Liberals open to letting more private dollars pay for public services: Morneau

New federal government spending programs are being put to a new litmus test, Finance Minister Bill Morneau said Thursday — whether or not they offer the potential for luring private-sector investment. (Photo: Bill Morneau/Twitter)

OTTAWA — New federal government spending programs are being put to a new litmus test, Finance Minister Bill Morneau said Thursday — whether or not they offer the potential for luring private-sector investment.

Squeezed by deeper deficits, the Liberals only have so much fiscal wiggle room, which had Morneau putting spending proposals for his latest budget to a two-pronged test: Does it grow the economy, and might someone else want to help pay for it.

Without both, the spending might have to be put off, Morneau said Thursday in a post-budget interview with The Canadian Press.

In preparing the document tabled Wednesday in the House of Commons, Morneau said, he rejected multiple spending asks from cabinet ministers because they couldn’t leverage private investment, although he provided no specifics.

It makes clear that the cash-strapped Liberals have adopted a public-private philosophy when it comes to financing public services: that private dollars should play a central role, and no area of government spending is exempt.

“I don’t have anything that’s off the table, but we’re always going to come at it with that screen: ‘Is this a place where government is the best place to think about the investment, or is this some place where there is the opportunity for private-public partnership?” Morneau said.

“That’s an important way for us to ensure we’re fiscally responsible.

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When asked if that includes health care, where the idea of any sort of privatization evokes strong emotional responses from Canadians, Morneau said he hadn’t seen any proposals that the government has considered in that regard.

“That’s not something that we’re considering now,” he said.

The Liberals, out of necessity, believe private dollars can stretch public funding and help boost economic growth, which is key to ensuring healthy government coffers and also battling the forces of populism.

Morneau, ministers and Liberal MPs began reaching out Thursday to talk to Canadians about the economy as they embarked on the task of selling the federal budget — in particular convincing people that it will help them in both the short and long term.

While the budget puts an emphasis on skills development, it also puts money into areas and sectors where the Liberals believes they can “win” — industries where Canada already has a solid foundation that could grow with government help, including resources, agri-food, advanced manufacturing and artificial intelligence.

“We’re seeing government as an enabler for more commercial success, not as an actor on its own, but one that’s encouraging additional investment,” Morneau said.

But the push for more private actors in public services goes beyond growing industries — it’s playing a growing role in social policy as well.

The government is:

— Testing ways to encourage private companies to pay for skills training programs;

— Giving indigenous-led charity Indspire $5 million for bursaries and scholarships, provided it can raise $3 million in matching funds each year;

— Introducing a new $5 billion housing fund that will aim to have the private sector help renovate and build social housing nationwide.

Then there is the proposed infrastructure bank, the goal of which will be to pull in private dollars to pay for large-scale infrastructure projects that offer a built-in revenue stream, such as transit and electrical grid projects.

Morneau said government funding and financing will be the only way to complete many projects, and there is only so much money to go around. Private investors, including pension funds “want to invest” in big work, Morneau said, “and that will allow us to do a lot more infrastructure than we might otherwise be able to do.

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The government is going to review projects as work on setting up the bank continues so that when the bank launches in about six to eight months, investors will have funding opportunities to consider, Morneau said.