back
116 comments
This makes sense once you see the list of Canadian companies

https://en.wikipedia.org/wiki/List_of_largest_companies_in_C...

#1 is Brookfield Corporation.

The now prime minister of Canada headed the ESG there. He is also an international central banker.

I guess we shouldn’t do anything because Brookfield exists.
I guess we should do stupid corrupt things because Trump exists.
Wow! This guy knew a lot about working in an environmental/social/governance framework, AND he knows enough about money to have been an international central banker?

I knew Carney was great, but I didn't know he was so well-qualified too.

Carney was the governor of the Bank of Canada through the financial crisis and Canada was one of the least affected developed countries. To be fair, Canada’s insular banking system also helped limit exposure, but Carney’s handling of the situation was good enough that the UK made him the first non British governor of the Bank of England, during which period he oversaw the whole Brexit saga, where again his handling of the UK economy was extremely highly regarded.

There are justifiable question about whether he will be a good PM but he is probably one of the most successful central bankers of all time.

https://en.wikipedia.org/wiki/British_Columbia_Resources_Inv...

Hopefully turns out better than BCRIC.

One of the biggest challenges is finding investable projects these days. If they put this money in as a hold to time projects well than could be a good future asset for Canada. If it ends up actually being more of a jobs production vehicle for political gain then probably less successful.
laudable goal. I suspect it will end up like most other Canadian procurement projects.

also why all the love for Canadian Pacific rail?

>also why all the love for Canadian Pacific rail?

The Canadian Pacific rail connected the country east to west, was a major milestone in the country's history: <https://en.wikipedia.org/wiki/History_of_the_Canadian_Pacifi...>

While that's true, it does seem to be a strange thing to glamorize now, since as much as it was an engineering accomplishment, it was also arguably a genocidal pursuit, and it's doubtful the sort of projects the government has in mind now will be as "nation building" as expropriating the entirety of Western Canada and letting a single private entity have as much power as CPR does.
Why is HN so pessimistic?
The parent comment just says it'll perform similar to how past similarly-shaped things performed, without saying what that past performance is. If that implies pessimism, that's not HN's fault.
Is setting expectations based on track record considered pessimism?
That says "laudable" not "laughable." They were actually complimenting the effort, even if some folks misread it
It's the default for any non USA story.
This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment.

Whether its perfect or not, it almost has to be better than the current status quo.

How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

Are they going to fund their "wealth" with debt?

This is an oxymoron.

You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually.

And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with...

Norway gets to have a wealth fund because they have a small population with a massive amount of oil revenue, and they aren't run by morons.

Canada only produces about 2x as much oil as Norway, but it's got 10x the population. Sorry, you can't all be rich like Norwegians unless you start pumping 5x more oil.

Things like this should be laughed off the world stage.

We live in an upside down world.

>How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

This seems to be incorrect. Including federal, provincial and local, the debt is about 110% of the GDP.[1]

The US has 3x more debt per citizen than Canada.

[1] https://www.imf.org/external/datamapper/GG_DEBT_GDP@GDD/CAN/...

> How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

https://en.wikipedia.org/wiki/Canadian_public_debt this article says it's 57% of GDP. Where are you getting your 300% from?

> You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually.

I'm not sure the simile lands. If that $1M is financing a lavish lifestyle, then you are for all intents and purposes rich. As for the crushing down part, the modern economy shows us one can stay solvent longer than the market is irrational (especially true the more zeros are added to the numbers above).

GDP isn't wealth. This is closer to making $1M/year and owing $4 million.
GDP isn't the only measure of wealth. Canada has vast resources that act as collateral for the debt. You wouldn't be friends with a billionaire who only owns stock and lives mostly off the debt issued against that stock?
Canada has tens of trillions of dollars in natural resources it could choose to monetize at any time.
A sovereign wealth fund makes sense if fund with profits from exploiting our natural resources.

That is how Norway did it

And Norway has north of 2 trillion in that fund for about 5M people...

Like, well done. Impressive financial planning at that scale

Yep. Long term greedy nation taught by the best at Goldman Sachs. Thank you guys!
Norway extracts 1/2 oil as Canada but has 1/8 the population. Canada too big to be petro state. Canada has lots of other resource endowments, but not enough to sustain norway tier of per capita sovereign fund returns even if it massively increased extraction game. Only hope for Canada is US being really friendly, or even more friendly and force Canada to retool internal trade / reduce braindrain and build and capture more value in commodities and other sectors.
A sovereign wealth fund requires surpluses to be run.

This is not a wealth fund at all. This is a debt fund. It doesnt even try to hide the debt that's drowning the federal government.

We are borrowing money to play the stock market.

This is exactly what I was thinking when I heard him speak about it. Borrowing for a slush fund for the projects (probably many of them American) they want to push... which in a way just means another future tax.

Calling it a "sovereign wealth fund" doesn't seem honest at all. (coming from a lifelong Liberal / NDP voter)

If this is run anything like the CPP, it will underperform both the market and their own benchmarks yet lead to executives awarding themselves huge bonuses.
Over the last decade (and even prior to that) CPPIB has been the best performing fund of its kind. National pension funds have different risk tolerances and investment guidelines that someone's personal portfolio or a family office.

Thanks to CPPIB, Canada does not have have a giant unfunded pension liability (unlike our neighbors to the south). It has been an enormous success story.

That seems fine as long as they can show lower volatility than market while still being close in return?

Did they?

In contrast, the PSPF (federal public sector pension) has over-performed.
different risk profile
Usually a sovereign wealth fund is funded by excess profits, like Norway for example. In this case, it's being seeded by $25 billion dollars of debt. Can anyone more financially gifted explain how this is any different from, well, regular government spending and money printing?
Yea really. Feels like a bit of a communications exercise and effort to create arms length distance from the Federal government and spending on major projects.

Now it's not the Federal government and taxpayers propping up the oil industry by buying yet another oil pipeline, but rather a "sovereign wealth fund" (funded by Canadian taxpayers).

>Usually a sovereign wealth fund is funded by excess profits, like Norway for example.

If Canada ran resources like Norway does, it would have an enormous "excess profit". Norway's royalty rates and "profits" are dramatically higher than Canada where decades of American psyops fooled a bunch of very foolish people that the primary purpose of Canada is to ensure maximum profits for US orgs.

But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be.

Only in that it's in a private equity fund, not one-time spending.
Doesn't that has the problem of over exposing canadians to canada economics from an enormous an investment perspective?

I guess it benefits my kids though

There are multiple types of sovereign wealth fund associated with taxes on resource extraction. The type you see in Norway is used to shelter the economic diversity, currency, and labor force from the steamrolling impact of the extractive industry. The type you see in Saudi Arabia, which has no such diversity and where basically all employment is tied to oil through few degrees of separation, is basically a slush fund for long-term infrastructure projects that would not otherwise be approved because of their size in relation to the secular economy, whether those are profit-generating enterprises like harbors or not-for-profit ones like roads.

Both aim to take today's windfall and spend it on something other than hookers and blow.

Norway still does have some totally unjustifiable passion projects, like the coastal highway it's building, but it's doing this from general funds to keep the wealth fund separately managed as a giant pile of investment money that just happens to belong to an investor called 'Norway', while in Saudi Arabia it is an instrument of policy.

I think the thesis is it's not solely about returns. Get a 7% return investing a dollar domestically, plus add a taxable dollar to economy (and some recurring benefit to tax base) beats getting a 9% one-time return investing internationally.
I believe wealth taxes (really, wealth restitution) should go into sovereign wealth funds - not least as then the public can see how that money is working for them, and so support the continuance and expansion of such taxes.
Agreed, we should also nationalise resource extraction and put the funds in there. Canadian resources should be for Canadians.
More importantly - revenues from the funds should be used for reducing income taxes. That's how you get broad-based public support for wealth taxes.
Submarine nationalisation/communism. Just use a wealth tax until the wealthy don't own anything. Please ensure you simultaneously destroy any self-made businesses.

No country requires business growth or an economy /s.

If I understand democracies, the private sector get easy access to credit via the creation of debt. You win you win. You win we lose. but also get money invested on behalf of the tax payer.

The market economy is brilliant.