Government Operations Committee on Feb. 6th, 2023

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

Do you believe you are uniquely qualified because of your relationship with the provinces to have this position you hold?

[Ehren Cory]

I'd like to think that I bring something to the organization, yes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, sir.

[Ehren Cory]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Jowhari.

Next is Mrs. Vignola for six minutes, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Thank you for being with us, Mr. Cory.

I'm trying to clear up who created the Canada Infrastructure Bank and how it works.

The Advisory Council on Economic Growth, which included people from McKinsey and BlackRock, an infrastructure and real estate investment firm, recommended that the Canada Infrastructure Bank be created. The government itself recognized that the companies associated with the recommendation to create the Canada Infrastructure Bank could benefit financially from government decisions based on that recommendation.

You have confirmed that you used to work at McKinsey, as did two other colleagues of yours. In other words, the people who helped create the Canada Infrastructure Bank are also the people running it through the back door, and the businesses they currently own or previously owned can receive government contracts and investments.

On the surface at least, the situation can be summed up as follows: Some corporations are using privileged information they have or receive from the government to gain benefits that are highly profitable to them. Isn't that a problem?

[Ehren Cory]

Thank you for the question.

I would just reiterate, perhaps, the timeline.

I left McKinsey more than a decade ago and have since worked in public service. I was hired in this job through a competitive search. I was contacted by an executive search firm, by a headhunter who was searching for a new CEO for the CIB. They contacted me because of my background and expertise, primarily at Infrastructure Ontario.

The other thing I would say is that the fact of the matter is that since I've become the CEO, we haven't hired McKinsey for one dollar of work.

You mentioned BlackRock. BlackRock does not happen to be an investor in any of the projects we're working on either.

We are trying to get more infrastructure built in this country by bringing together the best of the public and private sectors. That's what I came to the job to do.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

Last week, Mr. Barton told this committee that the Advisory Council on Economic Growth was solely focused on productivity and the economy, and not on social matters.

If infrastructure funded or recommended by the Canada Infrastructure Bank has negative social or environmental impacts, will you turn a blind eye to those impacts or refuse to let investments be made in those infrastructure projects?

[Ehren Cory]

It's an excellent question. Thank you.

At the CIB, given that we're a Crown corporation, the critical thing to think about is that we take the policy of the government of the day. The priority sectors for investment come from government. For each of these things, such as clean power, green energy, broadband to homes, transit and transportation, and trade, we set clear outcome goals, such as tonnes of GHG emissions reduced or the number of new transit riders. Those are the public policy goals. Our job is to invest the money to make those happen.

To be clear, we have a goal around building green infrastructure and reducing the carbon intensity of our economy. If a project came that was counter to that, yes, we would not invest in it. You are correct.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

Moments ago, you said that the Canada Infrastructure Bank operates under a public-private partnership model.

Am I to understand that the government, in other words the public sector advances the funds and the profits go to the private sector?

[Ehren Cory]

Actually, in our projects we're always working with some blend of public and private involvement. Sometimes it's a municipality. We've lent money to the City of Calgary or to the City of Brampton to buy new electric buses. That's us working directly with a municipality to share in the upfront cost of buying new electric buses and sharing in the risk that those buses will perform over the next decade in the way that we all expect them to.

Other times, we're investing in a district energy company that is building out their district energy system. They're a private company, but they're providing a public good—which is shared district energy, which takes buildings off of gas—and then we'd lend money to them. In those cases, we would always have a gain-sharing mechanism so that we get a higher return if the business does well. We're not only guaranteeing profits; it's a loan or an equity investment. These are true investments by us. That includes making sure that if the project is with the private sector and it does well, then we share in that.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

It's reassuring to know that the profits are shared, because in the past we've had projects where that wasn't the case: We took all the risk and the private sector kept all the profits.

Thank you for considering that.

The ultimate goal—

[The Chair, Conservative, Kelly McCauley]

I'm afraid we have to end on that.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I will come back to this later.

Thank you.

[The Chair, Conservative, Kelly McCauley]

That is your time.

Mr. Johns is looking at you to start his six minutes.

[Voices]

Oh, oh!

[The Chair, Conservative, Kelly McCauley]

Mr. Johns, go ahead.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Chair, I tabled a motion the other day and I'm hoping we can have a chat about that and make a decision to expand this study to include Deloitte, PricewaterhouseCoopers, Accenture, KPMG, and Ernst & Young.

I don't think I need to read the motion again, do I? I'm hoping that we can either make a decision or have a conversation.

Maybe you'd like to hear from other members of the committee and see where they're at.

[The Chair, Conservative, Kelly McCauley]

I'm not sure—

[Gord Johns, NDP, Courtenay—Alberni, BC]

Of course, I'm hoping that the committee will support the motion.

[The Chair, Conservative, Kelly McCauley]

I'm not sure if we have a will to do that, because we're right into this one. Perhaps we'll let this one....

Go ahead, Mr. Barrett.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thank you, Chair.

Thank you, Mr. Johns. It's a last name only this time, not first name and last name.

[Gord Johns, NDP, Courtenay—Alberni, BC]

You get used to it.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

In terms of the merit of looking at why these consulting companies are receiving these massive sums of money instead of the work being done in house by our public service, certainly we share the belief that closer examination is required, and not at some time into the distant future. I would suggest that perhaps it could be immediately following the conclusion of our look at McKinsey.

On the rationale as to why not to blend them, I touched on those points in my questions to the minister today. It speaks to a question of values. You also went on further to talk about some of the conduct of some of those other contractors and whether they're appropriate vendors as well.

I think that study is one worth doing, but I would like to conclude the work that we're undertaking on McKinsey right now.

I'm not sure if you'd be amenable to that, but that's—

[Gord Johns, NDP, Courtenay—Alberni, BC]

Absolutely, so maybe through....

I shouldn't interrupt you. I'm sorry about that.