Carney's choice.
No sequence of events illustrates Mark Carney's "values" more clearly than the one outlined below:
1. April 16, 2024, Justin Trudeau's government enacts a change to the capital gains inclusion rate effective on 2024 income, the return for which will be filed on April 30, 2025.
2. May 13, 2024, Trudeau explains in a video that this policy – raising the inclusion rate from 50% to 2/3 on capital gains greater than $250,000 – will affect 0.13% of Canadian taxpayers and raise $20 billion in revenue.
Note that revenue is not debt that has to be paid back with interest but dollars deposited in Canada's Consolidated Revenue Fund (CRF), which is the aggregate of all public funds on deposit at the credit of the Receiver General for Canada. This serves as the central bank account into which all federal tax and non-tax revenues are deposited.
3. January 6, 2025, Trudeau resigns.
4. March 9, 2025, Carney wins the Liberal Party of Canada's leadership election and replaces Trudeau as the Liberal Party's leader. March 14, 2025, Carney is sworn in as prime minister of Canada, not as the result of a general election but as a consequence of having won the Liberal Party's leadership election.
5. March 21, 2025 – one week after being sworn in and six weeks before tax day, April 30, when the bill for Trudeau's increase in the capital gains inclusion rate would have been due – Prime Minister Mark Carney announces that he is reversing Trudeau's inclusion rate increase on capital gains above $250,000.
6. March 24, 2025, Carney dissolves Parliament and calls a snap election for April 28, 2025, in which he is elected to the House of Commons and, as leader of the Liberal Party, which wins a minority government, he retains his office as prime minister.
7. April 27, 2026, almost one year to the day after that election, Carney announces his sovereign wealth fund (SWF), which will be seeded with $25 billion borrowed from (and paid back plus interest to), among others, the 0.13% of Canadian taxpayers who would have paid $20 billion tax on capital gains if Carney had not reversed Trudeau's inclusion rate increase.
Why this matters
Suppose Trudeau's $20 billion were collected per his capital gains inclusion rate increase and loaned to various Canadian builders and industrialists. Whatever the interest rate on those funds happened to be, all of those dollars would ultimately find their way back into our, meaning Canada's, CRF.
Now, consider the same loans to the same recipients but extended by Carney's so-called "sovereign" wealth fund. Not every dollar repaid by those recipients, principal and interest, will find its way into our CRF, where they can be loaned again and again in perpetuity.
No. So-called "investors," foreign and domestic, will eventually be repaid the $25 billion with which they originally capitalize Carney's SWF, as will future "investors" be repaid whatever principal they "invest" in Carney's fund; and all will siphon off from the proceeds of loans issued by his fund whatever interest their loans to his fund yields.
Carney's understanding of public finance is a leaky boat: Do not invest, meaning marshal the resources of a nation to accomplish a particular goal, but make it worth the while of so-called "investors" – a euphemism for rent-seekers chasing unearned income – to loan a nation money with the intention of being repaid in full plus interest.
There is also the question of collateralization of the loans third parties make to Carney's SWF. What properties, resources, and infrastructure do foreign "investors" get to foreclose on if the Canadian government is unable to render them their interest or principal payments when they are due?
Carney knows the answers to these questions from the 13 years he spent managing Goldman Sachs "investments" in "emerging capital markets."
Carney recently stated he is no longer "in" the private sector, but after a lifetime serving private-sector finance, he seems, as the timeline above illustrates, incapable of conceptualizing investment from the perspective of a public servant.