Canadians are open to pension funds playing a bigger role in the country’s infrastructure, even as they look first to governments to pay for new projects, according to a new survey commissioned by Melbourne-based pension fund manager IFM Investors. 

Nearly two-thirds of the roughly 3,000 of Canadians polled said the country needs “a good deal more” infrastructure to support its economic ambitions. The strongest demand was for hospitals, the electricity grid, schools, water and sewer systems and highways. 

Asked who should fund the new infrastructure, 49 per cent said the government should mainly pay using tax dollars or debt, compared with 21 per cent who said investors, such as pension funds, should foot the bill. Twenty-nine per cent had no strong view. 

When pressed on the subject, 39 per cent of respondents said they “support” the idea of “pension capital in new Canadian infrastructure,” while 28 per cent said they were “willing to go along with it.” Fifteen per cent opposed the idea. 

The survey lands ahead of the Canada Investment Summit in Toronto next week, where Ottawa is looking to drum up investment from hundreds of global CEOs, asset managers and public officials. Prime Minister Mark Carney has set the goal to bring in $1 trillion in public and private investment over the next five years to help pay for large infrastructure projects. 

IFM, which manages about $287 billion in assets for Australian and U.K. pension funds, said it is prepared to invest up to $10 billion in Canada over the next decade if the right opportunities are available. The firm has been pressing Ottawa to give pension funds more opportunities to back publicly owned assets such as airports, roads and ports. 

Not everyone supports the idea. A coalition of labour, Indigenous and climate groups is planning a protest to coincide with next week’s summit, arguing that Ottawa’s investment push risks putting public infrastructure in the hands of private investors that have mandates to protect shareholders’ interests and not the public’s. 

The survey shows many Canadians are open to pension fund involvement in infrastructure—under certain conditions. 

More respondents—36 per cent—preferred having governments retain ownership of an asset while leasing it to a pension fund for a period of 50 to 99 years. Under that scenario, the pension would operate the infrastructure and invest the money they earn from it. Another 32 per cent of respondents, however, said they’d rather the government continue to own and operate the assets. 

The appetite for the model depends on the type of infrastructure in question. For existing hospitals, schools and defence infrastructure at least 50 per cent of respondents preferred the government own and operate the assets. Respondents were more open to long-term leasing to private investors for broadband networks, wind farms and student housing. On airports, 40 per cent preferred government operation compared to 37 per cent in favour of long-term leasing. Forty-one per cent were in favour of private leasing for both railways and high-speed rail lines. 

Respondents were also considerably more comfortable with the idea of Canadian investors than foreign ones. Eighty-six per cent either welcomed or accepted Canadian pension funds operating public infrastructure compared to 65 per cent who were open to foreign pension-fund operators. Respondents were more open to European and Australian fund involvement compared to U.S. pension funds. 

Those who were concerned about private investment in public infrastructure cited personal and economic costs. Seventy-seven per cent were at least somewhat worried that service prices could rise to unacceptable levels. The same share worried about profits leaving Canada if a global pension fund ran the asset. About 70 per cent were concerned about losing public control or services deteriorating, and the same share worried about the impact on Canadian jobs. 

IFM found those concerns could be tempered if governments attached specific terms to the investments. For example, 77 per cent of respondents said they would be more supportive of private operation of public assets if the money governments raised through the deals went to health care, while 76 per cent said the same if proceeds were used to build new infrastructure. Nearly three-quarters said limits on prices would make them more comfortable, with a similar share saying they’d feel better if governments set clear standards for services private operators would have to provide. 

The questions attempt to gauge the public’s appetite for a model IFM calls “asset recycling,” where governments lease or sell mature public assets such as airports, toll roads or ports and reinvest the money into new projects. It’s become a common way to fund infrastructure in Australia, and something IFM is trying to bring to Canada.

In March, the asset manager struck an agreement with nine Canadian pension funds to look for investments they could make together, part of what IFM executive Gian-Carlo Peressutti previously told The Logic was an effort to carve out a new market for pension investment in public infrastructure. 

IFM is leading Australia’s delegation at the summit taking place on Sept. 14 and Sept. 15. Peressutti has said he expects the firm to leave Toronto with deals signed.