Indigenous and Northern Affairs Committee on Nov. 19th, 2018

[Pierre Lavallée]

In the investment business, which I've been in for a long time, it's generally accepted that disclosing and discussing publicly the investments that you're looking at making is not advantageous to any investor, or I would add in this case to the project itself. It creates a whole different dynamic that is frankly just not helpful to anyone, and if anything would slow us down.

I know your goal is to get more done more quickly, which is also part of our goal. That being said, we also want to do it well. We want to make good investments as stewards of a very large amount of capital that is public capital.

[Matt Jeneroux]

Can you give us a ballpark figure and potential dates for when we could expect one of these 10 to be announced? I say this because I meet with a number of stakeholders every day, who quite frankly are confused as to whether or not a project fits within the Canada Infrastructure Bank portfolio.

There are the three pillars that you're essentially responsible for, with $15 billion from those. I don't know what to tell them, and they're quite frankly looking for something to be announced. I'm sure the minister in a very political way was hoping that the REM project would stop all of this; however, it hasn't. If anything, it has just confused the process even more. I'll put a potential scenario to you, and tell me if you've heard this or not.

I'm from Alberta, a province that depends on the energy sector significantly, on oil and gas pipelines. The government has recently purchased the Trans Mountain pipeline, and as good stewards of public money, it seems to fit in some sort of mandate of the Canada Infrastructure Bank to look at funding the Trans Mountain pipeline. Would you agree?

[Pierre Lavallée]

I would, Madam Chair, go back to the top of your question or some of your comments that people are not clear about what the bank's mandate is, and I understand that. We've had over 120 different meetings in less than six months with people, and this the first question: “We've read the material, we've read the announcement, but what does it really mean?” I understand the question. I would say that announcing our first investment has sent a signal to the market. When we said we would be flexible, we would do either equity or debt of various forms, I think that message has been anchored by the one announcement. One announcement on one investment when our scope of activity is going to be relatively broad runs the risk of limiting peoples' imaginations to whether they need a project that needs a 15-year term loan, and the answer to that is no.

I would make a suggestion for those people who are asking you that question about what is possible with the bank: Don't wait for more announcements to come out. Call us now if you have a good idea and you think that the CIB can help you bring it to life, and we'll engage in a discussion that will be specific to the project.

[Matt Jeneroux]

Is the Trans Mountain pipeline a good idea?

[Pierre Lavallée]

The Trans Mountain is already an asset that the government has purchased that we're not involved with.

[Matt Jeneroux]

In terms of leveraging private capital into the Trans Mountain, have you been approached with regard to the Trans Mountain pipeline?

[Pierre Lavallée]

We have not....

[Matt Jeneroux]

It seems to fit your mandate, I would just assume.

[Pierre Lavallée]

Actually, our mandate is to invest where private capital is insufficient to bring a project to life. In that case, it was not a lack of capital that led the government to purchase the asset. It was a different set of circumstances.

[Matt Jeneroux]

I think the government often says the—

[The Chair, Liberal, MaryAnn Mihychuk]

I'm afraid that we've run out of time. On this round, we only have five minutes.

We're going to wrap up with MP Amos.

[William Amos, Liberal, Pontiac, QC]

Thank you to our witnesses.

I appreciate that this is a challenging conversation across Canada, because the needs in the north are just so great. Private capital is willing, but sometimes the willingness has limits.

What's the basis upon which an initiative that is proposed for infrastructure in the north...? What is the core set of criteria that will be applied that may be different for the north than for, say, a public transit project in the south? From the perspective of the Canada Infrastructure Bank, is there not a different way of looking at northern infrastructure?

This is directed to you, Mr. Lavallée.

[Pierre Lavallée]

I think it's fair to say that we look at every potential project on its own merits and in its own circumstance. Arguably, the urban transit circumstances in Vancouver, Toronto, and Montreal are very different from one another. A project on a road in British Columbia in the south versus the north or the territories would be different. The economic environment around it would be different. We need to factor in all of these elements as we look at the viability of a project and its ability to attract private investors.

In short, we have to look at the specific circumstance of every project, including, therefore, projects in the north and in remote communities.

[William Amos, Liberal, Pontiac, QC]

I understand the case-by-case aspect, but what I'm not hearing, though, is that there is a specific set of criteria applied to northern projects. It's really.... Every project is evaluated on its merits. What's not clear to me is what the evaluation criteria are.

[Pierre Lavallée]

At a high level, the project has to fit within our mandate. It has to be within our priority sector; it has to be in the public interest.

To be in the public interest, it has to fit the priorities of the various levels of government where the project will take place. In that sense, those lenses—the northern, territorial, and indigenous communities lenses—would be put against the evaluation of the project.

In that sense, it actually is quite specific to the situation.

[William Amos, Liberal, Pontiac, QC]

Madam Chair, for the remainder of my time, I'd like to give our colleague Mr. Tootoo an opportunity to ask any questions he may have.

[The Chair, Liberal, MaryAnn Mihychuk]

Welcome, Hunter. Go ahead.

[Hunter Tootoo, Independent, Nunavut, NU]

Thank you, Mr. Amos and Madam Chair.

Welcome to both of you. It's good to see you again.

In your comments, Mr. Lavallée, you said that “the bank should take into account the specific challenges of developing infrastructure” and that “the bank should also consider how it can contribute to the government's commitment to achieve reconciliation”.

What specifically are you looking at in those areas to take that into account? It just says “should”; it doesn't say “shall”.

[Pierre Lavallée]

That may be my fault.

[Hunter Tootoo, Independent, Nunavut, NU]

No, that's a quote from the minister.

[Pierre Lavallée]

Remember where I come from. The “should” and the “shall” may be just the translation from French.

More seriously, the process that we go through is one that starts by listening to the local authorities with regard to what the priorities are and where we should focus our attention and energies. If we do that well, I think that we'll achieve what you're looking for.

[Hunter Tootoo, Independent, Nunavut, NU]

Thank you.

Mr. Campbell, you said you were recently up in my hometown of Rankin Inlet. The folks from Agnico Eagle were here presenting before the committee, along with—at a different time—the Kivalliq Inuit Association. One of the projects that they're looking at moving forward is the Manitoba-Kivalliq hydro and fibre project. One of the challenges was being able to attract some private sector investment. They've indicated that they have that. I'm just wondering if that's something that's moving along through either of your processes to be considered.

[Glenn Campbell]

Without commenting specifically on any one project, I can say we are familiar with projects that are coming through various pipelines. I think the comment we will make is that the earlier project proponents come forward, whether they are with the government or with the private sector and they are using the bank, potentially, or even government, in an advisory capacity...I think what's often overlooked is that many of these projects take a long time to develop. Those that involve the private sector in revenue are more complex and take longer, and there's value in a feasibility study to structure them in the right way.

When the local communities come forward with some of those projects—whether they're coming to the department or going to the Infrastructure Bank—we'd like them to surface and come forward. Then we'll figure out the best tool and really scrutinize those projects and see if they can be pulled forward or get off the ground.

It's dialogue and process that we really need to encourage. I'm glad to see that's playing out fruitfully in Nunavut.

[The Chair, Liberal, MaryAnn Mihychuk]

That runs out our time.

Thank you very much for coming out and taking the afternoon to spend this time with us. We appreciate it. Merci. Meegwetch. We'll take a short break and then reconvene for our second panel.

[The Chair, Liberal, MaryAnn Mihychuk]

Welcome.

Engineers Canada and the Yukon Chamber of Commerce are with us. We have them on video conference.

I'd like to remind MPs to please direct your questions to specific persons, whether it's to the video conference or to those here in person.

I'd also like to offer a special recognition to Engineers Canada as a former member of the family. It's good to see you. Engineers and geoscientists are all paired up now. I just wanted to disclose that we had some relationship.

We've wasted enough time. I know that our MPs are anxious to ask you questions. We have an enormous task in front of us in looking at northern and Arctic infrastructure. It's not as though we can ever forget Yukon. We're very happy that you're here.

We're going to start with Engineers Canada. You have up to 10 minutes. If you take less, you'll have more time with the MPs.

You can start whenever you're ready.