William Watson: Carney should take his own no-meddling advice

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Well, yes, but that's true in Canada, tooLast updated 7 minutes ago Maybe Andy Burnham could fly over to join Mark Carney at the Grey Cup in Calgary on Nov. 15 and, through chattering teeth, the two could compare notes on how well their disputes with employers are going. Photo by Paul Cooper/WPA Pool/Getty ImagesAccording to Britain’s Daily Telegraph, our prime minister, Mark Carney, has warned Britain’s prime minister, Andy Burnham, possibly while they were attending an Everton Football Club match last month, that any move to nationalize the Thames Water company would be bad for international investment in Britain. It seems foreign investors don’t like governments that meddle in their business.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThis advertisement has not loaded yet, but your article continues below.Thames Water Utilities Ltd is, its website declares, the United Kingdom’s largest water and wastewater manager, delivering what it calls “life’s essential service.” You’d think having a regional monopoly over provision of an actual necessity of life would lead to an easy life for yourself. But Thames Water has been losing money big-time, can’t get a rate hike through its regulator and has been facing serious leakage and liquidity problems (literal leakage and financial liquidity). Its predecessor companies were under public ownership from 1904 until privatization by the Thatcher government in 1989 and there has been talk recently of re-nationalization, especially since Labour came back to power in 2024.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againIt was the possibility of re-nationalization without fair compensation that Carney was reportedly advising Burnham against as being bad for Britain’s business reputation and therefore for future investment — some of which Canada competes with Britain for.If that doesn’t sound quite like Carney, who has no compunctions about involving his government in the private sector at home, and may seem a strange topic for two left-leaning lads enjoying their favourite team’s home game — which The Toffees (don’t ask) won one-nil over the Wolverhampton Wanderers — there’s a subtext here. Carney was just passing along messages from big Canadian investors — including RBC and OMERS — who have important stakes in Thames Water and don’t want to be expropriated. Infrastructure has been all the rage among institutional investors for quite some time now. But although it is as important to economic life as water is to actual life it turns out it’s possible to lose money at both.This advertisement has not loaded yet, but your article continues below.Two weeks after Carney’s visit with Burnham, a Sunday Times feature on RBC’s Dave McKay quoted the bank’s CEO as saying, “When the U.K. flirts with nationalizing Thames Water, with putting on a bank tax, with putting a capital tax on the wealth or housing, it signals you want to harvest your economy, not grow it.”Of course, the anti-growth people like harvesting, since you can do it every year, which makes it sustainable and renewable. But the rest of us prefer the idea of not just harvesting but actually expanding economic activity over time so it will lead to rising living standards, as it has for the past 250 years. State-run enterprise typically hasn’t been at the vanguard of that growth.Either way, it’s good to see Mark Carney standing up for property rights and fair compensation. But it does seem a little off-script for him. Eighteen months in, Carney has done some things to encourage private enterprise but the main theme of his government so far is that the federal cabinet needs to be extremely involved in exactly what direction the economy takes. And he gives every impression of believing, as most in his party seem to, that “profitable businesses and high earners (are) cash cows to be milked for revenue,” to borrow a phrase from British Conservative Leader Kemi Badenoch’s terrific new pamphlet, The Right Way.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.RBC’s McKay told The Sunday Times that Carney’s attempts to speed up permitting and his recent expansion of expensing of business investment are the kind of things the U.K. should do to attract more investment. It will be interesting to see what message the federal government sends with its current spat with Stelco.As you’ll recall, Ottawa claims Stelco promised to maintain employment at its Hamilton, Ont., works as a condition of U.S. buyer Cleveland-Cliffs taking control of the company in 2024. But conditions have changed, argues C-C’s CEO, who suffers the severe Canadian public relations disadvantage of being a Trump supporter. And conditions have indeed changed. Many of Stelco’s products now face a 50 per cent tariff in the U.S. market, Ottawa has imposed retaliatory tariffs and neither country is budging.If Ottawa’s agreement with Stelco really does say no layoffs then, fine, Ottawa should sue. It can tell other potential investors that if you sign a deal with us, we expect you to stick to it, which is fair enough — even if foreign investment would be higher if Ottawa signalled it won’t insist agreements be kept. If businesses know they’ll be held to any commitments they make, maybe they’ll be less willing to make them — though that may make governments willing to pay more to get them.This advertisement has not loaded yet, but your article continues below.But is it really Ottawa’s position that workers have to be kept on even if the market for what they produce dries up? Granted, there’s a long policy tradition in this country of financing things consumers don’t want. You could argue that’s the CRTC’s whole purpose. But cold-rolled steel?Maybe Andy Burnham could fly over to join Mark Carney at the Grey Cup in Calgary on Nov. 15 and, through chattering teeth — the average Calgary high on that date is 3.9 C — the two could compare notes on how well their disputes with important employers/producers are going and what effects they’re having on the foreign investment they both say is crucial to their economies’ futures.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.