonial land inequalities, but politically driven seizures and insecure property rights helped devastate agricultural production.Equipment deteriorated, experienced farmers departed, and investment collapsed. Governments can redistribute property, but they cannot legislate expertise, productivity, or prosperity into existence.Now consider Canada’s proposed Pacific Link oil pipeline. On October 1, Prime Minister Mark Carney announced approval of its national interest designation. The preliminary cost is $35 billion to $44 billion, with Ottawa and Alberta sharing 90% ownership during construction.Private sector participation? Pembina Pipeline Corporation has an initial 10% economic interest, with the option to increase it. Indigenous communities are to be offered a minimum 10% ownership stake, with the final ownership arrangement still to be determined. Most likely, indigenous ownership will be publicly financed.According to Pembina’s disclosure, the company retains discretion over its final investment decision and will have no at-risk development capital before making it. One can assume Pembina will be seeking guarantees from the public purse.Think about that. Canada possesses some of the world’s largest petroleum reserves and desperately needs additional export capacity. Yet taxpayers are being positioned to assume the overwhelming majority of initial project ownership and its associated financial exposure. Could that possibly have something to do with what Ottawa has done to Canada’s investment climate?.Regulatory uncertainty, political interference, and constantly changing requirements have discouraged major energy investments for years. Kinder Morgan’s departure forced Ottawa to purchase Trans Mountain in 2018, and now the government proposes financing and controlling another enormous pipeline.To be clear, this isn’t Castro-style confiscation. But it raises a disturbing question: why has a country overflowing with valuable resources become so dependent on taxpayer-backed development?The Stelco dispute requires a different distinction. Cleveland-Cliffs acquired the company in 2024 for about $3.4 billion. Ottawa approved the acquisition subject to binding commitments protecting employment and operations. American steel tariffs and difficult market conditions subsequently contributed to plans affecting approximately 500 Hamilton jobs.Industry Minister Mélanie Joly has threatened enforcement, potentially including a court-ordered sale. Cleveland-Cliffs voluntarily accepted those commitments, and Ottawa can seek to enforce them. A forced sale would not automatically mean government ownership, and enforcing an agreement is fundamentally different from confiscating a business. But several prominent voices are calling for the nationalization of the steel industry. The concern arises when the political response moves beyond enforcing commitments to treating public ownership as the solution to industrial difficulties. Changing an owner does not eliminate tariffs, restore demand, or make an uneconomic operation profitable. Taxpayers will inherit those same problems along with a host of others..That is where the historical comparison matters. Cuba, Venezuela, and Zimbabwe pursued very different policies under very different political systems, but all demonstrated the damage governments can do when political objectives override the conditions businesses need to operate successfully.Canada’s investment performance already raises concerns. An OECD assessment found that investment per worker in 2023 was only 85% of its 2014 level, while American investment per worker increased 21% over the same period. Government ownership will not repair this investment climate..Investors need predictable rules, enforceable contracts, and a reasonable opportunity to earn a return. When political decisions make projects harder to finance and complete, capital goes elsewhere. Canadians then lose the jobs, production, and tax revenues that investment could have generated.It is a national disgrace that a country with Canada’s resources, experienced workers, and access to major markets has allowed its investment environment to deteriorate this badly. Taxpayers should not have to assume the risks that private investors hesitate to accept, and that should provoke hard questions, not a victory lap from Ottawa.The real achievement would be restoring conditions in which private companies compete to build pipelines, develop resources, manufacture steel, and create jobs. Canadians should demand governments that provide a clear, stable regulatory environment, enforce agreements fairly, and let private enterprise get on with building the country.
