Business
As Ottawa meddles with pension funds, Albertans should consider provincial pension plan
From the Frontier Centre for Public Policy
Who Should Control Canada’s Pension Wealth?
Ottawa wants to compel large pools of Canadian money to be invested in Canada, instead of allowing investment funds to find the best return for Canadian investors.
Last week, another scandalous and potentially corrupt string of federal activities popped up.
This one has deep implications for pension plans in Canada, including the debate about an Alberta Pension Plan. Mark Carney’s double game of politics and profit enhances the drive to patriate Alberta’s pension wealth.
At issue is a report in the media saying that Brookfield may be looking to raise a $50 billion fund with contributions from Canada’s pension funds and an additional $10 billion from the federal government.
This report has drawn significant attention for several reasons. Toronto-based Brookfield is one of the world’s largest alternative investment management companies, claiming about one trillion in assets under management. Their portfolio spans real estate, renewable energy, infrastructure, and private equity, making them a significant player in domestic and international markets. The magnitude of Brookfield’s investments places them at the forefront of global financial movements, giving considerable weight to any fund they propose to establish.
The second reason is that Finance Minister Chrystia Freeland and Prime Minister Justin Trudeau have voiced their ambitions to boost home-grown investments. One of the government’s strategies includes tapping into Stephen Poloz, the former Governor of the Bank of Canada. Poloz succeeded Mark Carney as the head of the bank. The Liberal government has tasked Poloz with leading a working group to identify “incentives” that would “encourage” institutional investors to keep their capital in Canada.
Moreover, Finance Minister Freeland has suggested implementing new regulations to ensure that more of Canada’s substantial pension fund reserves, which amount to an impressive $1.8 trillion, are allocated toward Canadian ventures. This comes when a staggering 73% of Canadian pension funds are invested abroad.
On its face, a plan to invest more Canadian wealth in Canada might sound reasonable. However, the plan avoids the crucial question of why money experts prefer investing outside Canada. Considering that question, one must consider the Trudeau government’s economic record.
Put differently, Ottawa is looking for ways to compel large pools of Canadian money to be invested in Canada instead of allowing investment funds to find the best return for Canadian investors. Those large cash pools typically belong to hard-working Canadians, such as teachers’ pensions. They would be forced to earn less for their pension money.
Forcing such large sums to remain in Canada would mask the continuous slump in productivity in the Canadian economy.
Given current economic policies and layers of taxation that do not exist elsewhere (such as the unpopular carbon taxes), Canadian companies are less competitive. Forcing pools of money to stay in Canada rather than seeking the best return for their clients offers an artificial boost that makes Ottawa policies seem less harmful.
It is, therefore, a politically motivated move. That level of government intervention historically always results in disastrous consequences. Politics directing traffic for the movement of capital rarely achieves good outcomes. The real issue is sagging productivity.
But that is only half the problem. The other significant issue is ethics.
Prime Minister Trudeau has recently named Mark Carney as his special economic advisor. Carney is the Chair of Asset Management and Head of Transition Investing at Brookfield. The Brookfield website shows Carney is responsible for “developing products for investors.” Carney is also the most mentioned name among people likely to succeed Justin Trudeau as leader of the Liberal Party of Canada.
In short, the man who closely advises the government of Canada on how to compel gargantuan pools of money to be invested in Canada conveniently oversees the development of the “product” for the private Toronto firm, through which that money would be forced to be invested in Canada. Furthermore, the same firm reportedly seeks (read lobbying) from the federal government an infusion of $10 billion for the new fund.
As a Liberal and a potential party leader, given Justin Trudeau’s fortunes, Mark Carney could become prime minister in the immediate future. This means that Carney would benefit from creating new rules forcing investment money to stay in the country in two ways: As a leading man at Brookfield, Carney and the firm stand to make tens of millions from the policy. Second, as a carbon tax enthusiast, once squarely in political office, Carney would benefit from masking the ill, underproductive effects of the radical green agenda and carbon taxes he supports.
When Alberta progressives oppose the desire of many Albertans to patriate Alberta pension funds to the province, they cite concerns that the province might use the funds for political purposes, undermining the maximum return. This is not an outlandish concern, in some respects, given the history of the Alberta Heritage Fund.
However, it is not an exclusive danger inherent to the Alberta government. It does not warrant the presupposition that the federal government is a better steward of Alberta’s pension wealth, as demonstrated by the developments above. All things being equal, and unless human nature is outlawed by federal statute, the risks are the same.
But if something goes wrong with Albertans’ pension wealth, would they rather deal with people in Alberta than people in Ottawa, half a continent away Raising Alberta voices in Ottawa when Ottawa has been bent on doing the opposite of what is good for Albertans has never produced good results or reversed the nefarious effects on Albertans.
Ottawa politicians will do what is best for Laurentians every single time. The history of the Dominion, from the national policy to Crow rates and the National Energy Policy to Carbon Taxes, shows Ottawa policies always favour vote-rich Laurentia first and foremost.
Mark Carney’s product development for Brookfield shows, at worst, that Alberta’s pension wealth is just as much as risk with federal policies driven by political motivations. This one would be doubly bad because it is meant to serve and benefit Carney and his Bay Street friends as much as it is designed to help his future colleagues in Ottawa. And on both counts, Carney would benefit as a financier and politician.
Albertans should take their money and run.
Marco Navarro-Genie is Vice President Research with the Frontier Centre for Public Policy. He is co-author, with Barry Cooper, of COVID-19: The Politics of a Pandemic Moral Panic (2020).
From Resource Works
By Geoff Russ
For major projects, what is old is new again
Prime Minister Mark Carney’s second wave of “nation-building projects” sounds transformative: six new energy and mining proposals, plus a northern corridor, added to the first tranche unveiled in September, and included in the freshly passed federal budget for the fiscal year.
Together, Ottawa says, they amount to more than $116 billion in investment and are central to “realizing Canada’s full potential as an energy superpower.” That is the pitch in the federal news release.
Look closely, though, and a different picture emerges. For major projects, what is old is new again. Almost every file now being “fast-tracked” was already on the books, sometimes for a decade or more.
The new referrals to the Major Projects Office (MPO) are all familiar: the Nisga’a-led Ksi Lisims LNG terminal on B.C.’s north coast; BC Hydro’s North Coast Transmission Line; Canada Nickel’s Crawford project near Timmins; Nouveau Monde Graphite’s Matawinie mine north of Montréal; Northcliff’s Sisson tungsten project in New Brunswick; and the Inuit-owned Iqaluit Nukkiksautiit hydro project in Nunavut. The “Northwest Critical Conservation Corridor” in B.C. and the Yukon is added as a long-range concept.
Long timelines and longstanding obstacles
None of these is a fresh idea. As the Globe and Mail notes in a project-by-project rundown, Ksi Lisims has been in development for years and already faces two Federal Court challenges from nearby First Nations and opposition from Wet’suwet’en hereditary leaders who fought Coastal GasLink. The North Coast Transmission Line was identified in 2023, with B.C. legislation to fast-track it and term-sheet co-ownership deals with First Nations already in place. The Sisson mine has been stalled at the pre-construction stage for more than a decade, despite earlier approvals and new public money to update its feasibility study.
Iqaluit hydro is hardly a novelty either. As Globe reporting shows, dam concepts near the city have been studied since the mid-2000s, with the current Inuit-owned proposal building on that earlier work and backed by federal engineering funds. The Crawford nickel project was acquired in 2019 and has spent years lining up investors and a complex financing stack, documented in both CBC and Financial Post coverage. Matawinie received its Quebec authorization in 2021, has an impact-benefit agreement with the local Atikamekw Nation and now enjoys federal price-floor guarantees on graphite.
The first tranche, announced in September, follows the same pattern. LNG Canada Phase 2 in Kitimat, new nuclear at Darlington, Contrecoeur container capacity at the Port of Montréal, McIlvenna Bay in Saskatchewan and the Red Chris expansion in B.C. were all in various stages of planning long before Carney entered office. The MPO is not inventing a new project pipeline; it is trying to accelerate the one Ottawa already had.
Acceleration is the point — and industry welcomes it
Acceleration is, to be fair, the point. The Calgary-based MPO, led by former Trans Mountain head Dawn Farrell, is designed to run permits in parallel, not one after another, and to coordinate financing through bodies like the Canada Infrastructure Bank and Canada Growth Fund. Farrell told CBC that work which might have taken “five or six more years” could be cut to roughly two. In a country where large projects regularly die of regulatory exhaustion, that is significant.
Industry likes the signal. Canada Nickel CEO Mark Selby says MPO referral “puts us in the fast lane,” even without the more controversial “national interest” label in Bill C-5 that would allow cabinet to set aside parts of the Fisheries Act, Species at Risk Act or Impact Assessment Act. Inuit proponents of the Iqaluit project welcome Carney’s description of their hydro plan as a breakthrough for Arctic sovereignty, replacing millions of litres of diesel.
But a superpower strategy this is not
Still, if this is what becoming an “energy superpower” looks like, it is a modest start.
Notably absent from Carney’s list is any new oil pipeline. Alberta Premier Danielle Smith has spent months pushing a concept for a bitumen pipeline from the oil sands to the northern B.C. coast, doing provincial groundwork in the hope a private proponent will one day take it over. A BBC report sets out the feud with B.C. Premier David Eby, who dismisses the idea as “fictional” and “political” and insists no company wants it, accusing Smith of jeopardizing B.C.’s LNG ambitions. Smith has called that stance “un-Canadian.”
Western frustration is growing. In the National Post, Whitecap Resources chief executive Grant Fagerheim warns of “fury from Alberta and Saskatchewan” if a pipeline to tidewater is never prioritized and argues producers are tired of a U.S.-dominated system where Canadian barrels sell at a discount while others capture the margins. He favours an energy corridor carrying oil, gas, power and rail, not just more rhetoric about nation-building.
Northern ambitions lag behind rhetoric
Another gap is the North. The Indigenous-led Arctic Gateway partnership, Manitoba and Ottawa are already spending heavily on the Hudson Bay Railway and planning new storage and loading systems to expand the Port of Churchill for grain, potash, critical minerals and Arctic resupply. Carney talks up a “huge host of opportunities” in northern Manitoba, but Churchill sits only on the MPO’s lower-profile “transformative strategies” list, with a full plan now pushed out to 2026.
Meanwhile, the one project that has fundamentally shifted Canada’s oil export position is the long-delayed Trans Mountain expansion. As Resource Works points out, TMX now sends diluted bitumen from Burnaby to Asia, shrinking the old “captive discount” and giving Canada genuine leverage in global markets. But TMX predates Carney’s government by more than a decade and only exists because Ottawa nationalized a struggling private pipeline to get it built.
Evolution, not revolution
Carney’s major-projects push is real, and for the companies involved, the prospect of faster permits and clearer federal backing is very good news. Yet for a government that talks about mobilizing a trillion dollars and remaking Canada as an energy superpower, the current list is evolutionary rather than revolutionary. For now, Ottawa is mostly trying to build what was already on the drawing board. The tougher choices on pipelines, ports and interprovincial trade still lie in front of it.
Headline photo credit to THE CANADIAN PRESS/Adrian Wyld
From the Fraser Institute
By Jason Childs
From 2015 to 2024, the government sector in Canada—including federal, provincial and municipal—added 950,000 jobs, which accounted for roughly 30 per cent of total employment growth in the country, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“In Canada, employment in the government sector has skyrocketed over the last 10 years,” said Jason Childs, a professor of economics at the University of Regina, senior fellow at the Fraser Institute and author of Examining the Growth of Public-Sector Employment Since 2015.
Over the same 10-year period (2015-2024), government-sector employment grew at an annual average rate of 2.7 per cent compared to only 1.7 per cent for the private sector. The study also examines employment growth by province. Government employment (federal, provincial, municipal) grew at a higher annual rate than the private sector in every province except Manitoba over the 10-year period.
The largest gaps between government-sector employment growth compared to the private sector were in Newfoundland and Labrador, New Brunswick, Quebec and British Columbia. The smallest gaps were in Alberta and Prince Edward Island.
“The larger government’s share of employment, the greater the ultimate burden on taxpayers to support government workers—government does not pay for itself,” Childs said.
A related study (Measuring the Cost to Canadians from the Growth in Public Administration, also authored by Childs) finds that, from 2015 to 2024, across all levels of government in Canada, the number of public administrators (many of who
work in government ministries, agencies and other offices that do not directly provide services to the public) grew by more than 328,000—or 3.5 per cent annually (on average).
“If governments want to reduce costs, they should look closely at the size of their public administration,” Childs said.
Examining the Growth of Public Sector Employment Since 2015
Jason Childs
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