OTTAWA – The federal Liberals have revealed more details about how they would boost infrastructure investment if elected — a proposal that would seek to entice large private pension funds to finance small-town projects.
The Liberals have come under attack in recent days from the Conservative government, which accuses them of plotting to use the Canada Pension Plan as a source of cash for their infrastructure promises.
Such a scheme would threaten to undermine the independence of the public pension plan, Finance Minister Joe Oliver warned.
But Liberal MP Adam Vaughan insisted Monday in an interview that the party is only proposing to help communities secure infrastructure cash by working with private pension funds. The party would, he added, avoid mandating or encouraging CPP on any of its investments because of conflict of interest concerns.
Infrastructure is becoming a key issue heading into the October election. It was prominent during last weekend’s Federation of Canadian Municipalities conference in Edmonton, where the major parties made their pitches to community leaders.
At the event, Oliver maintained how the Harper Conservatives expanded investments in cities, bringing the average age of core infrastructure to under 15 years today, compared to 18 years in 2000.
NDP Leader Tom Mulcair pledged to give municipalities an extra penny from the existing gas tax, providing an extra $1.5 billion each year for roads, bridges and other infrastructure.
Liberal Leader Justin Trudeau has also promised to invest in infrastructure and, in a speech Friday, he said one aspect of the party’s plan would “mobilize alternative sources of capital, such as pension funds.”
On Monday, Vaughan went further, saying a Liberal government would help rural communities attract the attention of huge private pension funds, which typically watch for multibillion-dollar investment opportunities, by combining their infrastructure needs into bigger packages.
“You have to bundle them into that stratosphere in order to get those funds to participate,” said Toronto MP, who predicted smaller communities would save money by benefiting from lower rates.
The federal government would provide added security by backing up the loans, he added.
Since cities have the stability of defined revenue streams, he argues there would be little risk for the federal government and a tempting opportunity for big funds.
Vaughan added that some of the country’s private pension funds have invested more cash in infrastructure projects abroad than at home.
“We do know that there are partners just down the street and around the corner that are ready to do work around the globe and they’re not doing that work in Canada,” he said.
“We think there’s a real opportunity here to get that money spent locally.”
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