This transcript has been automatically generated.

Colin White: Doesn’t Sovereign Wealth just make you feel all safe in in all all of the the the warm spots? I think best case for this is as neutral. Worst case is we double down them. And if this turns into a all Canadians have to invest all their money in Canada, that is going to have real measurable prolonged harm on the lives of Canadians because

Kathryn Toope: Welcome to Barenaked Money, the podcast where we strip down the complex world of finance to its bare essentials with your hosts, Josh Sheluk and Colin White, portfolio managers with Verecan Capital Management Inc.

Colin White: Welcome to the next edition of Barenaked Money. Josh and Colin coming at you with something fun, exciting, interesting, and entertaining, all of those things. Josh, what’s on your mind?

Josh Sheluk: Well, as usual, Colin, we’re here to strip away the sales pitch and give people the talk on money the way that it should be handled. That’s without a shower curtain. It’s in the nude metaphorically, of course. But as usual, Josh and Colin here, portfolio managers at Verecan Capital Management. And if you’re looking for straightforward advice from a firm that isn’t trying to sell you a product, the product of the week maybe, you can visit Better Advice to start a conversation.

Now, today, Collins, we have, I think, an exciting show, a show that we’re hearing questions from our clients about this. And I think that you are very excited about it.

Colin White: I’m very excited about talking about Sovereign Wealth, Josh, because doesn’t Sovereign Wealth just make you feel all safe in in all all of the the the warm spots, Like, when somebody says to

Josh Sheluk: Makes me feel very rich. Makes me feel, as as I guess it should, very wealthy.

Colin White: Well, that’s like, you know, going to a private wealth firm. You know? Private wealth makes you feel good. It’s just a phrase that that gives you comfort. You know?

But but what what what what is a sovereign wealth fund? And and should it really make you more and is this really a sovereign wealth fund that Mister Carney is talking about for the fine people of Canada? There’s a lot a lot to peel back in this onion.

Josh Sheluk: Yeah. And I think your first opinion was one of what?

Colin White: Well, see, no. That that didn’t really have an audience. That was me just yelling at the mountain because it it offends me on a cellular level, but that’s not really relevant to to our our listeners and and our clients and the world, frankly. But what is relevant is understanding what a sovereign wealth fund used to be and then building up into what Canada has turned it into. The origin, and I’m so proud I found this and you didn’t, Josh, because that doesn’t happen very well.

So I’m just gonna sit here and bask in the globe for a second. The the origin or the initial purpose of a sovereign wealth fund is can be traced back to Dutch disease protection because there is an issue for countries that have considerable commodity wealth and that it is very lumpy. And that is goes not just for oil and gas. It can go for minerals. It can go for virtually anything that is a commodity.

So you have a nation that is super profitable based on one thin part of their economy. The challenge is is that if it gets so profitable that you can, in effect, overvalue that country’s currency and then make the rest of the industries weaker within the country. So the the solution was in forming a sovereign wealth fund in those instances was to take money that was being generated out of these commodity type businesses, turn it into a fund, and invest outside of the country so to diffuse the impact on sovereign currency that would otherwise ensue. You know what? I think that ticks all of the economic boxes, John.

Does that make perfect sense to you? Like, isn’t that like an elegant solution to a very real problem?

Josh Sheluk: Yeah. Yeah. It it sounds like it. It sounds like it. It’s an interesting concept, first of all, if implemented properly.

And I guess we should just take a step back and talk about, we’re talking about this today because of the recently announced Canadian Sovereign Wealth Fund, which I think is being called the Canada Strong Fund at this point. And of course, why wouldn’t you want a sovereign wealth fund that also makes your country strong?

Colin White: Canada Strong sounds good to me.

Josh Sheluk: But it’s also worth mentioning, there’s a lot of details that aren’t really hashed out at this point. So we’re gonna comment on what is widely relayed at this point. And it seems to me that what isn’t widely known at this point is maybe not widely known because it’s gonna be hard to make it all make sense. So I think they’re trying to figure out how to make it all make sense. But you’re right.

So the Dutch disease thing, think is what you’re coming to, right? That’s where the name Dutch disease comes from.

Colin White: Well, you

Josh Sheluk: could elaborate that too.

Colin White: Well, yeah. So, I mean, that’s where it started. So one of the largest examples currently in the world is the Norwegian sovereign wealth fund, which is the largest in world, over $2,000,000,000,000. And the way that is set up is that takes a percentage of the revenue that comes in from predominantly the oil and gas industry and allocates it into an investment fund. And then the country gets to spend as part of their operating budget, the money that that fund makes.

So rather than taking that money and putting it directly into the coffers and spending it as it comes in, they recognize that that commodity basket may have a life. You know, it may be last for a period of time, but it’s also quite volatile. So if you mitigate that, you you create this large fund which invest internationally, and then the money that it makes can come back in to help fund the the the the life of the people there. So you’re taking a source of wealth and redirecting it and investing it for future generations and to make the current generation a little bit more, you know, comfortable, if you will. 77% of the money that we figure is in sovereign wealth funds is in The Middle East.

China is a big player, but The Middle East is also because they are where a lot of the dominance of the, you know, the fossil fuels are coming from. So there is a thought that, hey, this may have a life, you know, over the next hundred years or whatever you wanna put on it. So let’s stash some of those for future So sovereign wealth, you know, the top ten, fifteen in the world are all based loosely or directly on this principle. Now it’s not to say that that that Norway doesn’t borrow money. They do.

But, you know, they they are, you know, they are actually a net investor. So if you net out the about what they owe or what they have, they could pay off all of their debt. So they do carry some debt because of, you know, liquidity issues. I wanna make sure there’s a bond market. So but if they sold off all that they have, they could pay off all that they owe.

So they’ve got a positive balance sheet in Norway.

Josh Sheluk: Okay. So that’s how these things have worked historically in principle. And I’m gonna throw you some meatballs right now so you can compare and contrast that versus what Canada has proposed. So let’s just go sort of characteristic by characteristic. So first of all, taking surplus or revenue from a commodity or resource that you’re

Colin White: Windfall. Any windfall.

Josh Sheluk: Yeah. There you go. Windfall. How does that compare versus Canada?

Colin White: Oh, we ain’t got nothing, so we have to go borrow it. So what they’re doing is basically going to market and borrowing more money because Canada is nowhere close to the idea of being able to pay off all of its debt. We like that. We like that a lot. We’ve used that quite a bit.

So this is intended to be financed out of borrowing. So there’s gonna be a cost to establish this fund rather than something that’s going to be, which and I I guess I’m gonna leap way way ahead here because this means that any return that is is generated will be offset by the cost of borrowing because that’s what that’s the boat we’re in. So this isn’t extra money that we’re just investing to make extra money on. This is leverage. Canada is Canada just took out a HELOC.

Josh Sheluk: That’s that’s right. Yeah. A HELOC on our natural resources.

Colin White: Exactly.

Josh Sheluk: Okay. So Canada taking $25,000,000,000 of debt to start the funding for Canada Strong Fund, very different than taking extra revenues or windfalls, if you called it, as you called it from the resource sector. And Canada is investing this $25,000,000,000 where?

Colin White: Well, that’s a great question. You’ve asked a really, really good question because we’re not sure because there’s some confusion out there, Josh. And part of the confusion is we already have this. In Canada, you’ve got the Canada Infrastructure Bank, which focuses on gap financing for projects that aren’t yet commercially viable, which seems to be some of what they’re talking about with the Canada Strong Fund. You’ve got the Canada Growth Fund focused specifically on decarbonization and emissions reduction.

That’s out there actively looking to invest money. And you’ve got the Canada Strong Fund, which is focusing on equity ownership and commercial grade returns, which is what I believe yeah. I think that’s what that’s actually being proposed right now. So you had these you had these other funds that were already out there doing some of this stuff, and this just seems to be a relabeling of some of those initiatives. And and and part of what we don’t understand, and this is when you dig into it, they don’t really they don’t have answers for you yet as to how this is going to compare with the other two.

But they also seem to be wanting to compete with commercial investment, investment, and, you know, that that that’s that seems inappropriate. So I don’t think that there’s a and I know for a fact, there’s not a real clear vision for exactly what they wanna do. I I can tell you that the Halifax International Airport Authority is up in arms because they don’t wanna be bought. They put out a press release over the weekend that they think they’re doing just fine by paying the fee that they pay to the feds, and, you know, they would be disheartened if they were to be bought out and run as a commercial enterprise because they don’t think that that’s in the best interest, which, again, I think there’s an argument to be made there because that is one of the targets that are one of the targets, like, targets of maybe a bad way to put it. One of the things that’s been brought up with regards to assets that the Sovereign Wealth Fund could invest in.

Josh Sheluk: Yeah, so I think what has been talked about is where these investments are going to happen is it’s going to happen within Canada.

Colin White: Yep.

Josh Sheluk: And that seems to be fairly widely known and to be they seem to be fairly confident of that at this point. At this point, that could change. But one of the key things that you said in your intro of the other sovereign wealth funds that are out there is that they take money that’s earned domestically and invest it abroad because you can’t stabilize your currency and you can’t stabilize your economy by having investments if all of these investments are domestic. That diversifying aspect and something that we talk about all the time on this show, diversification doesn’t exist if you’re just doubling down on the one thing that you’re trying to protect or insure against. So that seems to be a clear miss from the the the general trend for the way that these sovereign wealth funds are run.

Colin White: Looking at something that, you know, that’s again, I’m a details guy, like, how are they how are we gonna know whether we’re making money at it or Like, you know, what is the the the cost of capital that’s going to be put against this? What kind of infrastructure is gonna be put in place to run this? And, you know, is it going to take part in things? It’s one of two things. It’s gonna take part in things that are not commercially viable, therefore, have a much lower expected rate of return on them or a lower rate of return.

I don’t need to say much, but a lower rate of return. So you’re gonna borrow money and invest in something that maybe is less commercially viable, which hasn’t attracted enough capital to go. So you’re gonna get a smaller rate of return, or you’re gonna compete with the allocation of commercial capital, you know, and, you know, push out some other players who, you know, are probably better equipped to to to to finance projects that that that need to happen. So I I object to the word government and investing in the same sentence. I don’t think governments invest.

I don’t think government should invest. I think it’s it’s just bad English. It’s it’s because they’re they’re they are going to allocate capital based on nonfinancial features. You know, it’s going to be accomplishing some kind of a goal. It opens itself up to becoming a bit of a select fund.

It opens itself up to funding things that are politically important, but, you know, not financially viable short term, long term or trying to accomplish, you know, a goal other than making money.

Josh Sheluk: Well, well, hold on, though. They’re gonna have an independent crown Quite. To make the decisions for this. So why would they That won’t be politically motivated at all, Colin.

Colin White: And that independent crown corp is gonna go around and buy up assets from other independent crowd corps. I mean, this This

Josh Sheluk: is all sounding a little bit like the finance industry at large, which as you know, they’re they’re doubling down on all the conflicts of interest that exist.

Colin White: Okay. So let me defend it for a second. Let me just jump on the other side because this does sound powerful. This does sound strong. This can be part of the moment that we’re seizing and and improving our own sovereignty.

You know, I I think it’s a mistake, but I I see why it would get traction right now. But, you know, my concern is that it’s just fundamentally flawed. It’s it’s it’s flawed in a way that is not going to deliver the outcomes that are expected. And I was terrified, terrified when they they floated the idea that average Canadians could invest alongside the government. I really hope that dies a quick death because, you know, this that just knows.

Like, just all of the knows. It’s like, knows. Yeah. I I will give Canada credit because the the the Canada pension plan is a global example of what you can do with an actually fully funded pension plan. And they have, for the most part, managed to avoid the the pressures of investing in Canada and doing the things that would have, you know, potentially impaired their ability to meet their obligation to to pensioners.

They have got caught up in having way too much of a bureaucracy. They don’t do anything efficiently, I would argue. But I would I would give Canada full marks for not noticing it the money was there and not reallocating it to something stupid. That’s my only I I don’t think it was a conscious decision not to to mess with it because I’ve I’ve I’ve attended presentations get given by the Canadian Pension Plan Investment Board, very smart people, and had people protesting and or reading statements about how all of that money needs to be invested in Canada. But that’s the exact opposite of what you need to do to make your country strong.

And I think that that’s what’s being missed in this moment. But it’s being missed in this moment because this moment is about Canada getting more defensive. It’s about protecting their sovereignty. It’s about looking inside. And I get I get the moment from a political perspective, but financially, it’s completely wrongheaded.

Josh Sheluk: Yeah. I I think the idea of of investing is the wrong word, but focusing on the infrastructure build outs in Canada and supporting domestic projects that will further our economic success here at home. I think that makes a ton of sense. And I think we’re on the same page with believing that having a sovereign wealth fund is maybe not the best way to do it. This may come as a surprise to many of our audience, but governments don’t have the best track record when looking at fiscal prudence and spending money in thoughtful, constructive, long term ways.

So I think that’s a concern. And there’s a lot of questions that I can kind of run through some of these questions rhetorically as to how all of this is going to work. But that’s definitely a big part of it is the general concept is maybe good, but the implementation is maybe not so good.

Colin White: But you can go back very recently to electric vehicles, EVs. Right? The public government got involved and said, okay. We’re gonna promote the use of electric vehicles. You know what?

On its face, not a terrible thing. Putting your finger on the scale and and changing the economics of it is what’s doomed it, you know, because you you ended up in a situation where there’s now a large oversupply of production for something that’s really not entirely ready and the infrastructure is not entirely ready for it. Because in you know, when a free market works, and I’m not a a fan of a 100% free market all the time, but when a market’s efficient, there becomes an alignment between all of the different pieces. The technology getting where it it can do what needs to be done and the and the infrastructure getting there to support the technology. And that’s a bit of a cat and mouse game, and it’s all gotta come together at the same time.

But just to walk to everybody and say, hey. I wanna make it really easy for you to buy a car, that that didn’t help. In fact, I you could argue that that’s been a setback because you’ve seen a lot of the progress get rolled back, you know, in in plants being shut down and projects being shuttered because it just we’re not quite there yet. So I think that that is a microcosm or one example, but you open up a sovereign wealth fund. So if you can do that five or six times in six or seven different industries, like, you know, you you you could go everywhere and ostensibly support something that seems to be very it it would have to be very politically popular because that’s what governments do, and that may be the absolute worst way to allocate capital and stuff that’s politically popular.

No offense to people, you know, as a rule, not everybody has got a really firm grasp on what is in their long long or even midterm fiscal best interest.

Josh Sheluk: Yeah. One of the big questions with this whole idea is if these projects, these infrastructure projects, these natural resource oriented projects, if they’re so good, if they’re so profitable, if they’re so smart, why wouldn’t private investors do it already? And you have to really believe that there is some misalignment or misallocation of private capital. If you’re saying that all of these projects exist to be funded and financed that the private market is overlooking. Again, this may come as a surprise to people, but businesses, entrepreneurs, enterprising individuals and corporations, they tend to be pretty good at sussing out what’s gonna be profitable for them and throwing money at that type of thing over time.

So are there a lot of areas that are overlooked? There’s probably some, but I’m not sure that the government’s going to be able to better identify those areas than private investors are.

Colin White: I know they won’t. That’s just a done deal. See, the thing is like what what’s happening, I think, and and, you know, if you take a look at it from behavioral perspective, we’ve entered a different stage. And and Mark Kearney, I’ll give him full credit on the international stage. He’s done a fantastic job of raising the Canadian profile internationally on addressing some of these issues of deglobalization, which means that we’re building back into the country.

So there there is a legit and solid, you know, inertia at play with regards to this topic. Now the problem is when you have something that’s really popular, everybody wants a piece of it. Now the government’s real job here is just to stand back and get out of the way. Try to provide a regulatory environment that overcomes the barriers between the provinces, try to harmonize all the regulations with regards to environmental impact and all the rest of it, and make the system work as efficiently as it can in order to allow these things to happen. That’s the role that they should be playing.

You can’t get votes doing that. Like, that’s not exciting work like that. You know? Hey. I killed a regulation today.

Nobody is you know, that that’s not something you can flap in a flyer and do fundraising with. But they’re trying to hitch their wagon to the most visible part of this. We’re gonna invest alongside Canadians to make Canada stronger and completely ignoring the fact that the best way to do that is to, you know, get out of the way and take what money we do have and get it outside the country so that we can better protect our our finances from the ebb and flow of the the commodities that we rely on so healthy.

Josh Sheluk: Can we take a look at this supposed retail individual citizen investment component of this? Because this is maybe the most interesting part and we can talk about what is actually out there and poke holes and what’s actually out there.

Colin White: Yeah. Hearken back, and I’m not sure, Josh, if you remember these. They were probably the the the echo of them was still probably around when you come in the industry, but the labor sponsored venture capital funds that were these pools of capital that were raised. And you had an additional tax break for investing in them, but the money had to be deployed in a geographic region and it had to be specific to generating jobs. Everybody saw a tax break and advisers went, hey, I can go sell a tax break.

And tens and hundreds of millions of dollars got raised all across Canada. Catch was there wasn’t enough places to allocate that money, you know, in anything viable. So we went from maybe a couple of viable things that couldn’t find financings to a whole bunch of money that needed to finance something. And that’s worse because if your job is to allocate capital, you’re gonna find a way to allocate capital because if you don’t, you lose your job. So capital get allocated a whole bunch of bad things.

The investment performance ended up being terrible, and they end up all getting wound down because this fallacy that, you know, there’s a whole bunch of really good things out there in the world about to happen. We just need to fund them and the world gets better. Like, no. No. No.

No. There are trillions of dollars of of money flowing around the world looking for viable things. If you can’t attract money, you’re probably not viable. So making everything have money? No.

That that that doesn’t lead to a better outcome. And I see some parallels between this because you watch you know what? Listen. We’re recording this, so I want this to stay in the archives that you watch at some point in time if this becomes if this becomes available to retail advisers, at some point, there will be a tax incentive that gets attached to it to raise more money for the Canada Strong Fund. Then I know we’ve entered the second level of hell and all is doomed.

Josh Sheluk: But this can’t be like labor sponsored funds, Colin, because there’s gonna be a capital guarantee on it. So you how could you lose your money?

Colin White: So people that are rich enough to have surplus money to invest in something will profit from, and then all taxpayers will provide the guarantee to protect them from losing anything. That that there you go. That’s that’s that’s very.

Josh Sheluk: Bingo, taxpayers are gonna provide the guarantee. So just to take a step back, what has been talked about so far is that there’ll be some type of what’s called the retail fund where your average person, John Smith, my mother, son, they could go and they could invest their hard earned money in this Canada Strong Fund as to invest, as you said before, alongside Canada. What’s also being talked about is there’s some type of capital guarantee. So if you invest a $100, your a $100, I don’t think can go away. And there is some promise of market returns.

I’m not sure what market they’re talking about, but this sounds to be pretty awesome where you get to put your money in, there’s no risk of losing your money and you get upside related to the market. What market that is, I’m not sure, but it sounds like you get to check all the boxes, good returns, no downside. What’s the risk?

Colin White: Back at this point is for the podcast that we’ve done on financial scams because you know

Josh Sheluk: Sounds very familiar, doesn’t it?

Colin White: You’re ticking those boxes as well. It’s like, let me understand this thing. So you’re gonna get market returns, there’s no downside and you get to invest alongside the government of Canada making Canada strong again. You know what? If I could buy the license and own that company, I’m sure I could raise money, especially with the taxpayers, the one that’s going to provide the guarantee, and I won’t ever have to set aside a reserve to cover any kind of guarantee.

Josh Sheluk: Yeah. So that’s the interesting thing here. And again, some of these are just gaps right now, but if you’re investing in long term infrastructure projects that inherently carry some risk with them. It could be a funding risk. It could be a change in consumer preferences.

It could be a change in the world or that resources are used or the way that that infrastructure is used. There’s just no way to invest in something that has zero risk and provide a positive return. So who’s going to backstop the guarantees that this fund provides, if that’s how it turns out to be, it’s gonna be the taxpayers as you say. So it’s gonna be being you and and everybody else in Canada that’s paying taxes, which is kinda scary.

Colin White: That’s not the same thing, Josh, that we’ve gone through with the the liquid alternatives. Like, people are saying, like, here, you can buy an airport and a pipeline, and you can sell it back to us if you want. Like, you know, like, isn’t that kind of if you kind of extrapolate a little bit about, you know, you can invest alongside the government. Well, what’s the government gonna buy? But we’re gonna buy pipelines.

We’re gonna buy airports. I’m going, that those don’t seem liquid. Like, what if people want their money back? Well, you you can’t tell there’s no ready market to buy the airports back.

Josh Sheluk: Right. Yeah. So there are a couple of parallels to this within the market today. Parallels, they’re not exactly the same, but I think one is the private investment vehicles that have emerged that provide some type of liquidity, we call in the industry evergreen funds. So you can buy private equity or you can buy private credit or you can buy infrastructure or real estate, and we’ll give you access to your money back periodically.

But one of the things that we’re running into issues with now with all of these types of products is we only have so much money available to give back to you at any point in time. So if we don’t wanna give you your money back, we’re just going to say no. In your best interest, supposedly. So if the government’s investing in all of these things that you mentioned, railways or ports or airports, whatever it is, they’re gonna be faced with the same issue. They’re not going to have a bunch of cash they can just all of a sudden give back to people if they start asking for their money out.

So that’s one big question that arises with this type of structure is what type of liquidity will investors have, if any, with these types of retail fund investments. So that’s one of them. But the whole thing about the guarantee and the market returns, that math just does the math. These these products, these investments, they don’t exist. So either the government’s going to have to get really creative with the financial engineering for this and probably backstop it with taxpayer dollars, or there’s probably some catches or nuances to it.

Now, the other parallel that’s out there, and the reason this is a parallel is you can look at something that Quebec does. I’m not sure if this came across your radar with the research that you did, but Quebec actually offers something called an index bond. I think this is what they call it. And you get exposure to 30 Quebec based publicly traded companies. And you lock your money up for five to ten years and you have a capital guarantee on it.

So you’re guaranteed to get your money back if that basket of stocks is down in that timeframe, that five or ten year timeframe, you can get your money back. So you get to participate in some upside, but it’s capped. And what this sounds very similar to is a structured note or also known as a principle of risk note that is widely offered by many financial institutions out there. And it sounds like Quebec does the same type of hedging that some of the banks and financial institutions do when they offer these products. So there are a couple of similar type products, if you add a couple of asterisks on what’s being that are out there today.

All of which come with their pitfalls and issues, by the way.

Colin White: Why we have governments? Governments are to do things that businesses aren’t good at. That like, that’s the definition of government. Like, you know, there’s no real business model to run a fire department. Okay.

We should all get together and agree on having a fire department. There’s there’s not really any good model we’d be happy with. Run a police department. Great. Let’s all get together.

We’re gonna form a group that runs a police department. You know? And the list goes on. The government’s there to do things that businesses don’t do well or the the business model doesn’t fit. That’s why governments exist.

They’re trying to be popular. They wanna be with the cool kids. They wanna raise capital. And they they they do this every once in a while, but that’s not their primary purpose. That’s not what they’re good for.

And, you know, this is probably this could be just an inventive way them for them to borrow an extra $25,000,000,000, not to have to show it as a deficit and get to invest it into their own pipelines and all the rest of it to make some stuff happen. You know what? If we’re playing the shell game and it was funny you were gonna borrow anyway and we put it in the sovereign wealth fund, you know what? I could stand back and say, look. No harm.

No foul. It’s it’s all garbage. But no no no harm. No foul. We were gonna borrow the money anyway.

So you borrowed it. You put it in a special place. You invested it specially. You know what? I could I could make my peace with that and say that the world’s not that much of a worse place.

You start telling people they can invest in it. Easy big shooter. Take a step back. Now you can potentially cause some real harm because you’re taking people’s hard earned money that they can allocate towards something else and putting it in a jackpot. That I really don’t like the risk return profile.

I would call this an asymmetric risk.

Josh Sheluk: Yeah. I think in the best case scenario, this retail fund type of investment probably turns out to be a positive investment for people. But you can look at Canada savings bonds as an example. But what ended up happening with Canada savings bonds is they had a lower interest rate and the other government of Canada bought that you could buy at the same time. They just made it more accessible to people.

And that ability was no longer able probably for the last twenty years. So it’s an investment in infrastructure, I guess, if you want to call it that. But you probably end up worse than you would if you just went to the private market and got something similar.

Colin White: Well, if that comes out, there’s a huge infrastructure that goes in behind it like that, that there’s a lot of people get hired. There’s infrastructure that gets put in place and, you know, so the government is again not not the most efficient at doing things. So, you know, again, I I don’t want to you know, like I said, there there is a way forward that they just borrow this money. They call it something different. They invested in all the right things.

You know what? They were gonna borrow the money anyway. They’re gonna invest in it anyway. Maybe this is neutral. I think best case for this is as neutral.

Worst case is we double down on and if this turns into a all Canadians have to invest all their money in Canada, like if this turns into pressure on the Canada pension plan, if this turns into a movement that, you know, we need to allocate more of our money internally to defend ourselves, that is going to have real measurable prolonged harm on, you know, the the the lives of Canadians because you diversification. You know, you need to diversify your reliance, in the best possible way, and this is not diversifying anything. This is doubling down. You know, because right now and it’s funny because we’re seeing it continue to go on now with the TSX. TSX is still rolling ahead doing great.

You know? But we’re losing jobs and we’re losing people and, you know, the Canadian economy itself isn’t in great shape. Stock market is doing fine. That doesn’t matter to the majority of Canadians. The majority of Canadians aren’t materially affected by a good stock market.

Now they’re affected by the Canadian economy. And, you know, that’s a thing. And and and to double down on and invest on more of the Canadian, you know, companies that are struggling, you know, with the Canadian actual economy is struggling, that’s not the best way to protect your your thirty year retirement.

Josh Sheluk: Oh, final verdict on Sovereign Wealth Fund is we need to first of all, we need to know more details about it.

Colin White: Well, yeah, think yeah. We should we should leave this at it’s this isn’t final. Like, they’re still looking at all these other products they have or all these other programs they have out there because they’re asking the questions really should we really do it? So this may not may never be a thing or they may change before it comes out. So I’m not sure we can announce our final verdict.

I mean, we put this together based on a whole bunch of people asking questions.

Josh Sheluk: Current yeah. Current verdict is Yeah. Better way to put Okay. There you go. That sums it up nicely.

Not for your retail investments and not for our countrywide investment. Oh, hell no for both.

Colin White: There you go. So you double, oh hell no.

Josh Sheluk: Great. Everyone for listening to Barenaked Money. If you’re wondering if your financial advice is disciplined, that’s probably a conversation that’s worth having and we’re happy to have it with you. Josh here, Colin as well. We’re portfolio managers of Verecan Capital Management and we’re always accepting new clients and new conversations.

Visit betteradvice.ca to get started.

Kathryn Toope: Have you ever wondered why your financial advisor is making a recommendation? In an industry where conflicts of interest are everywhere, it’s important to understand how they affect you. For more info, contact us at Verecan. You can find us at annoyingthecompetition.com. For more information on the subject of today’s podcast or any other financial topic, please visit us online at verecan.com.

That’s verecan.com. There’s plenty of information there, or you can reach out to someone on the team. Thanks for listening. Please note, the information provided in this podcast is for general information purposes only. It is not intended as financial investment, legal tax, accounting, or other professional advice.

Our discussions are not a solicitation to buy or sell any securities or to make any specific investments. Any decisions based on information contained in this podcast are the sole responsibility of the listener. We strongly advise consulting with a professional financial adviser before making any financial decisions. Listeners should be aware that investing involves risks and that past performance is not indicative of future results. Barenaked Money is produced by Barenaked Money, a licensed portfolio management company in Canada.

We operate under the regulatory framework established by the provincial securities commissions in the provinces within which we operate. The views expressed in the podcast are our own and do not necessarily reflect the official policy or position of any regulatory authority. Remember, at Veracan Capital Management Inc, we focus on aligning our goals with yours, prioritizing integrity and transparency. For more information about us and our services, please visit our website. Thank you for listening, and let’s continue to challenge the norms of the financial services industry together.