If you think that Neo-liberalism is on life support in Canada, take a look at the Trudeau government's proposed infrastructure bank. Linda McQuaig writes:
The bank is being presented to the public as a way to attract billions of private sector dollars to help pay for our public infrastructure.But the bank’s unusual design will also, for the first time, give powerful private institutional investors — even foreign-owned entities — the opportunity to actually own important pieces of Canadian infrastructure, with the ability to charge us fees for using them.
That's a radical departure from the way we used to think about infrastructure. We used to think that we, the citizens, owned the nation's infrastructure.
But big institutional investors — pension funds, mutual funds, investment banks, etc. — are looking for investments that are safe and produce a reliable revenue stream.Nothing fits that bill better, in these days of volatile markets, than investing in infrastructure, as a 2015 report by Wall Street giant JP Morgan documented. The report noted that, compared to other investment options, infrastructure assets offer very high returns, at very low risk, that they operate in monopoly situations free from competition and provide reliable revenue, even during economic downturns. “Infrastructure assets have produced stable, predictable and growing returns,” concluded JP Morgan.
Trudeau will attract big money to the bank. But, McQuaig writes:
While the investment community’s enthusiasm for Canada’s new bank is clear, it’s less clear what’s in it for Canadians.When tolls and user fees are added in, privately owned infrastructure could cost us more — and we’d own nothing.Whether privately or publicly owned, Canadians will still end up paying for these assets, note analysts Azfar Ali Khan and Randall Bartlett in a report for Ottawa’s Institute for Fiscal Studies and Democracy. “[T]his does beg the question: Why would Canadians want to sell their most valuable assets to the private sector?”
We could own our own infrastructure through our own taxes. And borrowing costs are very low:
Now more than ever, there’s good reason to do so: Ottawa can borrow money at very low rates, much lower than the private sector. “With yields on 30-year Government of Canada bonds currently sitting around 2.2 per cent, the federal government can almost literally get ‘money for nothing,’ ” Khan and Bartlett note.
But "tax" is a dirty word. Neo-liberalism is very much alive and well.
Image: CUPE
