Monday, April 25, 2016

Canada Considering Asset Recycling to Public Pension Funds

The Liberals, the oldest federal political party in Canada, is considering making public assets available to non-government investors such as public pension funds. Theory behind asset recycling is as follows: Asset recycling offers deep pocketed investors or pension funds access to reliable investments with predictable returns through revenue streams from highways, rail lines, and ports. Question is whether or not pension, many approaching insolvency faster than they realize or care to admit, will voluntarily spend cash in hand needed to pay retirees for the revenues and costs of public works investments. Maybe the asset recycling program won't be voluntary.

Headline: Liberal government to consider public pension funds to help bankroll mounting infrastructure costs

OTTAWA • The federal government has identified a potential source of cash to help pay for Canada’s mounting infrastructure costs — and it could involve leasing or selling stakes in major public assets such as highways, rail lines, and ports.

A line tucked into last month’s federal budget reveals the Liberals are considering making public assets available to non-government investors, like public pension funds.

The sentence mentions “asset recycling,” a system designed to raise money to help governments bankroll improvements to existing public infrastructure and, possibly, to build new projects.



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