Welcome to Economic Insights, your twice-weekly deep dive into the major projects and policy shifts shaping the Canadian economy.

Stories we are following:

– Internal Liberal polling found public support for airport privatization, source says.

By handing four major airports to private operators, the Carney government is taking a step previous Liberals avoided for many reasons, including concerns about public opposition. 

But a Liberal caucus member tells iPolitics the party’s internal polling on the issue predicted minimal backlash this time around.

“What our internal polling shows is support for privatization, I think people are not really concerned one way or another,” said the source.

“Questions may start to arise around how you’re going to spend the money. So if you have a credible, clear answer on how you’re going to deploy the capital, then you get support for privatization.”

More on that here.

– Airport sales and tax breaks: Carney’s play to lure global investment. 

We have this rundown on how the privatization plan would work, including how Carney is pushing back against the idea that the move will make travelling more expensive. 

“There are several aspects to an airport… restaurants, store, and the management of that aspect is very important,” he told reporters. “There’s a yield from that, it has nothing to do with the price of tickets.” 

He also suggested that revenue from concessions could eventually be reinvested into smaller regional airports. 

“We have a need to invest in the transportation sector, especially in regional airports…and through this process, we will have the funds to do that.”

While the plan may enable the federal government to raise billions of dollars, the “productivity super-deduction” announced Tuesday is set to cost $36 billion over five years, beginning in 2026-2027.

– Investment summit nets billions in commitments, but deals will take time.

Canada’s first investment summit saw leading pension funds, insurers and institutional investors pledge to invest billions of dollars across a wide range of sectors, but which projects will actually benefit remains to be seen.

Prime Minister Mark Carney says his government will track whether the trillion-dollar investment goal for the summit is met. 

Starlight Infrastructure Solutions leader Kristopher Wojtecki tells iPolitics many interesting projects were highlighted during the investment summit, but it will take time before deals materialize. 

“Doing private investments takes time,” he said. “You meet a partner, you have to underwrite the partner, conduct partner due diligence, and perform overall due diligence on the investment itself, on the risk-adjusted return.” 

We have that story.

By the numbers:

$36 billion: The number of billions of dollars in foregone federal government revenue because of the expansion of the productivity super deduction.

$105.59: The price of Brent Oil Futures at time of writing. 

$140 million: The size of Canada Growth Fund’s latest investment in Generation Mining limited, a promising copper and palladium mine project in northwestern Ontario.

Major projects watch:

– As Bloomberg reports, the talk about a slowdown in AI development is a threat to the market. It’s adding to existing concerns over valuation and momentum, which is a polite way of saying plenty of investors think this is a bubble. 

– The Canada Revenue Agency will prioritize advance income tax ruling requests related to investments of $1 billion or more in Canada. This measure is in effect as of today.

– Ksi Lisims LNG signed a preliminary 20-year LNG supply agreement with Australia’s Santos. The pending deal signals global interest in the project, which still awaits a final investment decision.

– Premier Danielle Smith said Saturday it’s “unlikely” her government will create a Crown corporation for natural gas pipelines, despite a leaked cabinet report recommending two Crown entities to address the issue. Smith acknowledged dozens of companies are struggling to access natural gas and said the province is exploring solutions, though preferring to work with the private sector for now. CP has more.

– The CEO of the company behind the proposed Sisson Mine says there will be no shortcuts in complying with the New Brunswick government’s environmental conditions. Andrew Ing told CBC News that current best practices in the mining sector — and the higher cost of meeting them — are one  reason the estimated cost of the mine has jumped from $579 million in 2013 to $1.5 billion today.

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