In this episode, Finance Minister Bill Morneau responds to a question from a Canadian senator about the Canada Growth Fund and why there should be a separate piece of legislation which outlines the fund s mandate and how it will be managed.
00:00:00.000Division 1 on the Canada Growth Fund, and I have some concerns about that section of the bill.
00:00:06.800It's going to provide $2 billion to you as Minister to buy shares in a corporation which does not exist.
00:00:15.520There's no legislation which tells us anything about this yet to be created corporation.
00:00:20.980We don't know anything about the composition of the board, or even whether there will be a board.
00:00:25.980There's nothing to tell us about the financial controls that will be exercised over the $2 billion.
00:00:32.620And there's nothing to indicate what the governance structure is going to be.
00:00:37.180And equally concerning, there's a section there in that part of the bill that says that the $2 billion isn't the most that's going to be paid out.
00:00:46.280It leaves it quite open that there could be future monies coming out of the Consolidated Revenue Fund, and there's no limit on it.
00:00:54.760So what I don't understand is why, if you're going to establish a fund with money of that magnitude,
00:01:05.080why isn't there a separate bill which would outline the specifics of the company and also what the company is going to do,
00:01:15.640what the mandate is, what the objectives are, what the board composition is going to be.
00:01:20.400So it's really concerning to see $2 billion going out with an explanation.
00:01:25.160I think there are 17 lines there, and it leaves it quite open that additional monies can be paid out of the Consolidated Revenue Fund.
00:01:32.840So why is there not a separate piece of legislation?
00:01:35.980Well, thank you for the question, and thank you for focusing on what I actually believe is one of the most important elements of this was introduced in the budget
00:01:50.060and elaborated on in the fall economic statement, and something that I see as one of the most important elements of our green transition.
00:01:59.100The Canada Growth Fund will actually be capitalized at $15 billion,
00:02:06.100and the objective is for that government money to pull in private capital at a ratio of at least three to one.
00:02:19.480We understand that we need to have actual investment professionals do this work.
00:02:29.380It's going to perform some very sophisticated jobs in the green transition, including contracts for difference,
00:02:38.800which we are hearing from investors in Canada and outside Canada is a really important element to ensure that people have the confidence in our carbon pricing system to invest in it.
00:03:29.300And so getting this fund in place quickly is more important than ever.
00:03:33.220But, Minister, you can't put the fund in place.
00:03:35.940You're saying, give me the $2 billion, I'll buy some shares, but the company doesn't even exist.
00:03:42.340The company doesn't exist, and you're giving us all this information verbally.
00:03:46.980If that's the mandate of this soon-to-be or this corporation you're talking about, why isn't it in the legislation?
00:03:57.140I mean, you know, we're looking at this.
00:03:59.400There's 17 lines there to justify spending at least $2 billion, and then it leaves it wide open for there to be additional appropriations coming out of the Canada Revenue Fund.
00:04:14.300Like, I'm just very, very surprised to see it.
00:04:17.880$2 billion with no explanation within the bill over how the $2 billion is going to be controlled.
00:04:27.820The company's not even created, and what are you going to buy shares in?
00:04:32.360Senator, you are one of the most precise questioners I face and have a very, very strong financial background, and I really appreciate that.
00:04:55.740And I think that scrutiny is important.
00:04:57.820What I would say in terms of the Canada Growth Fund is what I hear from Canadians and from Canadian businesses, especially in wake of the Inflation Reduction Act, is Canada has to move fast, and Canada has to move faster than we have hitherto.
00:05:13.900So we are moving quickly to structure the Canada Growth Fund.
00:05:18.000We're going to be fully transparent in how we stand it up, and details are going to be forthcoming in the coming weeks and months.
00:05:26.040But I really believe, given the hundreds of billions of dollars that the U.S. is deploying, we cannot allow the U.S. to suck all of that investment south of the border.