Trudeau courting rich foreign investors

Prime Minister Justin Trudeau spent Monday pitching some of the world’s most powerful instutional investors on his country’s virtues.

TORONTO — Prime Minister Justin Trudeau spent Monday pitching some of the world’s most powerful institutional investors on his country’s economic virtues, urging them to invest in Canada — specifically in infrastructure.

Trudeau’s first brief meeting was with Canadian financial representatives at a swank downtown Toronto hotel where he talked about a $180-billion investment opportunity.

“Canada has a made very strong commitment to be investing in infrastructure over the next 12 years,” Trudeau told the group of Canadian pension funds and financial institutions.

“We need to make sure that the investments we’re making are going to bring Canada in the right direction and done as efficiently as possible.”

He talked about leveraging private capital to make taxpayer dollars “go even further” — the aim being to put the country in the global vanguard when it comes to transit, green and other types of infrastructure.

“These are the things that we know are going to be a key part of Canada’s growth.”

But in Ottawa, New Democrats vowed to fight “every step of the way” what they called Trudeau’s scheme to privatize public infrastructure.

NDP finance critic Guy Caron said private investors would wind up controlling about 80 per cent of roads, bridges, hospitals and other infrastructure built through Trudeau’s proposed infrastructure bank, designed to leverage $4-5 in private dollars for every $1 invested by the federal government.

And those companies will want a return on their investment of as much as seven to nine per cent, which Caron said will only be realized by forcing Canadians to pay tolls and user fees and will wind up costing taxpayers more than twice as much.

“They won’t do it out of the goodness of their hearts they will want a return,” Caron told a news conference.

“There’s not a thousand ways to do it. It’s through tolls and it’s through user fees.”

Trudeau never mentioned privatization during last year’s election campaign, he added.

“The Trudeau Liberals were supposed to be for the middle class, they were supposed to be for the little guy. They are now showing their true colours, that of the party of wealthy private investors.”

Others on hand for Monday’s meeting included top executives from the other big banks, insurance company giants such as Manulife and Sun Life, the country’s largest pension funds and asset management firms. Finance Minister Bill Morneau and Infrastructure Minister Amarjeet Sohi also attended, as did their transport and natural resource colleagues.

Trudeau and many members of his cabinet were also attending a second meeting later Monday with two dozen representatives of large international pools of capital worth as much as $21 trillion. Those at the table were expected to include representatives of central banks, sovereign wealth funds, insurers and pension funds.

Attracting billions in private-sector capital for infrastructure projects is key to the Liberal government’s long-term strategy to boost Canada’s sluggish economic growth.

The investors’ summit comes just two weeks after Morneau announced plans to launch the infrastructure bank next year, into which the government has promised to pump $35 billion over the coming decade.

The government also intends to create a new Invest in Canada Hub for attracting foreign investment and relax some restrictions on investment from outside the country.

The summit is being hosted by the federal government but BlackRock Inc., the world’s largest asset manager, organized the event. BlackRock’s legendary founder, Laurence Fink, was expected to be among the participants.

No specific projects have yet been identified for funding from the bank but Trudeau, Morneau and Sohi were expected to tell potential investors that toll bridges, energy grids and water systems could all be attractive investments for fund managers looking for predictable, long-term returns.

Morneau is to take the same message to the United Kingdom later this week. He’s making a speech at the London School of Economics and Political Science on Tuesday and is to speak Wednesday at the UBS European Conference 2016, also in London.

Caron noted that Morneau’s economic growth advisory council championed the infrastructure bank idea, and at least three of its members — BlackRock’s Mark Wiseman Dominic Barton, global managing partner of McKinsey and Company and Michael Sabia, president of Quebec’s powerful pension fund manager, the Caisse de depot et placement du Quebec — are all in the business of finding good investments with big returns.

Their companies stand to make “hundreds of millions, maybe even billions out of the returns of this scheme,” Caron said.

“I’d like to ask you, is our moral compass so distorted that we don’t even care that people can be appointed into powerful government committees and stand to gain from their advice?”

— With files from Joan Bryden in Ottawa

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