Mark Carney looks for investment the Liberal way

Open this photo in gallery:Prime Minister Mark Carney speaks during an announcement on the Canada Strong Fund in Ottawa on Monday.Justin Tang/The Canadian PressShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountFor all the talk that Prime Minister Mark Carney is a small-c conservative his announcement that Canada will create a sovereign wealth fund was a confirmation of his capital-L Liberal predilections.The form of the fund might be a little surprising, given that the sovereign wealth funds of resource-rich nations are usually seeded with windfall earnings socked away for the future, while Canada will have to borrow more to invest more.But Mr. Carney has more or less been telling us he favours this kind of thing since he entered politics, and when he ran in the federal election campaign last year, he did so with a warning about the dark clouds gathering over the Canadian economy.He warned then, repeatedly, that private investors would tend to sit on the sidelines during a trade war, so public capital would have to step in. Carney says sovereign wealth fund will ensure all Canadians reap rewards of major projectsHe wasn’t just talking about deficit spending to boost economic activity. He was asserting that the government must pour money directly into private business projects, and use that to lure other investors, because the private sector will be hesitant.Mr. Carney’s investment-banker and central-banker background has been evident in his calculation that the immediate trade-war imperative for the Canadian economy is bolstering investment.He spent a lot of his first year in office trying to drum up investment as he toured foreign countries including, not coincidentally, Qatar and the United Arab Emirates, which both have wealthy investors and sovereign wealth funds. He has also convened a major investment sales show in September.That’s certainly a different approach from his predecessor, Justin Trudeau. Yet the big-L Liberal love for creating big funds and big labels is something Mr. Trudeau shared. It has become a Liberal modus operandi, and Liberal math: Creating a fund equals addressing an issue.Mr. Carney’s new Canada Strong Fund will sit beside the Canada Infrastructure Bank, which was set up in 2017 and has a mandate to deploy $45-billion for loans and equity to finance infrastructure projects, and the Canada Growth Fund, a $15-billion green technology fund first announced in 2022. Opinion: To make the Canada Strong Fund work, look to Quebec’s example, not Norway’sIt’s certainly no coincidence that Mr. Carney’s new fund is named for his Liberal political slogan, Canada Strong. It’s probably also no coincidence that this vehicle was embraced by a Prime Minister with experience setting up investment funds, as he did in his last private-sector job at Brookfield Asset Management.Its creation also highlights the gulf in fiscal philosophy between his Liberals and Pierre Poilievre’s Conservatives, at least when it comes to coping with the economic threats of a trade war.Mr. Carney is deploying public money to replace and hopefully leverage private investment. Mr. Poilievre’s prescription to spur investment is to cut taxes and loosen regulation, especially environmental regulation. On Monday, speaking to reporters, Mr. Poilievre argued there is no reason to deploy public funds to invest in business projects.“If a project has a business case, why would the government need to fund it?” Mr. Poilievre said.…

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