Letters: Sovereign wealth fund is a poor idea for debt-ridden Canada |
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Letters: Sovereign wealth fund is a poor idea for debt-ridden Canada
Readers have their say on the Liberals' fiscal update, the 'wealth fund,' 'decolonizing' Shakespeare and more in the letters to the editor
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Fund ‘likely to cost the Canadian taxpayer’
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Re: Not another Liberal slush fund! — Jack Mintz, April 28; Federal deficit smaller than expected in spring economic update, but with $37.5B in extra spending — Jordan Gowling, April 28; Carney accelerates Canada’s fiscal collapse — Matthew Lau, April 30; and A year in, it’s time for Carney to start delivering — Joe Oliver, April 28
Letters: Sovereign wealth fund is a poor idea for debt-ridden Canada Back to video
One of the favourite ploys of (some) mutual fund salespeople, upon noticing that their client had borrowing power, was to recommend borrowing money at X per cent and investing in a fund with the prospect of making a return greater than the cost of money. This strategy worked well if the fund appreciated in value, but if it didn’t, the unhappy fund holder was left paying interest on a depreciating asset. This is usually not a recommended strategy, but this lesson seems to have been lost on Prime Minister Mark Carney, who wants to start a Canadian Mutual Fund, a.k.a. the Canadian Sovereign Wealth Fund. Given government’s record of picking winners and losers, eg. Northvolt, this fund does not appear to be a winning strategy and is likely to cost the Canadian taxpayer.
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