Analysis of Canada’s multibillion-dollar infrastructure spending initiative is raising a number of red flags.
The Canada Infrastructure Bank (CIB) is off to a sluggish start investing in revenue-generating projects and attracting private-sector capital to reduce costs to the government, according to a March 23 Parliamentary Budget Officer (PBO) report.
The CIB is a federal Crown corporation and one component of the Investing in Canada Plan (IICP), launched in 2016, which aims to commit over $180 billion in taxpayers’ money for infrastructure over 12 years.
The PBO states that in about four years of operation, the CIB has invested only $1.23 billion of its $35 billion mandate—just 3.5 percent—and has received 420 project proposals, but it has only finalized investment in two of those projects, neither of which has any private-sector participation.
The CIB aims to attract capital from private-sector investors as well as institutional investors, such as mutual funds, pension funds, and insurance companies.
In 2016, then-finance minister Bill Morneau said the CIB aimed to attract “pension funds and institutional investors for four or five additional dollars” for every federal dollar.
While the CIB has not attracted strictly private capital, spokesperson Félix Corriveau told The Epoch Times that one of the two finalized investments—a $6.3 billion transit project in Montreal—attracted a $3.2 billion investment from CDPQ Infra, the infrastructure investing subsidiary of Caisse de dépôt et placement du Québec, a provincial Crown corporation that manages several pension plans and insurance programs in Quebec.
“We need to attract new investments from everywhere,” wrote Minister of Infrastructure and Communities Catherine McKenna in a recent statement of priorities and accountabilities letter.
Fixing the CIB
The Opposition Conservatives, in a statement by former leader Andrew Scheer, who is now shadow minister for infrastructure and communities, and Luc Berthold, shadow minister for the Treasury Board, said they’d scrap the “failed” CIB.
The CIB is still salvageable, but the government has to understand the mistakes it made, Carleton University business professor Ian Lee told The Epoch Times.
“Recognize that just redefining something [as infrastructure] doesn’t make it so. Let’s go back to old-fashioned … traditional infrastructure,” he said.
Lee’s criticism of the CIB is that the government is trying to dictate the kind of infrastructure the private sector should be partnering with it on—laden with social and ideological objectives that create red tape. But he points out that the private sector, above all, needs a profitable revenue stream, as it’s not supported by taxpayers.
