Canada Federal Lawmakers Consider Teaming With Pensions on Infrastructure

A line Canada’s federal budget reveals that lawmakers are considering selling and leasing stakes in the country’s infrastructure to public pension funds as a mechanism for infrastructure improvements, according to the Canadian Press.

Pension360 previously wrote that several of the country’s largest public pension funds – which are, not coincidentally, some of the largest infrastructure investors in the world, had an appetite for such an arrangement.

More from the Canadian Press:

A line tucked into last month’s federal budget reveals the Liberals are considering making public assets available to non-government investors, like public pension funds.

The sentence mentions “asset recycling,” a system designed to raise money to help governments bankroll improvements to existing public infrastructure and, possibly, to build new projects.

“Where it is in the public interest, engage public pension plans and other innovative sources of funding — such as demand management initiatives and asset recycling — to increase the long-term affordability and sustainability of infrastructure in Canada,” reads the sentence in the new Liberal government’s first budget.

[…]

Australia’s asset recycling model has been praised by influential Canadians such as Mark Wiseman, president and CEO of the Canada Pension Plan Investment Board.

“With growing infrastructure deficits worldwide … we often reference this model with our own government and others as one to follow to incent and attract long-term capital,” Wiseman said in prepared remarks of a September speech in Sydney to the Canadian Australian Chamber of Commerce.

Infrastructure investments are a strong fit for public pension funds because they are long-term and offer reliable, steady returns.