Evidence of meeting #39 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was municipalities.
A recording is available from Parliament.
Noon
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
Not that I'm aware of, no.
Noon
Conservative
Pierre Poilievre Conservative Carleton, ON
Are there any restrictions on banks from providing loans to such undertakings?
Noon
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
Pardon, can you—?
Noon
Conservative
Pierre Poilievre Conservative Carleton, ON
Is there any restriction that bans banks or bond-holders from lending for projects like that?
Noon
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
No, not necessarily.
Noon
Conservative
Pierre Poilievre Conservative Carleton, ON
Is there anything that bans the federal government under the present situation from cost-sharing projects that also involve private sector investors?
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
What I would say about the bank is—
12:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Is there any restriction on the federal government's investing in projects led by private sector actors?
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
There are some restrictions, yes.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
So, how come those restrictions didn't take effect in the case of the Canada Line in British Columbia, or the Evergreen Line in Coquitlam?
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
In those cases, those were public-private partnership models.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Right, so the restrictions to which you referred did not stop the projects in those cases.
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Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
The asset, though, is owned by the public entity, by the regional entity, or by the municipality itself. It's not owned by the private sector.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
In the case of the 407 in Toronto, for example—privately owned and operated—is there anything under federal law or infrastructure programs that bans that from happening?
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
Is there something that bans a project like that from happening?
12:05 p.m.
Conservative
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
That's a good question. I can't hypothesize on that. I think you'd have to look at a particular project—its terms.
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
The project is done. It's owned by the private sector. So you're asking—
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Conservative
Pierre Poilievre Conservative Carleton, ON
Okay, so it is allowed.
The question then becomes: what does the infrastructure bank do that can't already happen? The only things I can find are loan guarantees and equity. You mentioned equity positions in the budgetary documents that came out. These are the documents that came out around the time that this initiative was announced. They didn't use the word “equity”. They used the term “subordinated equity”. What's the difference between equity and subordinated equity?
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
If you go back to the fall economic statement, it talked about equity, subordinated or not, and loans, subordinated or not.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
My question related to subordinated equity. What is the difference between equity and subordinated equity?
12:05 p.m.
Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
It depends on when you get paid back. If you're going to be taking advantage of the upstream in the revenue from a project, if you're subordinated or very subordinated, that means you're down the list in being able to take advantage of the revenues coming in.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
So if the federal government is the subordinated equity-holder, then it would be the last to get paid profits from a project.
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Assistant Deputy Minister, Policy and Communications, Office of Infrastructure of Canada
Or it would be next to last, depending on the financial structure of the deal. It also depends on the terms and conditions of the deal.