Canadian Manufacturing

Canadian pension funds have ‘huge advantage’ in U.S. infrastructure build

Dan Slane, a former member of Trump's transition team, said Canada's pension funds have the expertise and deep pockets to partner in projects such as airports, hospitals and transit

March 2, 2017  by Ross Marowits, The Canadian Press

Canadian investors are eagerly looking for infrastructure opportunities in the U.S.

MONTREAL—Canadian pension funds are well-placed to help rebuild America’s aging infrastructure, a former director of U.S. President Donald Trump’s transition team said.

“The Canadian funds have a huge advantage,” Dan Slane told reporters after speaking to a global infrastructure conference in Montreal.

He said funds such as Quebec’s Caisse de depot have the expertise and deep pockets to partner with local U.S. funds to invest in projects such as airports, hospitals and transit.

Slane, who is not involved in the U.S. administration but delivered a report identifying about 50 initial projects that should be funded, said he was disappointed that Trump didn’t provide more details in his speech to Congress on Tuesday evening about his US$1-trillion infrastructure project, including how much would be funded by taxpayers.


He believes the new administration is too overloaded dealing with promises to overhaul health care and taxes to deal with infrastructure. However, he said early spending on projects should be among the top priorities.

Infrastructure is the best way for Trump to achieve his goal of growing the economy and creating millions of well-paid jobs for Americans, especially those lacking the skills required in modern manufacturing, Slane noted.

Although there are more than US$2.5 trillion worth of projects available in the U.S., Slane said locking down global funding isn’t a problem. He noted that sovereign wealth funds from Saudi Arabia, Japan, Norway and China are all looking to invest in projects.

So too is the Caisse de depot, whose CEO Michael Sabia met with Slane on Tuesday to discuss its interest in expanding its global infrastructure investments.

Canada’s second-largest pension fund manager has created a subsidiary to invest in infrastructure projects around the world, including a $5.9-billion light rail project in Montreal that it will fund, own and operate.

Involvement of pension funds could help offset public resistance in the U.S. to having facilities like airports owned by for-profit private companies, Slane suggested.

“Pension funds, as I see it, are kind of quasi-government,” he said. “They have more of a duty to the public good.”

Meanwhile, the conference was told that Canadian investors, including those with not-as-deep pockets as pension funds, are eagerly looking for investment opportunities in the U.S., including through the use of public-private partnerships.

The P3 funding model is rarely used in the United States but has grown in popularity over the last decade in Canada.

“Ten years ago the Canadian market was nothing, it was much like the American market is today,” said Plenary Group CEO Brian Budden.

Transport Minister Marc Garneau, who addressed the conference, said he expects Canadian investment funds will be attracted to infrastructure projects on both sides of the border and will take advantage of the federal government’s proposed infrastructure bank and planned $180-billion of spending over 12 years.

Ottawa is contributing $35 billion to the bank and Garneau said he expects details will soon be released.