How private investment works in Canada’s infrastructure space

The Hub is my favourite conservative podcast. It is a deep dive into Canadian politics and policy from a conservative position, advocating market liberalization, small government. It is not overly consumed by culture war nonsense, and has done some excellent deep dive reporting on climate change and solutions.

That’s not to say that I agree with their perspective – in fact, I rarely do – but I never listen without learning something, especially when they talk to people who know what they are doing.

Today it’s about how very large institutional investors can play a role in helping to build the public infrastructure we need in Canada. It’s an illuminating conversation for me. Stephen Frank is the guest. He is the CEO of the Canadian Life and Health Insurance Association who represent companies with a trillion dollars invested in long term investments. Because they are a very highly regulated investor, the focus on very safe and reliable investments that provide long term returns through revenue streams or interest.

It’s worth a listen because these funds are big players in our public infrastructure and they do direct public policy. They lobby for more access to public projects and towards what they call “regulatory certainty.” That term does a lot of work. It can include opening up regulations that limit the amount of private investment in public infrastructure and it can also include certainty about long term processes like Indigenous consultation and environmental regulations. But it can also mean things like certainty about outcomes, meaning that these investors may also desire a guaranteed return on their investment. That could mean procuring guarantees that municipal governments won’t cap water rates, for example, if it means not fulfilling a promise for a certain volume of returns from an investment. IN a little community like ours, that could be a nightmare.

They are also lobbying to consider things like data centres as public infrastructure even though there is no public money behind these things. It makes sense, in that these are things we need to form the substrate of how we connect in the world, but it introduces a whole other level of what we think of as public: infrastructure that exists to provide both a service and a return on investment. The service can be minimal and the return ideally is maximal, especially for the primary investor like Google. This is what leads to enshittification. The World Wide Web is a perfect example of what happens when a certain standard is not adhered to while investors continue to squeeze more and more money out of users. In Canada we feel this through telecommunications, where we pay amongst the highest rates in the world for an infrastructure that used to be highly regulated and in many cases publicly owned. It is now almost entirely private, yet still allows to essentially operate as a monopoly.

So have a listen to this podcast because I think anyone who has a stake in public infrastructure – including water, roads, bridges, ports, energy, transmission, and land – might benefit from having a slightly broader view about how these things are funded, who is exerting pressure on our governments to create policy regimes, and for what ends they are doing it.