PM Trudeau sells stability, long-term growth potential to investors

TORONTO—Canada has no reason to worry about competing with the United States under incoming president Donald Trump when it comes to attracting international money for infrastructure, Prime Minister Justin Trudeau said Monday.

Speaking after a meeting with some of the world’s wealthiest investor groups, Trudeau said Canada would have no trouble keeping up with the U.S. when it comes to luring in capital—it’s just a matter of making sure the world’s would-be investors are aware of its potential.

He repeatedly touted Canada’s “stability” as a selling point, indirectly drawing attention to the political upheaval south of the border following the unexpected victory last week by the bombastic, protectionist, unpredictable Trump.

“I’m not worried about competing,” Trudeau told a news conference. “Canada, with its economic, fiscal, political, social stability, is an extremely attractive place to do business (and) place to invest for global capital.”

Trump has vowed to pump $1 trillion over 10 years into making America’s infrastructure “second to none,” through public-private partnerships and tax incentives to encourage private investment.

Trudeau is looking to attract some of the same global investors.

International investors, with their “tremendous amount” of money, he said, are looking for low-risk opportunities; all Canada needs do is highlight its long-term growth potential, lack of red tape and educated workforce.

Trudeau and members of his cabinet attended the meeting with two dozen representatives of large international pools of capital worth as much as $21 trillion. Those at the table represented central banks, sovereign wealth funds, insurers and pension funds, including the China Investment Corp., Abu Dhabi Investment Authority, Qatar Investment Authority, the Hong Kong Monetary Authority, one of four Swedish national pension funds, the Norwegian pension fund and Singapore’s sovereign wealth fund.

The summit, organized by financial powerhouse BlackRock Inc., came just two weeks after Finance Minister Bill Morneau announced plans to launch an infrastructure bank. The government is promising to pump $35 billion into the bank over the coming decade. It also plans to create an Invest in Canada Hub to lure investment, and to relax restrictions on foreign investment.

Discussions with investors and experts are ongoing to make sure the bank, which should be up and running next year, can do its job, Trudeau said. While no specific projects have been identified, Trudeau said transportation and energy grids, water systems and green energy are all areas of interest.

Trudeau began his infrastructure investment pitch earlier in the day to Canadian financial representatives at another 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.

“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 the proposed infrastructure bank, designed to leverage $4 to $5 in private money for each $1 the federal government puts in. Trudeau never mentioned privatization during last year’s election campaign, Caron said.

In addition, companies will want a return of as much as nine per cent, which would force people to pay tolls and user fees and end up costing taxpayers more than twice as much, he said.

“They won’t do it out of the goodness of their hearts,” 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 acknowledged some don’t like the user-pay idea.

“There are many different models to look at,” he said. “Obviously, Canadians have very strong feelings about various models and we need to make sure that we are responding to Canadians’ concerns.”

Monday’s earlier meeting included top executives from Canada’s big banks, insurance company giants, and the country’s largest pension funds and asset-management firms. Morneau and Infrastructure Minister Amarjeet Sohi were on hand, as were their transport and natural resource colleagues. Morneau now heads to the U.K. this week to continue the investment sales job.

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