Do you know what it takes for a country to have a sovereign wealth fund like the federal Liberals announced on Monday?
It must have state assets.
Norway has the world’s largest sovereign wealth fund at almost $2 trillion (that’s just under Canada’s entire GDP). The structure has been based on the Nordic country’s oil revenues for more than 35 years.
There are three of them in China, each worth $1 trillion. Several Gulf states – Abu Dhabi, Kuwait, Qatar and Saudi Arabia – have national wealth funds ranging from $600 billion to over $1 trillion. And the city-state of Singapore has one that is expected to top $1 trillion sometime next year.
When comparing these real sovereign wealth funds with the one Prime Minister Mark Carney created on Monday, two things stand out.
First, they are huge compared to Carney’s $25 billion Canada Strong Fund. Norway’s fund is 80 times larger. The average of the others I mentioned above is 38 times higher.
But the other difference, which is even more significant, is that all other funds are asset-based. To finance the Canada Strong Fund, the Liberal government will have to borrow money and go further into debt.
Calling this fund a “wealth fund” is a propaganda ploy. But I think the more honest name “sovereign debt fund” doesn’t have the same oomph.
A Canadian sovereign debt fund would also attract fewer private investors than none. Conservative MP Michelle Rempel Garner said: “Mark Carney would not invest in Mark Carney’s new fund.”
So true. When Carney was in charge of Brookfield, one of the world’s largest investment houses, he would never have fallen for his own Canada Strong Fund ploy on behalf of his firm’s clients.
But I think the fact that the Canada Strong Fund is a hollow political move is appropriate because the Prime Minister said his fund would support the mega-projects being pushed by his Major Projects Office, which is itself a hollow, political move.
Meanwhile, the federal government has done little or nothing to address many of the non-tariff barriers to the Canadian economy, over which the federal government has far more control. And when it comes to reversing many of the economic disasters of the Trudeau era, forget it. They stay.
Canada’s inflation continues to rise. GDP growth continues to fluctuate. Living standards continue to fall below the levels of our G7 partners, particularly in the USA. For many Canadians under 40, home ownership is still out of reach. And our national debt continues to rise.
Carney has promised to cut red tape and eliminate interprovincial trade barriers that are holding back Canada’s economy. He repeatedly claims that we need to grow in order to reduce our dependence on trade with the Americans.
However, Canada’s political and media establishment is too fascinated by Carney’s vision of a new industrial world order in which Americans are not at the center, and too enthusiastic about his promises to rid us of the Orange Man in the White House, to delve deeply into his inability or unwillingness to undo the Liberal legacy of the last 11 years.
Thankfully, some industry leaders are not afraid to challenge the brilliant Prime Minister.
On Monday, industry groups from the forestry, oil and gas and automotive industries agreed that the federal Liberal’s environmental, domestic trade and labor policies, far from protecting Canada from Donald Trump’s silly trade policies, now cost Canada more than Trump’s tariffs.
Excessive regulation – particularly in the environmental sector – has cost Canada more than $1 trillion in lost investment since the Liberals took office in 2015.
Some resource projects require up to 400 separate permits, adding $1 billion or more to the total cost.
What makes Carney believe that a fake sovereign wealth fund will overcome the leadership weights that federal, provincial and local governments have become?
lgunter@postmedia.com
Related
Bookmark our website and support our journalism: Don’t miss the news you need to know – add EdmontonJournal.com and Add EdmontonSun.com to your bookmarks and Sign up for our newsletter.
You can also support our journalism by becoming a digital subscriber. Subscribers get unlimited access to The Edmonton Journal, Edmonton Sun, National Post and 13 other Canadian news sites. The Edmonton Journal | The Edmonton Sun