Evidence of meeting #54 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was investments.
A video is available from Parliament.
1:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
I'd just like a response in hopefully enough time that I can have a few more questions afterward.
1:30 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
Let me tell you what they need, because we've gone around the world to talk to pension funds. We've spoken to the folks at the Canada Pension Plan Investment Board and we've spoken to other Canadian pension funds. They've told us they need a number of things. They need to have a pipeline of projects. They need to work with an organization that can give them a pipeline of projects, so they can see the long-term kind of investments they can make.
They've told us that they need a group of people in an institution who can contract with them so that they can actually have the ability to figure out how to have a long-term investment that makes sense.
1:30 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
They've told us that they need an agency that can help them to work with government that will be separated from government so that it will reduce their political risk over the long term.
1:30 p.m.
Conservative
1:30 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
They've told us as well that they need large projects, projects that the federal government can work on together with the provinces and municipalities.
1:30 p.m.
Conservative
1:30 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
There are multiple reasons that we've decided we need to create an institution that can bring those things to bear on behalf of the Canada Pension Plan Investment Board and other pension funds that will see opportunities to make a real difference together with us in infrastructure.
1:30 p.m.
Liberal
1:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Thank you. I appreciate that.
We have PPP Canada. Its function is at arm's length. It's there to help put together public-private partnerships. Why would you need to put together something that will take five-plus years to get the governance on, conveniently outside of your mandate? Why do we need more bureaucracy to address something, infrastructure, that previous years haven't shown can be done quickly?
1:35 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
We recognize that in order to get at big transformational projects that can allow us to partner with pension funds and institutional investors, we need to think about what those organizations need. What they need is not what we currently have. What they need is an institution that's arm's length from government, that develops a pipeline of projects and has the expertise within it to develop the contracting skills and the capacity to co-invest with those investors so that they can diminish their political risk as they go about doing this.
It is an idea that is going to have significant impact here in Canada. I expect it will be an idea that will be considered in other countries as they think about how to have the biggest impact on their infrastructure needs.
1:35 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
What will the infrastructure bank do differently than PPP Canada is already doing right now?
1:35 p.m.
Liberal
1:35 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Yes. We heard from the pension plan, and I've also spoken in the last Parliament to the public service. They believe that growth opportunities, in the pensioner's best interests, should diversify outside the Canadian economy. Even Mr. Barton, when he came to this committee, agreed that Canadian pension funds are looking to invest outside of Canada for those reasons. He also mentioned the importance of being at arm's length for their governance structure and the importance of non-political interference. You said you've already spoken to them—
1:35 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Can you commit, Mr. Minister, that you will not try to politically influence them or constrain them in a way that may put pensioners' investment monies at risk?
November 2nd, 2016 / 1:35 p.m.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you, Mr. Chair, and thank you, Minister, for being here.
I have a couple of questions in particular, so I want to get right to them.
With all due respect, some of my colleagues have suggested during pre-budget consultations that such things as social and green infrastructure don't grow the economy as much as building roads or bridges does. I personally disagree with this. In some instances, social infrastructure such as secure housing can actually have twofold benefits. There's not only the construction of the housing, but we know that secure housing can actually add to secure employment in a lot of instances.
We have also been hearing a lot about an aging workforce, but we also know we haven't a good enough representation of women, as well as indigenous communities, in the workforce. As examples of investments in social infrastructure, I mention housing, or child care spaces, or frankly, clean water in indigenous communities.
Can you perhaps elaborate and speak further to the connection between social infrastructure investments not only being the moral thing, but also growing the economy?
1:35 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
Thank you.
In identifying our infrastructure plans, we have been very clear to recognize the need for different kinds of infrastructure in order for us to be successful. We talked yesterday about our need to make significant investments in transit systems, in transportation, because we recognize that's very important for trade. It's important for people to get to and from work. We made some significant investments in trade corridors because we know that, in particular for businesses, it's critically important to get that infrastructure so they can be effective.
Those are the things that people might quickly jump to when they think about infrastructure, but your point is a valid one. I think back to when I was chairman at St. Michael's Hospital, and the doctors there would always tell me that when we think about health care, we need to think about housing first. It's fundamental to our economy that we have the capacity to provide housing for people so that they can be effective participants in our workforce, so that they can actually share in the benefits that we're trying to create through our growth efforts.
Social infrastructure, building housing, can be a very important foundation from which we can be successful as an economy. That's one of the key reasons we've put a significant amount of infrastructure money into that area. We believe that creating housing can actually be a generator of immediate economic growth in terms of jobs, as well as long-term economic stability.
Concerning the green infrastructure, I think all of us know that life would not be quite as good if we didn't have waste water systems that worked, so as we have impacts from climate change, which are really happening across our country, we need to think about how we respond to those. Having the infrastructure that can enable us to be successful there is critically important. We will continue to think about all forms of infrastructure as critically important to us as we build an economy that will work for today and for generations to come.
1:40 p.m.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Concerning my second question, I would be doing a disservice to my past life as a municipal councillor for 10 years—and I apologize, because my colleagues have probably heard that quite a bit—if I didn't mention that I've already seen that FCM, the Federation of Canadian Municipalities, is very excited about the infrastructure bank. I know my first question when I go back home or see any of my former council colleagues will be on how they can access these funds, what the timeline is, and specifically, whether there will be a piece that is really focused on green investment and renewables. I know in my municipality, when I was on council, in deciding between fixing a bridge that is absolutely critical and reaching end of life versus retrofitting your snowplow fleet, it's a nice thing to do but you might not be able to afford it.
Is there going to be a focus on those projects that will help us in the changing world? In terms of climate change and adaptation, will there be specific funding to help municipalities if they're the ones accessing this money to focus on projects such as that, which might not have been the top priority in all the things that municipalities have to deliver?
1:40 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
It's a good question. I think the best way to answer it is to point out that our infrastructure plan is a significant plan. It's a plan that includes a significant amount of funding in the buckets that I talked about in the last response. It also includes the Canada infrastructure bank where $15 billion of the funding will be, and where $20 billion of repayable capital will be as well.
There will be some projects that will absolutely be perfect for the infrastructure bank. There will be many projects, infrastructure approaches, that will not be appropriate for that bank because they won't be big enough to have the potential to be attractive to pension funds.
Over the last few days I've spoken to a huge number of mayors across the country, in Edmonton, Calgary, Montreal, Quebec, Toronto, Ottawa. They've all been very enthused not only because they can see those transformational projects but also because they realize that if they can get at those transformational projects in a way that allows them to access other sources of funding, it will leave them more funding to do what they might need to do, whether it's to repair the snowplow fleet or other things that of course municipalities will have to do.
We see this as an additive to our impact on the economy. It'll have a huge impact on municipalities because it will give them more capacity to do more things that they need to do for citizens.
1:40 p.m.
Liberal
