Expanding privatization

While neoliberalism is nothing new, what used to be a broad understanding that the public good is undermined by privatization has been eroded. Decades of losing against the interests of capital has blunted effective political opposition. Today it is almost seen as quaint to suggest the government could operate anything even as simple as a bridge, nevermind anything with productive output.

What makes it hard to fight is that wholesale selling-off an asset or your standard public-private partnership (P3) have been replaced with extremely complex financing arrangements. The goal has been to effectively hide the cost of guaranteed payments to capital. While the outcome is the same as P3's, the focus is to reduce the overhead of pretending there is transfer of risk to the private sector.

In some cases, they just say what use to be the quiet part out-loud. Now, the benefit of paying more is simply that profits are good and the government's role is guaranteeing them.

For this new general policy in action, look no further than the Carney governments' establishment of the Canada Growth Fund (CGF), specifically its funding of energy projects.

The CGF was recently established under the Canada Development Investment Corporation (CDEV) with the sole aim to gift profit subsidies to investors from large public nuclear and other projects.

Do investors bring anything to the projects they are "investing in"? Nope. The investor comes in after the government has secured funding and built most of the asset, all that happens is the borrowing and operation costs of the assets get more expensive.

Canada prospers when its major assets are performing at their best. We evaluate, improve and acquire government-owned businesses, and when the moment is right, sell the government’s stake in these assets. Our foresight and disciplined processes attract top partners, protect competition and jobs, and unlock capital for new priorities. Since 2010, we have returned over $10.8 billion of capital to Canada. (CGF)

CGF will slowly use money it gains from privatizing public assets to "buy" additional government assets. Yes, one arm of government transferring ownership to another arm of government is called "buying" now. Just like I "buy" my breakfast from my own fridge in the morning. For tax reasons.

Those newly "purchased" assets (or just ownership shares) will come with less public oversight and fewer limitations on ripping-off Canadians who built them. The CGF will then actively find a more expensive ownership arrangement through a profit subsidy regime. And, start the cycle again.

It is not hidden, this is the announced program by the government.

If you look at recent announcements, it is clear why this is happening. The Liberals have a particular view of the government that has been adopted across most of the Western world. The goal is to enrich your friends in business as quickly as possible. Gone are any view that government is for building the public view. This is not austerity, it is a wholesale ideological rejection of public service and a mixed economy, replaced by open graft and shadow profit subsidy.

This ideology extends now to liberal versions of public policy development, the value of the work of public servant labour, concepts of sovereignty, the supposed economic development program of government spending, and even Indigenous reconciliation.

Selling asset ownership shares to "Canadian" capital pools such as Brookfield, banks, pension funds, or Indigenous community capital funds does not change the analysis of the profit subsidy regime. The transfer of wealth from the public to a capital fund is not value creation, it is theft.

Allowing CDEV's CGF to own part of the new Ontario nuclear reactors is a clear example.

For nuclear projects like Darlington's SMR, it takes very little digging to see the blatant wealth transfer happening. The public entity with the knowhow builds the generation infrastructure with public money, costs are increased, ownership of revenue on the cheap sold, and then "profits" are reaped to private investors.

Folks at OPG & Darlington have learned how to build nuclear power on budget, on time, and cheaply. This knowledge is no good to directly privatize since nuclear power is still too expensive and the private sector is awful at building it.

Interest rates are too low for capital to make much money lending to AA-rated public institutions like OPG.

So, to increase the speed of wealth transfer to capital, they get CGP to own port of it. "Indigenous capital" is included in the list of capital pools along with with Pension Plans, and private equity to diversify the language of profit subsidy.

This is on top of SMRs not being Canadian tech, resulting in the tech being more expensive. An additional subsidy since the same private equity funds also own that Tech.

And, a new trade deal with India to support the offshoring of the nuclear design work to non-union, low waged, longer hours offices owned by the same equity firms who own the SMR and refurbishment contracts.

All this is just for one "major project" claimed by the Carney government.

Brookfield comes up over and over again. But, it is unfair to pick on them because it masks the rest of those involved. All of the capital funds are lined-up at the door for the profit cheque.

There are easier ways to give money to you favourite companies. Trump just points at one and hands over money to them if he likes the CEOs.

My suggestion to Carney's liberals is to quit with the costly facade and just "lean in" to full fraud as it would be cheaper. Though, I have to think the lawyers and AI bots who write the pretend policy narrative need public money too. This is what Carney's Liberals must mean by "supporting the service economy."

If only there were a different way to spend limited public resources.