Prime Minister Mark Carney’s investment summit went off as expected. Big fund managers from around the world attended. Canadian politicians tripped over themselves to attract their funds. Carney got headlines about the massive investments being pledged. He also used the event to make an excellent announcement: pro-investment tax reforms. It would have been good to see those reforms two years ago, but they are all the more valuable now.
When the prime minister holds an investment summit, all the big Canadian money managers have to show up, and they did. The Alberta government’s money manager, AIMCO, was well-represented. Canadian companies hoping to attract investment also had to show up. Canadians can only hope that most of the planned investments actually occur. Corporate investment, particularly foreign investment, has been lacklustre or negative for more than a decade now.
The Hub’s co-founders, Sean Speer and Rudyard Griffiths, have made a solid case for the economic problems that will come with “Carney-nomics.” When capital is forced to cooperate too closely with the government—any government—the combination dampens the energetic, nimble, defiant energy of a freer market. That smothers growth and opportunity. Conservatives used to bemoan “Euro-sclerosis.”
Creating a single, continental free trade zone across the advanced economies of Europe should have powered the EU to global economic dominance. Instead, when all major investments need a political nod and constant political supervision through government financial stakes, even continental free trade is not enough to drive growth. The Hub is right to wonder why anyone would want to follow that model.
But the political damage of Euro-sclerosis is worse than the economic. Drawing more and more economic levers into government hands flattens the scope for political competition. Money managers investing their cash and firms seeking those investments have to dance to the government’s political tune as well as its economic one.
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Prime Minister Mark Carney’s investment summit attracted global fund managers and Canadian politicians eager to secure investments. The event highlighted pro-investment tax reforms, although critics warn that “Carney-nomics” could stifle market growth by increasing government control over capital. Ian Brodie discusses the potential political implications of intertwining economic and political interests, drawing parallels to the U.S. defence industry. He suggests that the current trajectory may lead to a loss of political competition and calls for a reevaluation of government-managed investment funds to enhance economic freedom and returns.