Pension funding would inflate project costs

Re Feds bet on bank as social justice tool, Olive, June 17 David Olive’s proposal that public pension funds provide financing for infrastructure is flawed.

First, there is no shortage of low-cost government funds when we own the Bank of Canada — witness the recent $200-billion bailout of big banks and corporations after the 2008 financial crisis, or the sudden decision to increase defence spending by $62 billion.

Second, while pension funds may be non-profit, the public-partnership model eats up enormous accounting, legal and management charges, and pension funds expect a 7- to 9-per-cent return. Such financing is expected to double the cost of projects.

Third, while helping retirees may seem admirable, the monies are extracted through tolls and fees, largely from overstretched middle-class families when they can least afford it.

However, Olive makes a good point regarding CPP’s meagre investments in Canada. At a time when 1.3 million Canadians are unemployed, why is our national pension fund sucking money out of the domestic economy and building up competitor companies overseas? Larry Kazdan, Vancouver