Needed: The Canadian Investment Bank

Please chip in to support more articles like this. Support for as little as $5 per month!

The Ontario and Canadian governments are putting the squeeze on retired autoworkers. Call it General Motors decides on our behalf.

Sadly, both Ontario Liberals, and federal Conservatives are prepared to back Detroit-based management of American companies, and push around the Canadian workers who have been making cars. Surely, it should be the other way around: governments should be backing Canadian workers through an industrial strategy, not being pushed into doing whatever is decided in the U.S.

Sending subsidies South is not going to bring back jobs eliminated by GM, Ford, Chrysler and US Steel; or support Southern Ontario, and its hard hit communities: Oshawa, Oakville, Windsor and Hamilton.

Canada needs an industrial strategy. A prime objective should be to put into operation a national transportation company, one using existing steelmaking, and other Canadian industrial capacities.

Along with an industrial strategy approach, business logic -- short term profits before people -- needs to be set aside. In its place, we need a society-wide accounting approach that shows the social costs and benefits of building socially responsible, and environmentally sustainable Canadian industrial capacity.

Overall, implementing a made-in-Canada industrial strategy requires a new approach to finance: investing for the common good, using broader criteria than market profitability.

Public sector industrial finance is not much in evidence in Canada, or even much discussed provincially or federally. But serious industrial policy initiatives require new public sector financial institutions. Canada, Ontario, and the other provinces need to create public investment banks to finance projects that have an important social, and environmental return.

The governments of Ontario, and Canada are should take the money that are planning to give U.S. corporations, and instead create the Canadian Investment Bank (CIB), and the Ontario Investment Bank.

How would a public sector investment bank such as the CIB work? Investment banking means taking ownership positions in companies. A new steel company -- Canadian Steel -- could be created in Hamilton. It could secure the support of provincial, municipal and federal governments, the community of Hamilton and the Steelworkers.

The expertise and knowledge needed to make steel and deliver it to clients is unquestionably available in Hamilton. The role of the investment banker, the CIB, would be to provide start-up capital to buy the existing facilities abandoned by US Steel when it closed Stelco, and engage the engineering, marketing and sales people needed to make it viable. In return for the start-up capital, the CIB would hold ownership shares in the Canada Steel. Eventually the steel company could buy these shares back or the shares could be sold by the CIB to the public or to union and community partners.

The new steel company would have an enlarged mandate akin to a co-operative: provide employment, prepare a green future and cover direct costs over a reasonable time period. Rather than maximizing short-term profits, it would aim at maximizing social and environmental returns for its union, community and government partners.

The operating capital of the CIB would come from the issue of bonds. The initial funds would be subscribed by the Bank of Canada, which could purchase for its own account as much as $50 billion in CIB bonds. The CIB would also issue bonds for purchase by pension funds, and individuals, including small investors. The CIB bonds would be guaranteed by the Government of Canada, and would bear a low rate of interest, reflecting government backing.

In wartime conditions (1939-45) the Bank of Canada purchased government bonds. It was the underpinning of the successful creation of the industry needed to make war. The same financing method could be used to green the industrial structure of Canada today.

The income for the CIB would come from fees, loans, and eventually the sale of shares in operations it brought into being such as Canadian Steel. Though it would have minimal administrative costs for staff, and other business expenses, the main CIB expense would be the interest it owed to bond holders.

In the case of the Bank of Canada, the main creditor of the CIB, the interest paid would become part of the annual profit of the Bank of Canada. This considerable amount is turned over the federal government yearly.

Instead of paying welfare, and unemployment benefits, governments at every level would collect taxes from companies funded through CIB. These benefits would need to be included in the social accounting procedures used to evaluate the performance of the CIB.

There would be no need for the CIB to make quarterly profits. The five to ten year objective would be to recover its direct costs, and create social and environmental advantages through its support for local industries.

Without a CIB or its Ontario equivalent, there is no good way to bring back to life the former Stelco facility US Steel acquired in Hamilton, and then closed.

The value of such a steel company to Canada and to its Hamilton community would always exceed its profitability, and there is every reason to believe it could, at the very least, cover its direct costs over a reasonable time frame of five to ten years.

A national steel company, a public sector transportation company, and other industrial enterprises could all benefit from harnessing public credit for the common good through public sector investment banking.

Duncan Cameron writes from Vancouver.

Related Items

Thank you for reading this story…

More people are reading than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable. has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.


We welcome your comments! embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on and your privacy here. Please keep in mind:


  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.


  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.