By Graeme McNaughton/The Oshawa Express
Oshawa mayor John Henry is calling on all level of governments to think outside the box when it comes to infrastructure funding.
And that line of thinking brought him to Norway.
At the last meeting of regional council, councillors voted to endorse a motion brought forward by Henry and fellow Oshawa councillor Nester Pidwerbecki to call on the federal government to establish a sovereign wealth fund, made up of surcharges from natural resource extraction.
“We have a number of environmental issues throughout Ontario, but really our story is the same from coast to coast to coast. We have problems with social housing, infrastructure, transportation, water and sewer, and quite frankly, our ratepayers are not able to carry the burden themselves any longer,” Henry said while addressing council. “When you look at the development across this country, we can do much better.”
It was this line of thinking that led to Norway’s sovereign wealth fund, which sees surplus funds from the country’s nationalized petroleum industry invested into a fund. As of Oct. 16, the worth of the fund was the equivalent of more than $1.1 trillion.
That money is designated for investment in infrastructure projects outside of the country.
Norway has a second fund, worth approximately $31 billion on Oct. 16, which invests in projects inside of Norway.
Pidwerbecki says that the conversation in Canada should not come to the idea of nationalization, but rather to use the Norwegian example as a starting point.
“This is not about nationalization. I think that everyone gets a little uptight when you start talking about raw resources and everything,” he said, adding he first learned of Norway’s wealth fund in a CBC documentary. “I’m sorry that we don’t have it because everyone should have a look at this because it’ll really knock your socks off because what they’ve done just with their oil resources. And the big companies are there, they didn’t leave, because they had to pay a little surcharge. They’re all there happy, they’re smiling and going to the bank.”
“The laughter from Alberta”
Not all councillors were on board with this proposal, with one saying there is no way all of the country would be on board for such a plan.
“What I think this motion ignores is that in Canada, the provinces have jurisdiction over natural resources, so I can just imagine the laughter from Alberta that they would take some of their oil revenue and use that to build infrastructure in Ontario. I invite anybody to go out and try and pitch that in Calgary and see what kind of a reception you get,” said Joe Neal, a regional councillor from Clarington. “The federal government doesn’t actually have the ability to impose royalties on Alberta oil. I think the whole thing is just, unfortunately, kind of misdirected. A nice idea, but I just think it would make us look kind of confused.”
Ajax mayor Steve Parish said the proposal is nice as a concept, but that there are initiatives worth more focus now.
“This motion is nice in a conceptual term, but there’s immediate things that are happening now,” he said. “The Province of Ontario, I think, is committed to making some real changes with respect to the rules that municipalities play by. I know they’re prepared to change the Development Charges Act so that we get full funding for transit from growth. And they might even be prepared to take those amendments to the Development Charges Act and have it apply to all of our infrastructure.”
An example from the North
While there is no national wealth fund, there are some that exist at local levels. In the Northwest Territories, the government invests 25 per cent of revenue made from the mining industry into its Heritage Fund, with no more than five per cent of the fund’s value being taken out for 20 years.
“We looked at success stories such as the Norwegians with their sovereign wealth fund that has something like $1 trillion or so,” Michael Miltenberger, the finance minister for the Northwest Territories, tells The Oshawa Express. “Of course, we are way, way smaller than that. We are getting close to $5 million in there right now.”
Miltenberger says the decision was made by the territorial government to start putting money aside for future generations because the profits gained from resource extraction, a major industry for the territory, won’t be around forever.
“We could easily spend every cent, like everybody else could. Like you could, I could if I wanted to. I can always find something to spend money on, but individually and as families we try to save for the future through pension funds and what not,” he says. “For us as a government, we have a responsibility for future generations to put aside some of that nonrenewable resource money that’s not coming back for the future.”
Miltenberger says that while it would be a good idea for the federal government to institute such a fund, as has been suggested by Henry and the rest of regional council, he says it is also the region’s responsibility to not rely solely on Ottawa for money for infrastructure.
“Like many things, I would encourage people not to rely totally on the federal government and their decision making when you’re planning your own future for yourself individually or for your community or region,” says Miltenberger. “You also have that obligation at your level, I think, to look after yourself because if you guys aren’t going to do it, waiting for the federal government that potentially changes every four years, there’s a considerable risk.”