Yesterday, Justin Trudeau’s office announced that Michael Sabia will become the new deputy minister of finance, as of next week.
Sabia, who’s currently the director of the Munk School of Global Affairs and Public Policy at the University of Toronto, takes over from Paul Rochon, who will become a senior official at the Privy Council Office after 6 years in the finance role. Rochon recently announced his retirement from the finance position, months earlier than expected.
Just this past April, Sabia had been named as the chair of the Canada Infrastructure Bank, the crown corporation started in 2017 that’s focused on attracting private capital investment for large public infrastructure projects within Canada. CIB’s investment mandate is about $35 billion and focuses on revenue-generating projects.
That wasn’t the first time Sabia has been involved in the management of a crown corporation.
In 1992, he became vice-president of corporate development at Canadian National Railway, eventually becoming its chief financial officer. Two years after joining CN’s executive ranks, Sabia, along with his mentor and boss Paul Tellier, oversaw the privatization of the crown corporation.
Four years after that, he moved over to BCE, the parent company of Bell Canada, eventually becoming its CEO. As the head of the company, he oversaw the elimination of thousands of jobs in a single year, despite himself receiving a 555% compensation increase.
And most recently, he was the CEO of Caisse, a public pension fund in Québec, a position he had held since 2009, and where he saw the layoff of dozens of workers.
Prior to helping to head up CN, Sabia worked in the public service. Coincidentally enough, he was in the finance department, where his wife worked: Hilary Pearson, the granddaughter of Lester Pearson, former prime minister.
Eventually, Sabia became the director-general of tax policy in the department. In fact, it was while he was there that he was tasked with overseeing tax overhaul, by David Dodge, who was then the assistant deputy finance minister. That tax overhaul included the GST, which was introduced in 1991, and Sabia actually ended up the de facto spokesperson of the new tax.
Yesterday’s announcement of Sabia’s appointment comes just weeks after comments from Mark Machin, CEO of Canada Pension Plan Investment Board, who, according to a Globe and Mail article from last month, said that “cash-strapped governments around the world should put airports, toll roads, utilities and other infrastructure up for sale to ease their current financial pains.”
“There’s so much capital chasing private assets that if governments want to raise money, they’ll get incredible prices for infrastructure assets – operating and revenue-producing infrastructure assets – wherever you are in the world. Just a ton of capital will go for it.”
Sabia had recently been acting as an advisor to Trudeau during the pandemic. It’d be interesting to know what that advice consisted of.
And what advice he’ll now provide Chrystia Freeland, Canada’s newest finance minister. Especially given his background in privatization, consumption taxation, and austerity.