The Canadian Connection to BlackRockIn March 2020, the Bank of Canada announced that BlackRock, the world's largest asset manager, is to be a key advisor and consultant regarding the federal Liberal government's COVID-19 corporate bailout program. This is just the latest development in the growing influence and deep entanglement of the U.S.-based super-cartel in the economy and politics of Canada, which goes back a number of years. For example, there is BlackRock's involvement in the federal government's Infrastructure Bank. In the 2015 election, Trudeau proposed the formation of a federal infrastructure bank "to provide low-cost financing for new infrastructure projects" that would "use its strong credit rating and lending authority to help municipalities reduce their cost of borrowing."[1] But in January 2016, Prime Minister Trudeau met with BlackRock CEO Larry Fink at the World Economic Forum in Davos at a time when Fink was also calling for increased infrastructure investments by governments and private interests. Trudeau met with Fink again in March 2016 in New York. Later that spring, the Liberal government announced the formation of an Advisory Council of Economic Growth which, in the fall of 2016, called for the creation of a Canadian Infrastructure Development Bank. By that time, the original concept of the infrastructure bank -- to provide low-cost financing for infrastructure projects -- was replaced with the new aim of allowing the private sector, including BlackRock and its clients, to put up much of the financing at a higher cost to municipalities and other bodies.[2] Prior to the meeting in fall 2016, Trudeau government officials worked cheek-to-cheek for several months with BlackRock executives in crafting presentations to inform potential investors about investing in the Infrastructure Bank. BlackRock personnel organized the investor meeting for November 14 and, in the course of a number of bi-weekly sessions leading up to it, even went so far as to help put together the PowerPoint presentation that Amarjeet Sohi, the federal Infrastructure Minister, delivered at the meeting. Jean Boivin, currently a BlackRock managing director and previously an Associate Deputy Minister with the federal government, also participated in those sessions.
As the BlackRock Transparency Project and various news reports have revealed, other government bodies, such as the Canada Pension Plan Investment Board (CPPIB), have had their own involvements with BlackRock.[5] Mark Wiseman was a CEO of the $278 billion pension plan board from 2012 to 2016 which manages the CPP pensions of 20 million Canadians. While at the helm, Wiseman "significantly outsourced management of the pension plan's assets to BlackRock," including investing in BlackRock's "distressed mortgage funds" and other global investments. As CEO of the CPPIB, Wiseman was eventually appointed to the government's Advisory Council of Economic Growth. However, just three days after its first meeting, "Wiseman abruptly announced his intention to resign from the [Council and the CPPIB] to join BlackRock as its global head of equities." Despite this clear conflict of interest, the federal government allowed Wiseman to remain on the Council, as well as to stay on as a senior advisor to the CPPIB. And so it is that the federal government allows BlackRock officials to be key advisors while at the same time lobbying for federal funding. Besides Wiseman and Jean Boivin, both of whom jumped to BlackRock from top positions in the public sector, there are a number of other examples of the "revolving door" of high level personnel between BlackRock and the federal government. For example, in 2018, BlackRock took on another CPPIB official, Andre Bourbonnais who had been the CEO of PSP Investments, which is the $139 billion retirement fund that manages investments for the Public Service, the Canadian Armed Forces and the Royal Canadian Mounted Police. All told, there are more than two-dozen additional officials "who have worked or interned at both the CPPIB and BlackRock." According to the BlackRock Transparency Project, BlackRock has had "a significant hand not only in the [infrastructure] bank's creation, but in personnel decisions as well" including determining who should fill key positions.[6] Thus the state and the super-cartel become one. For his part, Prime Minister Trudeau continued to meet with BlackRock executives, including attending a private dinner with BlackRock executives on March 8, 2017 and a meeting in 2018 in New York with BlackRock investors. Today, with BlackRock appointed as key advisor in the COVID-19 bailout program, even the Bank of Canada has been "thrust into BlackRock Inc.'s increasingly crowded orbit."[7] One of the oldest economic think tanks in Canada, the C.D. Howe Institute, has also been brought under BlackRock's influence. In 2017, the Institute, which previously had published a study critical of the idea of an Infrastructure Bank, received funding from BlackRock and appointed a top official from the super-cartel to its board of directors. Since then the Institute has issued various publications praising the Infrastructure Bank. Besides its inroads into the Canadian public sector, BlackRock has a huge involvement in the private sector. Although the full extent is not known, BlackRock either manages or owns assets in most large North American companies and financial institutions, including those in Canada. As well, iShares, its family of exchange traded funds (ETFs) dominates the $200 billion ETF market in Canada (as it also does in the huge U.S. market). In 2019, BlackRock formed a strategic alliance with RBC Global Asset Management to deliver a new brand of ETFs named "RBC iShares" worth $60 billion. According to a press release from RBC, "this transformational alliance brings together two market leaders: the world's largest ETF manager and Canada's largest asset manager."[8]
Besides the issue of the Infrastructure Bank, there is the broader issue of a super-cartel like BlackRock being in a position to take actions and make decisions that impact the public interest of Canadians in fundamental ways. Indeed, the corporation threatens to enmesh much more of the Canadian economy in its net, especially now that it is a key advisor in the government's COVID-19 bailout program, which will provide funding to chosen corporations and financial institutions. As one professor has commented, it's likely that BlackRock now "oversees at least a portion of just about every Canadian's retirement nest egg."[11] The super-cartel currently has $27 trillion of assets under management, while the Canadian economy has only a GDP of $1.9 trillion. Thus it has the capa:bility to influence and distort the entire direction of the economy as well as the political affairs of the country. But should a giant entity with such narrow aims have such influence over everything from public pensions to the economy as a whole? After all, BlackRock's aims are all about its own private interest and that of its clients, not the broader public interest. The super-cartel aggressively pursued the interests of its investors (and its own interests) when it pushed to de-regulate the financial sector in the U.S. in the 1990s and promoted the toxic mortgage-backed securities market, all of which contributed to the financial crisis of 2008, resulting in countless bankruptcies, housing foreclosures and job losses in the U.S., Canada and elsewhere (while BlackRock benefited hugely from the very crisis it helped cause). Over the years, it has pursued cartel-type policies that put its interests first and which various observers believe should be prosecuted or made illegal. In addition, as an example of its lack of commitment to any sort of public interest, the super-cartel has been named in various international tax evasion scandals, including those revealed in the Paradise Papers and Panama Papers.[12] All of this shows that we need a new direction for the economy in Canada. Decision-making power must be in the hands of the Canadian people, not in those of a super-cartel or a financial oligarchy with a hammerlock on the state. Notes1. "Private-sector role in Canada Infrastructure Bank raises conflict issues." by Bill Curry, Globe and Mail, May 5, 2017. 2. "Creating a Canadian infrastructure bank in the public interest." by Toby Sanger, Canadian Centre for Policy Alternatives, March 20, 2017. 4. "New evidence shows BlackRock's role in Canada Infrastructure Bank may have also included advising on key personnel," by Black Rock Transparency Project: Campaign for Accountability, August 27, 2018. 6. "Why the Bank of Canada needs BlackRock's help while fighting the coronavirus downturn," by Kevin Carmichael, Financial Post, April, 1, 2020. 7. Ibid.8."RBC Global Asset Management and BlackRock Canada announce strategic alliance to transform Canadian ETF market," RBC Global Asset Management, January 8, 2019. 9. "Democracy Watch files complaint with Ethics Commissioner raising questions about violations of federal ethics law by BlackRock and the federal cabinet." by Bradford, Democracy Watch, May 24, 2017. 10. "What is BlackRock, and why does it matter now in Ottawa?" by Andy Blatchford, Maclean's, May 11, 2017. 12. "Canada Infrastructure Bank promoter involved in tax havens." National Union of Public and General Employees, accessed May 2, 2020.
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One of the big
attractions of public infrastructure projects for
a private interest
like BlackRock is the higher return on its
investments, which can be as
much as seven to nine per cent per year. Of
course, that extra return
ends up coming out of the public purse and, over
time, can end up
doubling the cost of projects.[
Not a few
pundits, journalists, academics, NGOs and unions
have raised concerns
about BlackRock's growing clout over the Canadian
economy as well as
its ethical violations.[