Infrastructure Bank narrows gaze to more than a dozen projects, CEO says
January 28, 2019 by Jordan Press, The Canadian Press
OTTAWA—The federal agency built to find new ways to pay for new Canadian infrastructure says it is deep in talks on over a dozen projects.
In the fall, officials with the Canada Infrastructure Bank had more than 120 meetings about more than 60 projects across the country, including some that came unsolicited from the private sector. The bank’s mission is to find ways to get private money to pay for public projects that will produce revenue, such as toll roads and transit systems and trade portals.
Officials have narrowed their focus to about a dozen possibilities for serious consideration, but details about them will only become public if the agency agrees to back work with loans or equity stakes.
The bank’s political critics say the bank is acting in secret with billions of public dollars and hasn’t gotten much done anyway. The agency says making the projects public before deals are signed could cause financial harm to their public owners and private backers.
Infrastructure Bank CEO Pierre Lavallee says there is a negotiation process for any projects under serious consideration that includes the sharing of confidential financial information that can’t be made public.
“The CIB will be one of many partners involved in a project. Since we are an investor, we will have to respect commercial confidentiality with the other partners, especially the owners or sponsors,” Lavallee said.
“When decisions are made for CIB to invest in projects, then there will be information shared with the public.”
The Liberals created the agency in 2017, hoping to use $35 billion in federal funding to pry three to four times that from the private sector to pay for new infrastructure projects that are in the public interest. In practice, that means projects need to meet federal policy objectives, along with those of the jurisdiction housing a particular project.
Projects also need to be “bankable,” meaning they could attract private dollars and “appropriately transfer revenue risk to the private sector,” read part of Infrastructure Minister Francois-Philippe Champagne’s briefing binder, obtained by The Canadian Press under the federal access-to-information law.
Internal government documents previously obtained by The Canadian Press have suggested the bank could provide a loss buffer to the private sector, and bear some risk to help projects get completed.
The briefing binder says the bank planned to develop a “national project pipeline” over the next year. The aim was to “catalyze the market” by listing “projects at various stages,” including those the agency “might view as potential investments.”
“The first version of this project inventory is expected to be operational in the coming months and will develop over time, based on how government partners use the new tool for planning and prioritizing opportunities and challenges that could interest investors,” said Ann-Clara Vaillancourt, a spokeswoman for Champagne.
Although the body is arm’s length from government, it won’t be out of reach from political rhetoric in an electoral year.
So far, the bank has signed a financing agreement for one project — a $1.28-billion loan for an electric rail transit system in Montreal, best known by its acronym R.E.M., which the Liberals identified as an early win for the agency.
The loan replaced the same amount of money the Liberals had pledged through traditional funding programs.
Conservative infrastructure critic Matt Jeneroux said the agency is costing taxpayers millions of dollars in operational expenses, absent “transparency or accountability regarding infrastructure investments.”
Jeneroux said the lack of projects from the bank “except for the one that was re-announced” suggests the agency isn’t living up to the promise the Liberals made.
“At the end of the day, when it comes to infrastructure projects, talk is cheap.”
NDP infrastructure critic Brigitte Sansoucy said the bank has a “track record of secrecy and inadequate public engagement” that has frustrated municipalities and stakeholders. She questioned whether the agency would work in the public interest, or for private funders.
“We need to ensure that infrastructure projects actually meet the Canadian public’s infrastructure needs and not the private sector for their revenue-generating potential,” Sansoucy said.
“We have serious doubts this will happen under the leadership of this government, especially with how they’ve structured this institution.”
Both parties said any policy promises they intend to make about the bank will be released in the coming months.