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Canada unfazed by U.S. competition for infrastructure funds

TORONTO - Canada is not worried about competing with the United States to attract private investment in infrastructure, Prime Minister Justin Trudeau told reporters after meeting prospective investors on Monday.

TORONTO - Canada is not worried about competing with the United States to attract private investment in infrastructure, Prime Minister Justin Trudeau told reporters after meeting prospective investors on Monday.

Canada's government said this month it would set up an infrastructure bank and give it access to C$35 billion ($26 billion) to help fund major infrastructure projects and is engaged in a charm offensive to attract private investors.

However, it faces competition from the United States with President-elect Donald Trump planning $1 trillion of infrastructure spending, relying entirely on investment from the private sector.

"I'm not worried about competing, what I'm worried about is highlighting and putting forward the best possible understanding for people of just the ease of doing business in Canada, the long-term growth potential here in Canada, the extraordinarily positive and educated workforce," Trudeau said.

Canada's government wants to attract $4 to $5 in private funding for every $1 coming from the public purse and is speaking to sovereign wealth funds and global private equity firms as well as domestic pension funds.

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Attendees at Monday's event, which was organized by the Canadian government in collaboration with U.S. investment firm BlackRock, included Norway's Norges, which runs one of the world's largest sovereign wealth funds, the Qatar Investment Authority and Singapore sovereign investor Temasek.

Trudeau and Finance Minister Bill Morneau have also expressed a desire to attract investment from Canada's biggest pension plans such as the Canada Pension Plan Investment Board (CPPIB), the Caisse de depot du Quebec and the Ontario Teachers' Pension Plan.

A significant proportion of the projects the bank hopes to fund will be built from scratch, known as "greenfield" investments, rather than "brownfield" investments which have already been built.

The Canadian pension funds, among the world's 10 biggest infrastructure investors, have invested more in projects overseas than in their domestic market.

That is partly because they have preferred to invest in existing infrastructure which has established revenue streams and does not carry construction risk. However, that stance is changing as investors seek alternatives to government bonds and volatile equity markets.

Last week, CPPIB's Chief Executive Mark Machin said the fund would be open to investing in greenfield projects through the infrastructure bank.

Meanwhile, the Caisse, Quebec's public pension fund, is planning to build a new 67-km public transit system in Montreal, investing C$3 billion and supplementing that with C$2.5 billion from the public purse.

($1 = 1.3546 Canadian dollars)

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