News that investment giant Brookfield is in talks with Canadian pensions to create a $50-billion government-backed fund drew fierce criticism on Wednesday from the opposition in Ottawa.

Reactions were more mixed from supporters of the broad goal of putting trillions of dollars of Canadians’ pensions savings to work within Canada. While some voiced enthusiastic support, others were skeptical that Brookfield’s investment approach would be the right way to use pension money to promote Canadian economic growth.

The Logic broke the news on Tuesday of Brookfield’s preliminary talks with the “Maple 8” pension giants—such as the Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan.

The federal Conservative party zeroed in on the links between Toronto-based Brookfield and the Liberals. Brookfield Asset Management’s chair, former central banker Mark Carney, is also advising Prime Minister Justin Trudeau on economic policy as head of a new Liberal task force on economic growth.

The Tories have targeted Carney as a “phantom finance minister” and future Liberal leader, and tie him relentlessly to the Liberals’ carbon levy.

“It is unacceptable that Carbon Tax Carney has been given the power by Trudeau to offer him advice on this request,” the Conservatives said in a written statement. “Brookfield’s 2023 financial report shows that Carney holds $1 million in stock options in their firm. If Trudeau were to grant Brookfield’s request, how much would Mark Carney stand to personally profit?”

Leader Pierre Poilievre took up the issue in question period, asking Trudeau why he hasn’t hired Carney as an employee of the government, who would be subject to ethics and conflict of interest restrictions.

Poilievre is “really cheesed that we didn’t hire [Carney] for the government payroll,” Trudeau shot back. Carney is just helping the Liberals fight the “reckless and dangerous economic plans of the Conservative Party,” he went on.

Carney and Brookfield did not immediately respond to The Logic’s requests for comment.

Brookfield’s work on the fund predates Carney’s advisory role with the Liberals, according to timelines that sources shared with The Logic. 

Brookfield’s proposition has been that it would administer a fund with $36 billion in contributions from pension funds, $4 billion of Brookfield’s own money and $10 billion from the federal government, said sources with knowledge of the proposal.

One source with direct knowledge of the discussions between Brookfield and the pensions said the government’s relationship with Carney makes the fund “hugely problematic” from a political standpoint. Whether or not Carney himself is involved in the fund, the optics aren’t good, said the source.

Another source with knowledge of the discussions said there may be little incentive for pensions to participate. “Why would we pay fees into a fund?” said the source, adding that pensions already invest in Canadian assets, or co-invest with other firms, if attractive opportunities arise. 

That source also suggested the government could incentivize investments in Canada by simply privatizing public assets such as airports, saying, “If they want to open up the ownership of certain assets, the government can.” 

The Liberals have been trying for years to get the country’s big pension funds to invest more in Canada, with the calls reaching a crescendo in last April’s budget. Another former governor of the Bank of Canada, Stephen Poloz, has been working on ideas for how the government could make it easier for them to do so.

Numerous business and labour leaders signed an open letter in March calling on governments to amend rules—without specifying how—to encourage pension funds to invest in Canada. Several of those signatories were split this week on whether a fund along Brookfield’s lines would be a win for them and the economy.

Allen Lau, co-founder of Wattpad, said it could boost investment in Canada without compromising pension funds’ mandates to maximize returns for retirees.

Lau compared the proposed fund to the government’s Venture Capital Catalyst Initiative, where government funding helps de-risk investments for the private sector. Should the government kick in the $10 billion Brookfield has suggested, “that would change the risk profile of the investment,” he said. “I think it’s a win-win-win for everyone.” 

Jim Balsillie, the BlackBerry pioneer and longtime champion of Canadian innovation, said he’d like Canadian pension funds—whose members have to make contributions whether they want to or not—to have more of a stake in the country.

Balsillie described the funds as “creatures of the government” that tend to weigh in on policy issues. That status, he said, gives them “a duty to be a material stakeholder—and I mean that in the biggest sense of the word—of the place that creates you and that you shape.”

Still, he said, a new investment vehicle wouldn’t by itself address the reasons they don’t have that stake already.

“We have manufactured unattractiveness for investment, and so it’d be nice to have the money there,” Balsillie said. “But they’re not going to put it to work if there’s not a good return for it.” 

He added he’s particularly keen to know more about the $10 billion in direct federal investment mooted for the Brookfield fund. If Ottawa’s portion is first in line to cover losses on investments, he said, it’s essentially a subsidy. 

Labour economist Jim Stanford said he couldn’t evaluate the Brookfield proposition without knowing more details, but he’d also want to know where that $10 billion would come from and what it would be for.

He’s also skeptical Brookfield’s historical investment pattern would be suited to deploying Canadian pension money, he said.

“Brookfield globally has had a big interest in purchasing privatized public infrastructure—airports and electric utilities and other formerly publicly owned assets—and that would be the exact opposite of what I would be hoping for from a more hands-on strategy for building Canada’s capital base,” Stanford said.

He’d prefer a fund that invests in Canadian industrial innovation, equipment and machinery, he said.