Prospect and Risk of Financing Canadian Infrastructures by Pension Funds

In recent years, pension fund investment has been widely touted as a viable alternative to public investment as a means of financing infrastructure projects. In Canada, the Government of Ontario and the federal Liberal Party have expressed interests in pursuing this model. Earlier this year, Québec made the unprecedented decision to transfer ownership and control of two major new infrastructure initiatives to its public service pension fund, if the pension fund paid for the projects.

This idea, however, requires a public-private partnership, an arrangement that has been often criticized for allegedly costing taxpayers extra money and undermining public interests. As an alternative, Ontario recently floated the idea of selling off part of its public utility, Hydro One, to raise money to spend on infrastructure.

My research aims to first explain why pension fund investment has emerged as a popular alternative source of financing infrastructure and why different governments have expressed varying levels of interest in this financing model. Second, I plan to compare benefits and costs of public- and private-sector infrastructure financing models.

PRESENTER:

Byoungjun Park
PhD Student, School of Public Policy and Administration