November 14, 2025

This is a story about pension funds, airports, privatization, and liberals reliving history.

It a nutshell, this story involves privatization to pension funds in an attempt to offset risk of desired investment in other "major" projects the government thinks will drive growth.

In response to the trade and investment war with the Americans, the left and the labour movement have promoted state-involvement in investing and operating productive aspects of our economy.

The idea is that Canada should not continue to rely on American private capital to invest. And, to expand sovereignty, Canadians strongly believe they need more democratic control over what and where investment should happen.

Carney and the Liberals are allergic to suggestions of expanded government. They are steeped in the ideology of neoliberalism and there are no parts of their economic theory that allows the contemplation of public direction of capital formation. And, all their friends are bankers.

Even industrial strategies are a step too far for this government.

So, what is their suggestion to fund expansion of investment in the things we need investment in to sustain our economy?

It seems like their answer is a rather complex scheme involving public pension funds, privatization, profit subsidies, and a strong belief someone else will solve the problem for them.

I suspect that the push to privatize airports floated in the budget is one significant of the program to get more pension money invested in Canada.

Pension funds have obligations to pensioners. Simply, they have a risk profile that they follow for investments and if they increase risk in one area of investment, they must decrease risk somewhere else. Not unlike most private pools of investment capital.

Carney's liberals (and indeed many governments before) have lamented the supposedly "low" level of investment these giant pools of capital invest in Canada. This concern is generally based on a misunderstanding of what a pension fund is as many in government (and labour) think it is "our" money they are investing.

Many folks think this because the money comes from the pockets of public sector employers (and supposedly public employees). This is an incorrect way to think about pension funds. They are not our money, we give these funds our money, but once it is invested it becomes private capital. All we are owed is what the contracts says: a pension (wage) if we live long enough.

As private investment vehicles regulated by government to live up to their obligations, pension funds invest broadly and for a long time frame. And, even more than many other types of pooled capital (like say, VC funds) they must live in the real world of returns on those investments.

Why does any of this matter for airports and privatization? Or, investing in Canada?

Canada is a poor place for investment if you are capital right now. Indeed, low levels of investment is the reason that we are even thinking about this topic.

There are many reasons this is the case:

1. The American empire has told capital that if it is going to invest, it should not invest in this country it should invest in the USA.
2. Export markets for Canadian goods are limited to the USA, so what the USA government says matters.
3. Profit rates and generated mass of profits are generally lower in Canada.
4. Productivity growth is lower (than the USA), meaning there are too many workers to pay per unit of output compared to other places.
5. There are too few people for the size of country to gain consumer-focused service economy growth.
6. There are too many unions undermining profit rates.
7. There is not enough fascism subsidizing profit rates in strange ways like many of our competing nations.
8. On the other side, there is no central planning driving a culture of over work or planning production targets.

So, if you are a (L)iberal, what is to be done?

Well, if you are a Carney Liberal it seems you take your misunderstanding of pension funds, an dogmatic ideological position that the government is only a drain on the economy, the bizarre idea that privatization generates growth, and wrap it all up in a re-branded, more complex version of 1990's public-private partnerships. You do this while promising Canadians you can spend less and invest more.

That is:

1. Privatize airports and other public infrastructure through a financialization program that acts as a profit subsidy.
2. Sell those newly minted shares to pension funds thereby reducing their investment risk profiles (because of the guaranteed profits from 1).
3. Write a law suggesting that pension funds "invest more" in Canada.
4. Announce large (mostly already completed) project and call them "Major Projects" with additional government profit subsidies.
5. Hope that pension funds use their new found wealth from profit subsidies to invest in those advertised major projects.

Let's call it the Shadow Profit Subsidy program.

You give a massive profit subsidy over here (airports, ports and other public infastrucature) talking about all the benefits of "privatization" and other failed neoliberal themes.

And, over there (mines, natural gas, hydro) you provide some turn-key investments in private capital projects.

Both result in the transfer of wealth from the public to the private sector and with a wave of the magic neoclassical invisible hand you get economic growth.

If only things were as easy as this in the real world.

The failure of the above program is based on two large things:

1. You cannot gain actual value by privatization, all that happens is you download that "profit growth" onto the public. That is called a (shadow) tax in polite circles. In labour we call it fees and wage suppression.
2. Pension funds are just private capital, so there is nothing special about a pension fund owning productive assets. Thus, if it is a good investment (because of subsidies and actual revenue) you end up just getting plain old regular private capital ownership. And, in Canada that means the American private (and now government) capital.

So, we end up back where we were in the early 2000s with Canada being even more dependent on the Americans and a loss of sovereign control over our critical infrastructure and our companies.