Evidence of meeting #39 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A recording is available from Parliament.
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
I can provide that number.
We did actually disclose that in the notes to our last quarterly statements.
Effectively, just for context, what we do is a market-to-market analysis where we look at what the return required would be based on the risk of the project, etc. in the private sector. We then discount that back against the effective interest rate that we're actually charging on that loan over the course of the 15-year term, and that number is $495 million.
Conservative
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
No, it's basically a comparison of the value of what would be required on the same basis with that same piece of paper for the private sector, and that is discounted against our interest rate.
Conservative
Pierre Poilievre Conservative Carleton, ON
If you could share with us the value, in net present dollars, of the subsidy you're providing that project, I would really appreciate it.
Mr. Casola said the private sector doesn't fund these kinds of large-scale infrastructure projects until they're actually built and running [Technical difficulty--Editor].
Liberal
The Chair Liberal Wayne Easter
Mr. Poilievre, you're breaking up a little.
We'll get you to start that question again, and we'll give you back your time.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you.
Mr. Casola said that the private sector does not fund these projects.
In fact, that is not true. The private sector does fund these projects upfront without government money all the time, all around the world, whether it's pipelines, gas plants, mines or other natural resource projects. They are regularly funded without government guarantees, even in the tens of billions of dollars, as is the case with LNG Canada, a $40-billion project, all privately financed.
It is not true that we can't build anything in this country without having government guarantees or subsidies in order to do it.
I want to move on to a different question, which is on the bonus received by the outgoing CEO of the Canada Infrastructure Bank. Can somebody please tell us how much that bonus was?
Liberal
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
I'll repeat my previous answer, which was that we do disclose total compensation by category for the entire executive team in our notes to our financial statements in our annual report, but I'm unable to comment on any individual person's compensation.
Conservative
Pierre Poilievre Conservative Carleton, ON
That's unacceptable.
I can tell you that every member of this committee has their compensation disclosed. The chairman has a compensation, and all of us as MPs have a different compensation. Everybody knows what we're paid.
Why do you think that you and your other executives should be able to keep your compensation, which is funded by taxpayers, secret from those same taxpayers?
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
We're actually following the exact same guidelines that other Crown corporations follow. I would welcome the opportunity.... I think you should take a look at the statements produced by some of our other financial Crowns, and you'll find the exact same method of disclosure.
Conservative
Pierre Poilievre Conservative Carleton, ON
You don't think that taxpayers are entitled to know what a failed executive was paid on the way out the door?
Liberal
The Chair Liberal Wayne Easter
I'm going to interrupt here because I really think that's a question that may be more appropriate for the Minister of Finance. I don't want to put Ms. Ropar on the spot, but she can go and answer how she sees fit. It's not the Canada Infrastructure Bank's decision. It was somebody else's up the line. If we want to challenge that, we can; I'm not in disagreement with that.
Ms. Ropar.
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
I do want to say that we do disclose total compensation, again, for key executives and the board of directors. That is fully transparent and disclosed in our financial statements.
Conservative
Pierre Poilievre Conservative Carleton, ON
But the outgoing CEO's compensation on his way out the door, that will not be made public?
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
That is effectively embedded in the key-management personnel disclosure.
Conservative
Pierre Poilievre Conservative Carleton, ON
It's embedded, but we can't actually find out the number for that individual on his departure, correct?
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
Correct.
Conservative
Pierre Poilievre Conservative Carleton, ON
That is really unfortunate. It's a serious lack of transparency.
Has the bank completed any projects since it was founded in 2017?
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
I think, as John enumerated, just the long lead time to get projects done.... Obviously, the REM project is currently under construction, and I believe—John, correct me if I'm wrong—it has a six year construction period, which is ongoing. If the member is specifically referring to completed, ribbon-cut, then no.
Liberal
The Chair Liberal Wayne Easter
Okay, we have to move on to Mr. Sorbara.
Coming out of this round of questioning, I hope somebody at some point can.... There's a dispute over what is a subsidy and what isn't. If somebody can answer that, it would be great.
Going down the line....
Mr. Sorbara.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Mr. Chairman.
Thank you to the members of the Canada Infrastructure Bank for coming today and being here virtually.
First of all, I think the expansion of GO Transit here in Ontario is of paramount importance for our commuters. We're under different times, virtual times, so the volumes are being impacted due to COVID-19, but when we do get back to more of a normal pace, volumes will go up. There's a $2-billion commitment from the Canada Infrastructure Bank, which is very welcome, to ensure we get a further build-out of GO transit times, so I want to say thank you to the executive team there.
Moving back to the mandate of the CIB, Canada Infrastructure Bank, when I think about the CIB versus the Canada pension plan, PSP, OMERS, the teachers, HOOPP or any of the other major pension plans, institutional investors, out there.... First of all, do you have a set hurdle rate when you're looking at projects? Second, are most of your projects on the greenfield side or the brownfield side? It seems to be more so on the brownfield side. Would you care to comment on that?
Chief Financial Officer and Chief Administrative Officer, Canada Infrastructure Bank
John, do you want to take that one?
Chief Investment Officer, Canada Infrastructure Bank
Sure.
In terms of a hurdle rate, or a return rate, we don't have one. Unlike those institutions, those comparator ones that you noted—those were created to generate returns for their plan members, of course; they need a return to be able to meet their obligations going forward—our imperative, our mandate at its core, is to build new value-added and important infrastructure for Canadians. As we discussed earlier, oftentimes we can do that by taking equity. We can do that by providing market-based loans. We can do that by providing subsidized loans on a subsidized-interest-rate basis because that's the only way they make economic sense.
We measure, really, how much new value-added infrastructure we were able to facilitate and participate in and how much private capital we welcomed into those deals that wouldn't otherwise have been there.