Canada to target pension funds for infrastructure funding, says Trudeau: Reuters

Canada will try to supplement planned government investment in infrastructure with funding from private investors and wants to make the projects attractive to pension funds, Prime Minister Justin Trudeau said on Wednesday.

Trudeau’s Liberals won an election in October on a promise to run three consecutive annual budget deficits of up to C$10 billion (US$7.9 billion) to help fund investment in the country’s infrastructure, and will seek to boost that expenditure with private funding.

“We will be trying to make it an attractive pitch for pension funds to decide to invest in. There is a lot of opportunity for global capital,” Trudeau said at The Economist’s Canada Summit conference in Toronto.

Bankers say private funding for the projects could amount to several times more than that from the public treasury.

Canadian pension funds such as the Canada Pension Plan Investment Board (CPPIB), the Caisse de depot et placement du Quebec (Caisse) and the Ontario Teachers Pension Plan are among the biggest infrastructure investors in the world, and the Canadian government would be keen to have them invest in the projects alongside international investors.

Traditionally, funds such as the CPPIB have been reluctant to back “greenfield” projects, which are built from scratch, because of their risk.

“We’ve got these very successful investors in Canada that invest in infrastructure around the world and yet have not found the projects in Canada of the scale that makes sense for them,” Finance Minister Bill Morneau said at the same conference. “We’ll need to ensure that there are appropriate risks and rewards for those investors,” he said.

Photo: Canada’s Prime Minister Justin Trudeau walks on the tarmac after arriving in Saint John, New Brunswick, October 17, 2015. Credit: Reuters/Chris Wattie