During some of the most challenging months faced by any Prime Minister, Justin Trudeau often relied on Michael Sabia for policy advice throughout the COVID-19 pandemic.
Now Mr. Trudeau is inserting Mr. Sabia into the centre of the government’s financial decision making as it prepares a package of stimulus measures that could be worth up to $100-billion over three years.
The former Quebec pension fund CEO and current chair of the Canada Infrastructure Bank was announced Monday as the next deputy minister of Finance Canada. Mr. Sabia will replace Paul Rochon, who announced last week that he was leaving the department.
A senior government official said Mr. Sabia, along with former Bank of Canada governor Mark Carney, is among the small circle of informal advisers who have been on Mr. Trudeau’s speed dial throughout the pandemic.
Sources familiar with recent events say Monday’s announcement followed two weeks of intense behind-the-scenes efforts by the government to convince Mr. Sabia to accept the position. Mr. Sabia also has a close relationship with Finance Minister Chrystia Freeland that sources say includes frequent policy discussions over the phone.
The sources said the 67-year-old, who worked for the Finance Department and the Privy Council Office earlier in his career, was not seeking a return to the federal public service and the assignment is viewed as a short-term role that will focus on the postpandemic economic recovery.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly about the matter.
Mr. Rochon’s departure was announced last week, the day after Ms. Freeland released a fall fiscal and economic update that said Ottawa will be working on a recovery plan that could cost as much as $100-billion over three years. The update also said this year’s deficit is forecasted to be $381.6-billion.
Mr. Sabia takes the job as the Canadian economy is still about 600,000 jobs shy of prepandemic levels. The federal government has approved levels of deficit spending that haven’t been seen since the Second World War and Ottawa is facing pressure to provide outline a plan for fiscal sustainability. Ms. Freeland’s update said those details will come, but not until the immediate needs of the pandemic crisis are addressed.
The Trudeau government has regularly relied on Mr. Sabia for policy advice since 2015, and his views on how Canada should manage the pandemic and an eventual recovery plan are on the public record.
In a March 22 opinion piece for The Globe written just as the scope of the COVID-19 crisis was becoming apparent, Mr. Sabia advocated for an aggressive “whatever it takes” fiscal response that would shelve concern over deficits in order to stabilize the economy. Even then, Mr. Sabia was making recommendations for a recovery plan.
“Remember Rahm Emanuel’s famous: ‘You never want a serious crisis to go to waste,’” Mr. Sabia wrote, in reference to the comment made by then-U.S. president Barack Obama’s chief of staff during the financial crisis of 2008-09.
“That means governments need to begin thinking now about a new generation of infrastructure and spending on education. About clean tech and retooling our health-care system. And about refinancing for the long term a small and medium enterprise sector that will emerge from this crisis battered but still the engine of jobs in our economy.”
Two weeks after those comments were published, Mr. Trudeau named Mr. Sabia to chair the Canada Infrastructure Bank as part of a shake-up of the Crown corporation’s senior leadership.
The bank has a $35-billion budget and is mandated to attract private capital investment for large domestic infrastructure projects. In October, Mr. Sabia appeared alongside the Prime Minister to announce a $10-billion plan for the bank that would see it focus on environmentally-themed projects and contribute to a postpandemic economic recovery.
Now, just eight months into his leadership position at the bank, the government has new plans for Mr. Sabia. Mr. Sabia will step down from his role at the infrastructure bank; legislation prevents civil servants or politicians from serving on its board.
The deputy minister is the senior public servant in a department. The job involves providing non-partisan policy advice to the minister, overseeing the management of the department and working on government-wide policy issues with other deputy ministers.
Mr. Sabia will start his new position on Dec. 14.
Monday’s announcement said Mr. Rochon will move to the Privy Council Office as a senior official.
The move is the latest in a series of leadership changes among the government’s financial decision makers. Ms. Freeland was named finance minister in late August after the surprise resignation of Bill Morneau, who left politics to campaign to head the Paris-based Organization for Economic Cooperation and Development. The year also saw the scheduled retirement of Bank of Canada governor Stephen Poloz, who was replaced by Tiff Macklem. The bank’s senior deputy governor, Carolyn Wilkins, later announced she would be leaving the bank as of Dec. 9.
Mr. Sabia was part of an influential economic advisory panel that issued reports in 2016 and 2017 calling for the creation of the infrastructure bank and significant increases to Canada’s immigration targets, among other suggestions that were generally adopted by the government.
At the time, Mr. Sabia was CEO of the Caisse de dépôt et placement du Québec, the provincial pension plan, where he oversaw the launch of Montreal’s REM light rail project, which later obtained infrastructure bank funding and is viewed as a model for how pension funds can contribute to public-interest infrastructure.
Prior to his time at the Caisse, Mr. Sabia was CEO of Bell Canada and chief financial officer for Canadian National Railway, in addition to his work in the federal public service.
The announcement of Mr. Sabia’s new role was welcomed by prominent business groups such as the Business Council of Canada and by leaders who have worked with him over the years.
Former Clerk of the Privy Council Paul Tellier, who worked with Mr. Sabia in government and later in private sector positions, said Mr. Sabia is an outstanding individual with a strong strategic mind.
“He has a tremendous sense of duty and no doubt that he was courted [for] many weeks by the government to take this on,” he said in interview. “It will require a lot of sacrifice on his part, but this is what Michael Sabia is all about.”
Conservative and NDP MPs, who have long criticized the infrastructure bank concept promoted by Mr. Sabia, were less enthusiastic.
“We have strong, strong concerns about Mr. Sabia coming in,” NDP MP and finance critic Peter Julian said. “He’s been the promoter of privatization.” The Canadian Union of Public Employees expressed similar concern Monday.
Conservative Leader Erin O’Toole noted that he was in high school when Mr. Sabia last worked as a senior federal public servant.
“So it’s interesting to see him back,” he said. “I’m going to hold Mr. Trudeau and Ms. Freeland to account for their lack of a plan for the economy.”
With a report from Sean Silcoff
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