The NDP claims its new bill, C-245, will turn the Canadian Infrastructure Bank from a “corporate slush fund” into an agency that benefits northerners. Proponents say the bill could benefit communities on the front lines of climate change.
Bill C-245, being debated in the House of Commons on Wednesday, was first tabled by Manitoba MP Niki Ashton in February. The bill amends the Canada Infrastructure Bank (CIB) Act, introduced by the Liberals in 2017.
The Canada Infrastructure Bank, a federal financing agency, exists to help fund major public infrastructure projects using a combination of public and private money. Projects funded to date include an electric rail line in Montreal, an irrigation system in Alberta and a fleet of zero-emission buses for areas in Ontario and Quebec.
In its five-year existence, the bank has come under fire from both the NDP and Conservatives for being unable to meet its targets. The parties argue the bank has so far failed to see any of its projects through to completion.
In 2020, Conservative MP Andrew Scheer told the Canadian Press the bank “is a lemon of an institution.”
Ashton claims the biggest issue with the financing agency is its fundamental structure: by nature, having to woo major private sponsors for projects incentivizes profitable ones.
“The whole idea of having private investors – obviously, they’re expecting to gain something,” Ashton told Cabin Radio on Tuesday. “With a for-profit model, right off the bat, that precludes a lot of discussions around the needs of Indigenous and northern communities.
“It’s a Crown Corporation set up so that it’s essentially a corporate slush fund.”
Ashton argues her bill changes the bank in the North’s favour by requiring it to focus on projects that mitigate or adapt to climate change and are not harmful to the environment. (The bank is already legally restricted to projects in five sectors: public transit, green infrastructure, trade and transport, broadband, clean power and Indigenous infrastructure.)
Inability to find sponsors
Ehren Cory, the bank’s chief executive, has defended the speed at which projects are moving.
Cory has in the past said that is the nature of large-scale projects, that public-private partnerships require patience. In 2020, he told CTV “a more important figure is the number of funding commitments.”
While the CIB website currently lists 34 projects on the go, a 2021 non-partisan report by the parliamentary budget office calls those figures into question. The office found that of the 17 projects announced by 2021, only two had reached financial close, an important metric for determining success.
“Until a project reaches financial close, there is a risk that the terms of investment may fall through or change,” the report stated.
Of those two, a 2020 status update noted: “There is no evidence that any private investment has been leveraged. CIB’s two current projects are exclusively funded by federal, provincial and municipal levels of government.”
Since the 2021 update, just two more projects have reached close.
The report chalked up significant delays and dropped projects to many issues, among them an inability to secure a private-sector sponsor and financial reasons such as a “lack of repayability.” These delays also result in capital losses due to accumulating interest and loan loss provisions.
While some of these issues could be considered structural – the report states that “funding delays are pervasive for public-private infrastructure investors” – even by the standards of public-private partnerships, the report found that “CIB’s disbursement flows are progressing somewhat below the average rate.”
“Triple-P partnerships don’t deliver the goods, basically,” said Ashton. “They cost more, they saddle the taxpayer and there’s a number of concerns in terms of the quality of service that’s delivered.”
Will bill benefit NWT?
While CIB is mandated to invest $35 billion in infrastructure over 10 years, as of 2020 the bank had only invested $1.23 billion, or 3.5 percent of its mandate.
Whether Ashton’s bill would make any difference to that is not clear. In the parliamentary budget officer’s 2021 report, he predicted that, “Irrespective of changes to project criteria, systemic challenges in quickly disbursing funding could be expected to continue throughout CIB’s 11-year mandate.”
In the NWT, Frame Lake MLA Kevin O’Reilly remains excited about the NDP bill. O’Reilly has long voiced deep skepticism of public-private partnerships like the territory’s Deh Cho Bridge and Stanton Territorial Hospital.
“C-245 proposes a compact but focused set of changes to the bank that would clearly benefit residents of the NWT in terms of future funding and a clearer focus on northern priorities,” O’Reilly said in a statement delivered to the legislature on March 30.
An important component of Ashton’s bill refocuses the bank on investment from public institutions, as well as structuring the CIB board to include three people recommended by Indigenous organizations representing the interests of Métis, Inuit and First Nations people.
Bill C-245 would also require CIB to submit an annual report with more detailed information about its activities.
“The bank is not currently required to report to parliament annually. We believe that’s wrong,” said Ashton.
“We’re in a time of climate emergency, an emergency that is disproportionately impacting the North. This bank needs to deliver for Canadian communities. And the way to do that is through public ownership and by centring public investment.
“When we’re talking about survival, you know, this isn’t something people should be making money off of. It just needs to get done.”