Quote:
Originally Posted by d_jeffrey
Yes, they could always do that but the markets might not like that kind of takeover. Hence why the CDPQi has the liberty to refuse projects.
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This is what I was trying to get at. CDPQi is great for now because politicians can announce projects and pay for them with future theoretical money, which unless there is a backstop in the agreement, does not create either an asset or a liability in the government's books. For the new projects, they might not be freestanding in the same way, so CDPQi seeks more generous terms from the government and revenue guarantees. The risk adjusted liability for backstopping the project to reduce the risk that development can't support it (why would CDPQi carry this risk?) gets booked in the government budget, and creates a budget deficit. Or the government capital contribution goes up to the point that it doesn't make sense to deliver it through a third party.
This is no different whether it is a Quebec pension fund, or a consortium of pension funds from around the world taking on the project. That Quebec is restricting itself to CDPQi is only a means to reduce political barriers to P3 development, it does not change how the deals appear in the province's books, or how CDPQi is looking out for its pensioners first.
All of a sudden, those who may have been uncomfortable with the model all along say: "If we are carrying the risk, why aren't we carrying the asset". The provincial pension fund is not an asset of the government. It is not Alberta's Heritage Fund.