The Blueprint: Canada's Conservative Podcast - Another Liberal scheme. Another bill for Canadians.

00:00:00.000 Hello and welcome once again to The Blueprint. This is Canada's Conservative Podcast. I'm your

00:00:07.760 host, Jamie Schmael, Member of Parliament for Halliburton Cawortha Lakes, with new content for

00:00:11.600 you every single Tuesday, 1.30 p.m. Eastern Time. Don't forget to like, comment, share, and subscribe

00:00:16.500 to this program, because I guarantee you this message you are hearing is something you're

00:00:20.820 probably not hearing in depth or seeing in depth in the national media. So, on today's show, we are

00:00:26.540 talking about the Sovereign Wealth Fund, the Sovereign Debt Fund, as some are calling it.

00:00:32.340 And to take a deeper dive, we bring on the one and only Pat Kelly, the Member of Parliament for

00:00:37.040 Calgary Crowfoot, to tell you a bit what it is, what it isn't, how we go from here. Thanks for

00:00:41.740 coming on the show. Oh, thanks for having me, Jamie. It was a pleasure. All right. The Sovereign

00:00:46.160 Wealth Fund. I'm sure many have heard or seen it in the paper or heard it on the broadcast.

00:00:51.700 what the heck is it? What have the government announced? And then we'll get into what it

00:00:57.820 doesn't do. Give us an example. Yeah, well, look, so they announced this. They called it a sovereign

00:01:03.320 wealth fund, but it is not a sovereign wealth fund. It is a sovereign debt fund. The money,

00:01:08.220 the public money going into this fund is 100% borrowed. Canada does not have a surplus.

00:01:13.700 Sovereign wealth funds are where countries with a surplus invest their surplus. They're exporting

00:01:20.080 their inflation. That's what countries like Norway that have enormous wealth generated from

00:01:26.240 resource extraction, that's how they cope with imbalances in their own economy from

00:01:32.900 the surpluses that this wealth creates. So that's why they have a sovereign wealth fund. We do not

00:01:39.260 have a surplus in Canada. We have an enormous deficit. We had a horrific spring economic

00:01:44.640 statement that is just another credit card budget from these Liberals. But it contains

00:01:49.780 this so-called sovereign wealth fund. The money is all borrowed and it is just going to, it will

00:01:57.020 contribute to the, they have kind of a sneaky way to account for it. So it doesn't show up in the

00:02:02.880 deficit calculation, but it is borrowed and it will be a charge against the Crown that has to

00:02:10.200 be paid by taxpayers. So this is just another exercise in announceology where the Prime

00:02:18.400 Minister has announced something. It sounds wonderful when you hear his announcement,

00:02:24.140 but what is this really? It's a fund where they have borrowed, they say, to invest in the economy

00:02:31.100 to allow other Canadians to also participate. Look, any Canadian can participate in the Canadian

00:02:35.840 economy. You could go to any bank or any brokerage and say, I'd like to buy an ETF or a mutual fund

00:02:43.060 that is specific to the Canadian economy, and that bank or broker will facilitate that investment.

00:02:50.940 We don't need a sovereign, a so-called sovereign wealth fund. I mean, we've heard in the

00:02:56.600 announcements, I mean, they are trying to tie this to their goal of building major projects.

00:03:03.940 I mean, this government has had over 10 years to see through major projects.

00:03:10.000 They've passed laws that prevent major projects from being built.

00:03:13.940 And now they're saying, well, boy, I'll tell you what, we've set up the special projects office that'll put a political thumb on the scale to suspend selectively the laws of Canada in order for pet projects to be built.

00:03:26.320 And now we're going to borrow money for a fund that will go to these projects.

00:03:30.840 But they're saying to a proponent, but, you know, you've got to give us in for a piece, you know.

00:03:35.900 So we passed the law to, say, a pipeline proponent that says you can't build a pipeline unless we put our thumb on the scale to undo our own laws that we passed.

00:03:47.160 But now, you know, we're going to borrow money in exchange for an equity stake in something that we could have just repealed the laws in the first place and allowed the proponent to build.

00:03:58.440 And not actually cost taxpayers anything.

00:04:00.500 Right.

00:04:00.840 actually put more money let's queue up cut one here we have a bit of an analysis by a former

00:04:05.580 bank of canada governor as as well just kind of expressing a bit of frustration about what the

00:04:11.880 government is you know doing but also the the language they're using to convince canadians

00:04:17.200 are on the right track play cut one it is not a sovereign wealth fund in the traditional sense

00:04:22.600 of a sovereign wealth fund this is an equity fund uh and investors both government and

00:04:29.660 private side take risk. Right. This is really at its core a way to create a kind of public-private

00:04:38.720 partnership. Now, to be clear, just like with the construction of the Canadian Pacific Railway 150

00:04:46.800 years ago, Canada's major projects will mostly be built by private companies. And just as in the

00:04:56.760 1870s, the federal government will support these projects. How come every time the Prime Minister

00:05:01.780 says, to be clear, I'm even more confused? I'm hoping it's not just me, but my goodness.

00:05:08.080 There's nothing clear about this at all. I mean, there are just more questions than answers about

00:05:13.640 what this fund will really do. You know, invoking the building of the railroad is just, it's just

00:05:20.420 silly. These guys have been in power for 10 years and have failed for that entire period to preside

00:05:26.140 over serious construction of infrastructure, energy infrastructure, or ports, or highway

00:05:32.500 improvements, or all the kinds of things that would improve the productivity of the Canadian

00:05:35.700 economy. We had an RBC report come out not too long ago that showed in the last 10 years over

00:05:41.920 a trillion dollars in investment has left this country because of liberal policies the last 10

00:05:47.840 years. So we have the loss of capital. The government has put all these roadblocks in

00:05:52.940 place that forced the loss in capital because they just don't see a future. Investors don't

00:05:57.660 see a future in Canada. Then, as you said, they came up with great new ideas about a major projects

00:06:02.840 office that puts the scale on their preferred projects. They have other mechanisms in place

00:06:07.820 to fund projects that they feel are worthy of completion. This much insertion of the government

00:06:16.200 into the economy is not going to end well. This is going to be their preferred buddies getting

00:06:21.960 contracts and grants. Yeah, it's a system that just encourages sort of a rent seekers economy

00:06:27.740 wherein insiders lobby the government for the project that will benefit insiders and the

00:06:33.920 governments just use their political power to interfere with the construction of projects.

00:06:40.120 If they'd just peeled back and just gotten rid of Bill C-69 and Bill C-48, you know, I mean,

00:06:45.040 This government had a Pacific pipeline that was approved before they came to power in 2015, and they killed it.

00:06:53.200 It was literally one of the first things that this government did was, by order and cancel, cancel the conditional approval of the Northern Gateway pipeline.

00:07:01.300 If that pipeline had been built 10 years ago, or was approved 10 years ago, if it was built and in operation today, at today's prices, it would be generating $50 million, about $50 million a day in economic activity.

00:07:17.140 It would be $20 billion a year.

00:07:21.380 You could certainly be using that right about now.

00:07:22.940 Yes, and then we would be the supplier. We would be the reliable supplier of energy

00:07:27.500 that world markets are looking for in this time of need. But they blew it,

00:07:33.340 and now they're scratching their heads having this out-of-body experience,

00:07:36.380 wondering how and why we don't have such an infrastructure deficiency in this country.

00:07:41.420 So it was, I don't know, eight or nine years ago now that they created the Infrastructure Bank.

00:07:48.380 Yeah, we're going to get to that in a little bit. And don't forget Energy East,

00:07:51.580 which would have hit Europe and Keystone XL that the Biden cancelled and the Liberals just

00:07:57.560 basically, you know, were little mice on it. They didn't say anything, just nice and quiet.

00:08:02.620 All right, let's clear up cut two. We have our leader just mentioning how it's a debt fund,

00:08:08.180 but also some economists saying, what the heck is going on? Play cut two.

00:08:11.380 Carney has no surplus and therefore no wealth to put in such a fund. He's talking about a

00:08:18.300 sovereign debt fund. The problem is that essentially we've had deficits year after year

00:08:24.600 and the debt is growing. And that debt is very costly for Canadians right now and in the future.

00:08:31.560 When we're taking government budget deficits and investing those deficits in these projects,

00:08:36.460 we shouldn't expect that that's going to generate, you know, a strong financial return for the

00:08:41.560 Canadian taxpayer. It's probably not. So in essence, the government's saying,

00:08:45.500 I'm going to go into the store, I'm going to empty out the cash register, and I'm going to give it

00:08:50.420 to all the people outside, and they're going to go inside and buy stuff in the store. And oh,

00:08:54.600 look at all that economic activity. My goodness. It's kind of a circular thing to be sure. And

00:08:59.000 the deficit that was just tabled a week ago is double what Justin Trudeau had tabled for this

00:09:10.140 this year in his projections. And that deficit was so huge, was so big and considered to be,

00:09:16.660 was considered so awful as recently as 18 months ago, that the then finance minister actually

00:09:23.140 resigned rather than put her name to it. So now the government, a year and a half later, has doubled

00:09:28.720 a deficit that was so bad it triggered the resignation of a finance minister and ultimately

00:09:34.260 force Trudeau out. The gap between the debt service cost and the next line below that the

00:09:44.220 the health transfer is going to grow significantly over the next three years. I mean right now the

00:09:50.940 debt service charges are a couple of billion higher than the health transfer I think in this

00:09:55.920 budget. But within just by 2029, 2030, it's going to be, you know, 80 some billion to 60. So it's

00:10:05.960 a widening gap. It's, you know, and this is, this is sort of the spiral that this is what I guess

00:10:14.980 what people will look at as a debt spiral that someday can look at this and say, here, look at

00:10:21.040 the acceleration of debt service charges and the amount of money that goes to debt service

00:10:30.100 compared to other expenses. And this sovereign wealth fund is a part of this. They're borrowing

00:10:35.440 all $24 billion is all borrowed because there's no surplus to put into this. It is a debt fund.

00:10:41.740 They account for it with an offsetting asset. So it doesn't appear in the balance sheet as

00:10:48.660 as adding to, you know, as part of the deficit

00:10:52.300 because they say there's an asset here,

00:10:54.600 but they have to pay interest on it.

00:10:56.680 And there's no return on this immediately.

00:10:58.860 And there may never be any return on the money

00:11:01.460 that they invest or spend.

00:11:04.280 Yeah, this goes to your earlier point

00:11:07.020 about the rent seeker economy, right? 0.97

00:11:08.460 It's a lot easier to convince a bunch of bureaucrats

00:11:10.580 and politicians that your project is great

00:11:13.280 rather than, you know, taking it to the market in general

00:11:16.720 and try to convince 41 million Canadians that your project is great, right?

00:11:20.340 This is a shrinking of how the government views the economy.

00:11:24.940 It's very few people in charge of every single sector of our lives.

00:11:30.360 Yeah, it's where it's not the best project that gets built, the best lobbied project gets built.

00:11:37.280 So you mentioned earlier as well, the Canadian Infrastructure Bank,

00:11:40.200 because I was going to ask, there are other vehicles in play here that they've tried.

00:11:44.380 Yes.

00:11:44.700 And we'll queue up cut four here about the Canadian Infrastructure Bank, then I'll ask your thoughts on this. Play cut four.

00:11:50.440 What this program called the Canada Infrastructure Bank does is that it is tasked with financially supporting revenue-generating infrastructure projects that are in the public interest by catalyzing private investment through methods such as direct investment and public-private partnerships.

00:12:09.960 Isn't that how we just described Canada's brand new sovereign wealth fund?

00:12:13.720 Carney says the difference with the Wealth Fund will be in having an equity stake in the projects that get greenlit.

00:12:21.120 That, in theory, should lead to great wealth down the road, unless it doesn't.

00:12:26.200 In case a project goes south and fails and doesn't generate returns,

00:12:30.340 the Canadian taxpayer is, in a sense, going to be left holding the bag on any of these investments that, in fact, don't work out.

00:12:37.140 Now, you were saying off-air that that gentleman at the end was being a little too kind.

00:12:42.280 Well, yeah. The Canadian Infrastructure Bank itself is failed industrial policy. It's a failure. We had this in testimony at the Finance Committee just last week. The wealth fund is simply the government doubling down on a strategy that is already failing.

00:13:03.900 The Canadian Infrastructure Bank was supposed to unleash all of this private investment.

00:13:09.320 It was supposed to be how we leverage the private sector to get projects built.

00:13:13.040 Well, it hasn't happened.

00:13:14.300 Bill Morneau promised that this fund, that the Infrastructure Bank,

00:13:18.180 was going to create $5 in private investment for every dollar of public investment.

00:13:27.400 It hasn't happened.

00:13:28.320 And so far, they're getting about 60 cents on the dollar private to public.

00:13:34.200 And they are years and years behind on getting any of the money out the door into actual projects or completing anything.

00:13:41.840 So this has the infrastructure bank is a failure.

00:13:46.180 And now we're coming along with this new sovereign wealth fund, which with all the same claims and the same criteria,

00:13:53.720 again, all on borrowed money with this vague claim of how it will leverage private investment.

00:14:01.420 And, you know, there's just no reason to believe that this will be any more successful

00:14:08.240 than their other failed attempt to, in their words, leverage the private sector with public money.

00:14:16.260 Especially to your point, you have people, politicians and bureaucrats kind of in charge

00:14:22.880 and giving their employees jobs to do and managing these funds,

00:14:28.600 you're not actually engaging, in large part, the actual creators, the entrepreneurs.

00:14:35.220 Sure, you get the best lobby, it's a contract,

00:14:37.700 but those that are actually creating things,

00:14:40.420 they are fighting on the margins, on the outside, trying to obtain funding.

00:14:44.860 And you just see people that are friends with the government,

00:14:47.200 they're lawyers and lobbied, they get the preferred access.

00:14:50.420 It's creating a part, and we saw articles too, about brains, our best brains leaving the country because of it.

00:14:58.100 Yeah, I mean, look, since 2015, they have passed laws that prevent these private sector resource projects from being built.

00:15:09.100 Northern Gateway, Energy East, Keystone XL, which they failed to champion, even the Trans Mountain Pipeline.

00:15:16.880 they chased out the private investor that would have built it with private money and instead built

00:15:22.620 it with public money. And the cost overrun on it was, you know, it depends on where you measure

00:15:30.080 from or to, but between 500 and 1000%. You know, it's staggering how badly this government

00:15:38.640 manages this, but they still keep coming back with the same sort of control approach rather than

00:15:45.160 just simply peel back and get rid of the bad laws, Bill C-69, Bill C-48 that they passed in the first

00:15:52.340 place. Get control of the public finances to shrink the deficit, to bring in and ensure that we keep

00:15:57.420 inflation under control, make life more affordable for Canadians by increasing our productivity and

00:16:04.120 bring down the cost of living. All right, Pat, we're pretty much out of time, but as you know,

00:16:07.760 the guests always get the last word. The floor is yours. Close us out. Well, this past couple of

00:16:12.900 weeks have been just a horrific series of announcements around debt. The debt and deficit

00:16:20.480 and the strategy of simply borrowing to make announcements about projects and new agencies

00:16:29.580 and new instruments that will someday maybe we think we hope build infrastructure instead of

00:16:35.860 just simply dealing with the causes of the deficit of energy infrastructure, which is

00:16:42.340 bad laws that this government passed many years ago and refuses to repeal.

00:16:46.980 But this has also been the story of the government in general. They cause a problem,

00:16:51.300 they deny it's actually happening, and then when they finally get around to admitting that it's

00:16:54.880 actually happening, they come in and swoop in like they're the heroes that fix the problem,

00:16:58.860 but it's not actually fixed. It's just this circle that we're in.

00:17:02.160 I know. It's like they put in a carbon tax, make Canadians pay it for years.

00:17:07.220 The world's going to burn if we don't.

00:17:08.680 That's right. Canadians demand they repeal the carbon tax.

00:17:11.340 They repeal it and then want enormous credit for lowering the price of gasoline.

00:17:14.920 And then hit you with a clean fuel standard on the industrial carbon tax and say nothing to see here.

00:17:20.220 It really is amazing. Pat, thank you very much for your time.

00:17:22.840 You're welcome. Always a pleasure.

00:17:24.040 Pat Kelly, Member of Parliament for Calgary Crowfoot.

00:17:26.740 Thank you for your time. Thank you for yours as well.

00:17:29.440 Don't forget to like, comment, subscribe, and share this program because we have new content for you every single Tuesday, 1.30 p.m. Eastern Time.

00:17:36.880 So until next week, remember, low taxes, less government, more freedom.

00:17:40.420 That's The Blueprint.

The Blueprint: Canada's Conservative Podcast - May 12, 2026

Another Liberal scheme. Another bill for Canadians.

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