The Canada Pension Plan’s investment board is sinking more than $1 billion of workers’ pension money into a bid for a privatized British water corporation. The CPPIB is part of a consortium bidding US$4.1 billion for Anglian Water, one of the UK’s largest water companies.
The move highlights the CPP’s move away from investing in public infrastructure at home. The plan’s reserve fund used to provide a healthy pool of investment capital for Canada’s public infrastructure, including our underfunded water systems.
Until 1998, all CPP surplus funds were invested in provincial government bonds. Provinces could borrow at federal government rates – cheaper than borrowing through the direct market. Much of our country’s public infrastructure was built with the help of capital invested by the CPP. Today, the multi-billion dollar CPP reserve fund, which is set to break the $100 billion mark, has become a jackpot for public private partnerships and other privatization schemes.
For more information on pensions, P3s and privatization, check out this issue of “Pension Talk” titled “Saying no to privatization with our pension funds”.