The late-80s and early-90s saw the Canadian government divest itself from some of its largest state-owned businesses (known in Commonwealth countries as Crown Corporations) – particularly when it came to transport and energy companies. In a sweeping implementation of Thatcherism led by Conservative premier Brian Mulroney, Ottawa privatized aerospace companies Canadair and de Havilland in 1986, sold off Air Canada in 1988, liquidated its majority stake in Petro-Canada in 1991 and finished selling off its shares in CN (the Canadian National Railway Company) in 1995. But after General Motors emerged from bankruptcy in 2010, the Canadian federal and Ontario provincial governments (and, when it comes down to it, Queen Elizabeth II) found themselves among the largest shareholders in one of the biggest automakers in the world. And so they remain today, but that’s all about to change.
In a public address on Friday, Finance Minister Charles Sousa announced the implementation of a new policy that would see the Ontario provincial government sell off a large portfolio of assets. On the docket are such state-owned assets as the Liquor Control Board of Ontario (which has a monopoly over alcohol sale across the country’s second-largest and most populous province), utility companies Hydro One and Ontario Power Generation, some valuable pieces of real estate… and the province’s shares in GM.
According to Bloomberg, the provincial government is convening a panel to determine how best to sell off the assets, to be chaired by TD bank chief Ed Clark and populated by such notables as former provincial finance minister Janet Ecker and former Canada Pension Plan Investment Board chief David Denison. Funds raised by the sale of these assets will be reinvested in infrastructure and not applied towards the provincial debt that is fast approaching $300 billion (in Canadian dollars).
Back in August we reported that the Canadian federal government was also planning to sell its stake in GM, but today the government-owned Canada Development Investment Corporation remains the company’s second-largest shareholder with over 110 million shares, behind the UAW healthcare trust with precisely 140 million shares. The Canadian governments may, however, want to wait for GM’s stock prices to recover in the wake of the recall scandal before it begins offloading.