Transport Committee on April 18th, 2023

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Chair, thank you for the question.

I certainly wouldn't want to think that our government in any way would participate in a public transit death spiral. I think the record will show, during—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

No, the question was if you could characterize their concerns, which they've expressed to you, with regard to the public transit death spiral.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

I don't share the view that there's a death spiral. If you look at the significant investments our government has made in public transit, you see that it has been historic, including accepting the request of the Federation of Canadian Municipalities for a permanent, recurring $3 billion annual public transit fund.

I do get the concern around operating costs. That is an issue I have discussed with the Federation of Canadian Municipalities and mayors of big and small cities across the country. We recognize that COVID-19 has been an enormous challenge. We needed these systems to operate to take essential workers to work at a time when others weren't able to do so, or who were safely, perhaps, staying at home. That opened up a real concern around some of this ridership. Remote working, teleworking, has also reduced, in some cases, ridership.

The Government of Canada doesn't operate transit systems. We don't presume to know what the appropriate service standard that a municipal or provincial transit authority might like to undertake. We do recognize these financial pressures. We have evolved the federal support for transit from simply expanding transit networks to looking at rolling-stock repairs, because transit authorities were saying to us that expanding is very expensive, very important, but dealing with the state of good repair of current transit infrastructure is something that we could do. Our government so far, other than during the COVID-19 emergency payments to provinces, has not supported the operating costs of transit authorities.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach.

Thank you once again, Minister.

Next we have Mr. Strahl.

Mr. Strahl, the floor is yours. You have five minutes.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

Thank you, Minister.

As you know, this committee has committed to undertaking a study of McKinsey & Company's role in the creation of the Canada Infrastructure Bank.

You are listed in that motion as one of the people we would like to hear from. I'm wondering if we can get your commitment today that you will come as a witness as part of that testimony, if your schedule permits it. I'm sure the committee would be willing to move the meetings to make sure that you are able to participate.

Will you come and participate in that study?

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Through you, Mr. Chair, thank you to my friend, Mr. Strahl, for the question.

We have obviously followed the committee's conversations, including the government operations committee, around looking at the Infrastructure Bank's contracts with McKinsey.

I, of course, played no role in those contracts whatsoever. I didn't know about them until we saw them reported publicly. I don't purport to give direction to the executives of the bank or to the board around who, in their judgment, they should be contracting with for what particular services.

I'm not sure I could add very much. It would be a very boring meeting if I were to come and talk about something of which I have absolutely no knowledge.

I know you're thinking that hasn't prevented me from talking about things like that in the past. I could see the look on your face, and I take the teasing.

I do think the best place to start would be with the CEO of the Infrastructure Bank, Mr. Cory, and the board chair. Tonight when the deputy and I see them, we will ensure.... I think the CEOs may be here on May 2. We'll make sure they're available as well.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

We believe in ministerial accountability, and despite the fact that you weren't the minister at the time of the bank's creation, you are the minister now, and it's very disappointing to hear that you won't make yourself available for that committee hearing. I would ask you to reconsider that when you meet for dinner tonight with the executives at the bank, because we did find.... Obviously there's $1.43 million in contracts, both tendered and untendered, that went to McKinsey.

When President Biden was here, the Prime Minister's Office did a news dump that day. One of the things they revealed was that the Prime Minister stayed in a $6,000-a-night hotel suite in London during the Queen's funeral. The second thing they dumped that day was that several of the McKinsey contracts broke Treasury Board guidelines. They didn't follow the rules.

As far as you know, did any of the contracts that were awarded by the Canada Infrastructure Bank break Treasury Board guidelines, as was revealed by the PMO when President Biden was here?

[Dominic LeBlanc, Liberal, Beauséjour, NB]

I'm informed by my deputy that all of these contracting rules were appropriately followed. The bank, as an independent Crown corporation, sets its own contracting practices.

Again, my understanding is that those rules were followed as would be appropriate, but the CEO, Ehren Cory, would be the best person to review those particular contracting issues as well.

I know that the CIB has provided the Chair with written documentation on these matters to the House of Commons. I think on March 29, at a different committee, a senior partner from McKinsey also appeared.

I will endeavour to ensure that the bank provides all of this information, because I share, Mr. Strahl, your understandable concern with respect to these practices.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Well, with respect, Minister, the CEO is not the person who is responsible to Parliament for the Canada Infrastructure Bank. That is your job, and that's why we believe you should be a part of the hearings on that. We don't hold that CEO accountable; we hold you accountable as the minister responsible for that.

I think it is interesting to note that this committee has unanimously recommended that the Canada Infrastructure Bank, for numerous reasons, including value for money, be disbanded. I hear Liberal MPs today, who perhaps weren't a part of that study...and perhaps that's why those members are no longer on this committee. I would certainly suggest, however, that to put it as a Conservative recommendation that the Bank be abolished is incorrect. It was this committee, unanimously, including Liberal members, that recommended that for the reasons you've heard today—value for money and bonuses to staff for producing press releases instead of projects.

We hope you will come back, that you will reconsider this and be here to talk about the role that McKinsey had in the Infrastructure Bank and the political decisions that were made to make that happen.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Well, Mr. Chair, obviously—

[The Chair, Liberal, Peter Schiefke]

Unfortunately, Minister, there's actually no time left for a response.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

I had such a good answer.

[The Chair, Liberal, Peter Schiefke]

I'm sure you did, Minister.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Maybe Mr. Strahl shouldn't talk about information dumps if he ran the clock on the question and then didn't allow me to answer. That would be very inconsistent with his concern about the Biden visit.

[The Chair, Liberal, Peter Schiefke]

I just want to ensure that I'm going to respect the time of Mr. Rogers, who now has the floor, and will bring us home.

Mr. Rogers, the floor is yours.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Chair.

Welcome, Minister.

Now, as my memory is failing me, I don't recall that being unanimous, Mr. Strahl.

Minister, my riding of Bonavista—Burin—Trinity has 256 communities, some of them very small, down and along the coastline, and many peninsulas and so on. Since 2015 we've been fortunate to have had 221 project approvals through Infrastructure Canada, as it's really helpful for these rural communities like mine to have access to infrastructure programming. Otherwise, things wouldn't get done.

Minister, can you, tell us more about how the federal government is helping small and rural communities access funding across the country?

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Thank you, Mr. Chair.

Thank you, Mr. Rogers.

You correctly identified a concern that I share, and I've shared this with the deputy and our senior officials as well. The infrastructure department, understandably, is often preoccupied with multi-billion dollar mega projects in the transit sector and greening electricity grids. These are very important for the economy of the country, for people who live in large urban centres and for a bunch of reasons in terms of fighting climate change, but we also need to be conscious that a small investment.... There's a water project, for example, in your riding. Two projects have been approved that haven't yet started construction—a water treatment plant and a water storage tank. The work will begin this spring and in the fall of 2023. The watermain projects were started in May of 2022.

A number of these smaller community projects.... I asked for examples of the kinds of projects in small rural communities you would represent in Newfoundland and Labrador, Mr. Rogers. Some of these investments can be as small as $365,000 from the Government of Canada, but combined with the money that the municipality and the province of Newfoundland and Labrador put in, they allow these small communities to do projects they would otherwise not be able to do.

Your riding is not dissimilar to mine in this respect. There's a small town in Kent County, New Brunswick called Rexton, in the northern part of my riding. If they had to upgrade their water system to maintain its health and safety, if they had to put that on ratepayers in their municipalities or the tax base of their small rural village, it would simply not support these investments, which people understandably expect governments to work on collaboratively.

Your province has been a great partner for us, Mr. Rogers, in the last number of months. When I was here last, the Province of Newfoundland and Labrador had one of the largest balances of unallocated money, including for projects in smaller communities like the ones you represent. Premier Furey and his government have been extremely effective in working with us.

The good news is that we got that amount of unallocated funding down to zero, which means that many of those very projects that you're concerned about and have talked to me about for communities in your constituency are going to be funded.

I'm hoping that you'll have a very busy spring and summer announcing a lot of this good news in your riding, Mr. Chair, and we would welcome, obviously, you, yourself, announcing projects too, Mr. Chair. I don't want to pretend that it was only Mr. Rogers who could have this opportunity.

[The Chair, Liberal, Peter Schiefke]

Well, thank you very much, Mr. Rogers.

On behalf of all committee members, once again, Minister, I want to say thank you for appearing before us today and for answering all of our questions.

With that, this meeting is adjourned.