MORGAN: Canada doesn’t need a ‘Sovereign Wealth Fund’ — it needs to stop scaring away investors

Let's get right to the point. Canada is a crappy place to invest in or do business in. The regulatory environment, coupled with the government's general ineptitude, has been strangling the Canadian economy for over a decade. A recent report from RBC concluded that over a trillion dollars in capital has fled Canada in the last ten years. The GDP per capita continues to drop and looks to be in an utter freefall when compared to the USA. We are getting poorer. Canada’s productivity is horrific as well, averaging $73 USD per hour per person compared to $97 USD per hour in the USA. Even the Carney government could no longer ignore this.Instead of addressing the root causes of why Canada has become an investment pariah, the Carney government has instead announced the creation of a $25 billion sovereign wealth fund. Citizens who truly hate their pocketbook are even invited to invest in this catastrophe in waiting, too, if the tax dollar dump doesn't feel like enough.The government will set the standards for how it will determine who gets a piece of this fund. That invariably leads to well-connected insiders with questionable investment notions. The grifters can smell opportunities like this a mile away, and rest assured, they are already salivating over this one.The foundation of this fund is like the debacle of the Trans Mountain Pipeline expansion. Government policies made expanding the pipeline so economically unviable that the private proponent of the project pulled the plug. Even the Trudeau government realized it had pushed things too far, but rather than cut away the roadblocks that had driven the investors away, the government bought the project. Then, through mismanagement, they built the project at a 600% higher price and years late. The taxpayer never needed to invest a penny if the government could just get out of the way. The principle remains the same with other major projects..Canada’s new “spaceport” is another prime example of what happens when the government rushes to invest in something. A handful of creative souls who had leased property from the government for thousands a year managed to lease it back to the government for $20 million per year, with some of it being retroactive. All the land contains is a gravel road leading to a small concrete pad. Perhaps there is a hand-scrawled note on it saying, “rocket port.” Just think of what these economic wizards could do with $25 billion or more to play with.Carney has already been misrepresenting this fund by calling it a sovereign wealth fund and comparing it to what Norway has. Sovereign wealth funds are created through government surpluses, not by putting the bill on the credit card of the taxpayers. The funds also typically have a mandate of stabilizing the local economy and investing to get a maximum rate of return. In Norway, the fund purposely invests 100% outside of the country so it doesn’t meddle with the domestic economy. It is also mostly placed in relatively safe equities, real estate, and bonds.Carney’s debt fund will stay 100% within Canada and will be dedicated to high-risk investments. If the investments weren’t high risk, private investors would buy in without tax funding. This is just another corporate welfare fund that will predominantly invest in losers. It likely will be targeted to areas where the Liberals need growth in electoral support rather than areas in need of development. There is already the Canada Infrastructure Bank and other government subsidy programs in place. There is no need to create another one.All these funds and initiatives avoid addressing the elephant in the room. Political red tape in general has been hampering all developments, but the granddaddy of all the roadblocks is the de facto veto authority given to indigenous bands over all projects. Chiefs, both elected and appointed, along with a plethora of lawyers and bureaucrats, swarm every new development with demands and threats despite not having the authority to stop them. Not a single major project in Canada has been proposed that doesn’t have one indigenous band or another opposing it..The government must stop indulging these claims and lay down the law. Consultation with indigenous groups is a constitutional requirement, but consent is not.If the government could find the courage to stand on the real authority it has and guarantee projects will be completed despite indigenous opposition, the investment dollars would flood in. Canada is loaded with resources the world wants, and investors would be eager.Alas, courage and Liberals aren’t terms we often see hand-in-hand.Slush funds created through indebting citizens are easier to create than taking principled stands and governing responsibly. The new “sovereign wealth fund” is just another indication of what an increasing number of Western Canadians are realizing. Canada is broken.

MORGAN: Canada doesn’t need a ‘Sovereign Wealth Fund’ — it needs to stop scaring away investors

Related Stories

WENZEL: Calgary’s water crisis isn’t your fault — so why are you paying for it?

SLOBODIAN: AI Jesus is here, and it’s charging by the minute

LOY: The Falklands War; a retrospective on a reigniting conflict

FLETCHER: BC’s indigenous rights tangle keeps getting worse