Finance Committee on June 22nd, 2020

[The Chair, Liberal, Wayne Easter]

Mr. Cooper, followed by Ms. O'Connell.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you, Mr. Chair, and thank you to the witnesses from the Canada Infrastructure Bank for appearing.

I want to go through some of the projects to get a better understanding of the role of the Canada Infrastructure Bank. Upon reviewing the 10 projects, is it correct that four are strictly in an advisory capacity?

[John Casola]

That's correct. That reflects the stage those projects are at, for the most part.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

The other project for which there is a memorandum of understanding is the Lulu Island energy company project. That project will likely be more than a strictly advisory capacity. Is that correct?

[John Casola]

That's correct.

Just to clarify, as Annie discussed earlier, a very important part of our mission is our advisory capability and capacity. To be clear, most of that capacity will be focused on early-stage advice on projects in which we think there is a possibility or the potential of an investment down the road.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Okay, so four advisory projects, one in its very early stages, a $1.28-billion investment in the REM, which simply replaced $1.28 billion of funding that the federal government had committed in 2017. That essentially leaves the Canada Infrastructure Bank with three projects. One is the GO Expansion—On Corridor project, which may or may not have already been committed to before, and then three relatively small infrastructure projects: $55 million for VIA Rail, $20 million towards green infrastructure for the Town of Mapleton, and then the Montreal Port Authority project. That's it; is that correct? Am I missing something?

[John Casola]

I believe the status of the projects is correct.

You're not missing anything. We would disagree that's the measure of progress because of all the necessary and time-consuming work that had to go on before we reached the stage of announcing the projects.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Putting aside whether or not the Infrastructure Bank is a good model for a good concept—and I would certainly endorse the comments made by Mr. Poilievre—certainly, from the standpoint of rolling out dollars, investing in large transformational projects, after three years that doesn't sound like a success.

I note that on page 15 of the annual report for 2018-19, it states, “We expect to invest approximately $1.5 billion to $4 billion per year in the near term”. I note no investments in 2020. Am I missing something?

[John Casola]

Honestly, again I think it's important to reiterate some important facts.

The bank has been functionally operational for 18 months. That's a fact. You can't close deals without people, policies, structure in 18 months.

The level of activity, the number of activities, to invest intelligently and in a disciplined manner.... In 18 months we were building up a team; setting policies in place; meeting with all the public sector sponsors across the country; forming those relationships; looking at those priority projects all across the country; and then whittling down the ones that would have the greatest likelihood of a potential investment and that meet all the criteria, and beginning to work on them. From the perspective of being operational in 18 months, we've accomplished quite a significant amount.

You may want to look at it as phased when you're starting something from scratch. As Annie said, two years ago there was nothing. We're very happy we got phase one. We have all that hard work done. We're quite—

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

I take your point, but zero investments in 2020. Are you going to meet the target for 2020?

[The Chair, Liberal, Wayne Easter]

Okay. We are going to have to move on. I think—

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

I asked a specific question. I wasn't getting an answer. It is a simple question. Is the target going to be met?

[The Chair, Liberal, Wayne Easter]

Do you want to take a stab at that question, Mr. Casola? Then we'll have to move on.

[John Casola]

Annie, did you want to take a stab at that one?

[Annie Ropar]

Yes. I wanted to mention this because it's an important point, absolutely.

On an annual basis, as a result of our corporate planning process, we have to frame some level of targeted investment commitment obviously, so the government can plan for resources, etc., around funding. As we mentioned earlier in the statements, these projects can take various levels of time, depending on the amount of due diligence required, etc. We absolutely have targets that we try to meet. We absolutely try to push them along as much as we can, but we have to be mindful. We have to apply rigorous due diligence to make sure that the first dollar out the door is a smart dollar.

[The Chair, Liberal, Wayne Easter]

Thank you, and we'll leave it there.

We'll go to Ms. O'Connell, Ms. May and Ms. Dzerowicz.

Jennifer.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thanks, Chair.

Thanks to the witnesses.

I won't have a lot of time for questions, but I want to talk about broadband.

Ms. Ropar, you said at the beginning of your presentation that one of the roles you have is advising government at all levels on investment opportunities. I tried to write your exact words, so correct me if that's incorrect.

Then, Mr. Casola, you also spoke in lines of questioning, I think from Mr. Poilievre, about the importance of the investments, and you said that maybe the private sector wouldn't be there. For me and my community, broadband is a perfect example.

We are right next to Toronto, so investing in the infrastructure for broadband in our community is not worth it to the private sector right now, because they have a customer base in Toronto that is growing and huge, and going 20 minutes away or any bit further north—and I'm talking even in urban Pickering, let alone the rural parts of my riding—it's not an economic investment worth making for those telecom companies. However, there would be an economic benefit to our country if more people had access to broadband.

How or what are you doing to work with, for example, municipal levels of government that desperately want to get into the broadband delivery to provide this resource? Then, can you maybe speak to what we can expect, because this is the number one issue in my riding, and how will the Infrastructure Bank be able to help tackle this enormous need in our community?

[John Casola]

I mean no disagreement with anything you said, of course. The importance is there, the need is there, and we are in active discussions, daily discussions, with ISPs looking at different models for delivering broadband. We are happy to engage with any municipalities that have that concern and would like to be more involved.

I think that, at the end of the day, our models and the things we are considering are really focused on the government's commitment to connect every Canadian to 50/10 high-speed Internet—50 megabytes per second download and 10 upload, the CRTC-mandated definition—by 2030 and sooner than that. That includes people in ridings like yours who are close enough that it's really frustrating, but not close enough that they're going to make the investment.

You know, the circumstances you describe are absolutely on the radar screen. They're absolutely being discussed. We're not there yet in terms of models, but I can tell you they are actively discussed on a daily basis, and we're moving forward very quickly on trying to solve that.

[The Chair, Liberal, Wayne Easter]

Thank you.

You have about four minutes each, Ms. May and Ms. Dzerowicz.

Elizabeth.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you very much, Mr. Chair.

Thank you to the witnesses.

This is a brief response to something that Mr. Poilievre put before us, which was the claim that LNG Canada didn't have any government subsidies.

I'll just correct you, Pierre. There's $5.3 billion in subsidies from the Government of British Columbia, plus $275 million in direct subsidies from the Government of Canada, plus a $1-billion tariff waiver issued by Bill Morneau so the company doesn't have to buy Canadian steel and aluminum.

By the way, of the advertised 10,000 jobs in building that facility, 5,500 of them will be in China at a construction facility at Zhuhai, which is in Guangdong province. The construction is being done by a consortium of a Texas-based company, Fluor, and a Japan-based company called JGC, and they've managed to move the fabrication out of Canada and into China. I know how much you like funding projects in the People's Republic of China, so I just thought I'd make sure you had that.

Turning to our witnesses from the infrastructure development bank, I'm very interested in knowing more about how you're structuring projects in infrastructure in interties. I understand that you can't fund the publicly funded grid, such as Manitoba Hydro, but you can support the development of interties, which are much needed to ensure we have an effective national grid. Are other projects with interties in the works? Is it part of a larger concept?

I'd really love to hear from whoever feels equipped to speak to that.

[John Casola]

Yes, we are actively engaged on a number of intertie projects. It's just fundamentally that we want to move clean power from provinces that have it into provinces that don't have it and are still using power that is not quite as clean. There are several east-west types of initiatives that we're engaged in right now. We have seen all sorts of things come across our desks—north-south, east-west—and we're actively engaged in those projects. Those are full of potential and many of them are making great strides.

They're a little more complicated because, as you might imagine, you start to get two or more provinces having to co-operate when they put their needs on the table and so on. It's just complicated. It's expected, but it's complicated, so we'll take a bit more time, but we're actively engaged with a number of provinces over a number of those projects, so yes.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

On the one you've structured so far, as was mentioned, Manitoba Hydro, of course, is the source of power, and it's running north. How much private capital is in that? I ask specifically because I was approached by some investors—I think more than a year and a half ago now—who were based in Montreal and were looking at getting interties in order to deliver to the territories. I'm wondering if it's the same project.

[John Casola]

The actual structure isn't done yet. There's a lot of work to be done, so we're working on that. They have publicly announced a partnership that they're working with. The teachers' pension fund of Ontario is actively involved in looking at that project as well. We're working collaboratively with them and with the first nations, Inuit and Métis groups up there to structure something that makes sense, but it's at too early a stage to tell at the moment.

[The Chair, Liberal, Wayne Easter]

You can have a fairly quick one, Elizabeth.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

That's okay. Those were my main questions.

I'm really encouraged by where you're putting the money in this bank.

Thank you.