Transport Committee on Nov. 20th, 2018

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting of the Standing Committee on Transport, Infrastructure and Communities on November 20 to order.

We gather this morning to study a number of votes from the supplementary estimates (A), 2018-19, namely votes 1a, 5a and 10a under the Office of Infrastructure Canada and vote 1a under Windsor-Detroit Bridge Authority.

On behalf of the Office of Infrastructure of Canada, I want to welcome Kelly Gillis, deputy minister, infrastructure and communities; Gerard Peets, assistant deputy minister, policy and results; Marc Fortin, assistant deputy minister, program operations; and Glenn Campbell, assistant deputy minister, investment, partnerships and innovation.

On behalf of the Windsor-Detroit Bridge Authority, I want to welcome Bryce Phillips, chief executive officer; Heather Grondin, vice-president, communications and stakeholder relations; Mike St. Amant, chief financial administrative officer; and Kevin Wilkinson, controller.

Welcome, everyone. Thank you for coming.

I'll start the discussion by calling vote 1a under the Office of Infrastructure of Canada.

Ms. Gillis, we'll hear from you for five minutes, please.

[Kelly Gillis, Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada]

Thank you very much for inviting me to speak to you today.

As you outlined, I'm joined by some members of my senior executive team. We've been invited here today to speak to you about Infrastructure Canada's supplementary estimates (A), which were tabled in the House of Commons on October 24, 2018.

I'd like to begin with a brief update on the progress of the investing in Canada plan. The plan is designed to help grow the economy, build inclusive communities and support a low carbon green economy. It was rolled out in two phases.

The first phase, which focused on the repair and rehabilitation of existing public transit, water, waste-water and social housing infrastructure, is well under way across the country.

For the second phase, all 36 programs being implemented by 12 federal departments have been launched. At Infrastructure Canada, all provinces and territories have officially signed their bilateral agreements and projects are already being approved.

To date, more than $18.5 billion in funding has been committed to thousands of projects, through both phases of the investing in Canada plan, and projects are under way in communities across the country.

To support Infrastructure Canada's program delivery, including legacy programs and those under the investing in Canada plan, the department is requesting an increase of $548 million through supplementary estimates (A), which brings the total authorities for 2018-19 to $6.7 billion.

Included in the supplementary estimates (A) request is $292 million in funding for the new Champlain Bridge corridor project. Nearly $235 million of this amount relates to a settlement agreement announced last March between the Government of Canada and the Signature on the Saint Lawrence Group to take additional measures to help mitigate construction delays caused by several factors, such as strikes and transportation of oversized parts to the work site. Fifty-seven million dollars is unspent funding from last year, which is brought forward annually to cover unexpected costs.

The department is requesting $210 million to assume the P3 Canada fund commitments previously held by PPP Canada, and $43 million in funding for the disaster mitigation and adaptation fund.

I would like to conclude by highlighting Infrastructure Canada's ongoing commitment to transparency and openness in the delivery of our investments.

The department is committed to regularly updating Canadians on the results of our investments. We do this in several ways. Our online geomap provides information on all projects that have been announced and have a longitude-latitude component across the federal government under the investing in Canada plan.

By department and by program, our data table shows the funding base, the number of projects approved, the projects started and the funds reimbursed to our project partners to date. The open data portal provides information on the progress of the projects Infrastructure Canada has supported through our programs. We have posted the signed bilateral agreements with a dashboard on the progress being made on approved projects. The Privy Council results website publishes key metrics on the progress being made under the minister's mandate letter. Those tools are updated regularly and provide Canadians with easy access to information about our investments.

In addition, Infrastructure Canada has been working with Statistics Canada to improve our understanding of the state of Canada's infrastructure and its impact on the economy.

As part of this work, Statistics Canada conducted the first-ever core public infrastructure survey for 2016, the results of which are being released over the fall. The survey will be reproduced for 2018 and future years, so that we are able to track the evolution of the stock, condition and performance of publicly owned infrastructure in Canada.

We have also worked closely with Statistics Canada to release the infrastructure economic accounts, which provide detailed information on investments being made in the public and private infrastructure since 2009, including those investments that affect the stock of infrastructure and their contribution to the Canadian economy. This information is easily accessible through Statistics Canada's online infrastructure statistical hub, allowing the public to easily manipulate the infrastructure data.

Looking ahead to 2019, we will release a progress report which will contain further details on the results achieved through our infrastructure investments under the plan.

Thank you for inviting us to speak with you today about the important work Infrastructure Canada is doing on behalf of Canadians.

We would be happy to answer any questions you have.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Gillis.

Mr. Phillips, for five minutes, please.

[Bryce Phillips, Chief Executive Officer, Windsor-Detroit Bridge Authority]

Good morning, and thank you very much, Madam Chair, for welcoming us here today.

The Windsor-Detroit Bridge Authority, or the WDBA, has been here previously at this committee and other committees. It's always a privilege to be here in Ottawa to speak about the Gordie Howe International Bridge project. It is a very exciting time for this project and for the WDBA. Just last month, the Prime Minister joined us in Windsor, and we celebrated the official start of construction. It's one of the largest infrastructure projects ongoing right now in North America.

The construction of the Gordie Howe International Bridge is a project that is very good news for Canada and Canadians. As you know, the Windsor-Detroit gateway sees over 30% of the total of Canada-U.S. trade, and that's all by trucks across the border at Windsor-Detroit. This amounts to over $100 billion a year.

An important benefit of the Gordie Howe International Bridge project is that it'll provide the capacity for the current and future long-term needs of our country. As well, the completed project will provide highway-to-highway connection between Ontario and Michigan. In fact, you can get on the 401 on the eastern border of Ontario and travel all the way to Florida, with one stop only at the border, and that will be a high-tech border crossing at the new international bridge.

Together, these features will work to improve the flow of people and goods between Canada and the U.S. It's arguably the most important trade corridor between Canada and the United States. While the WDBA was created in 2012, we started operations in August 2014. Since then, we've been very busy preparing for this once in a generation undertaking.

Over the past few years, we've worked on two parallel streams: managing the public-private partnership procurement process, which was just completed at the end of September, to select our private sector partner to design and build, finance, operate and maintain this project; and preparing the sites of both the Canadian and U.S. ports of entry, along with the extension from the U.S. port of entry out to the I-75 in Michigan.

Our private sector partner is Bridging North America. It's comprised of some of the most recognized names in international infrastructure construction projects. There are American, Canadian and international partners in that consortium.

The fixed price contract for Bridging North America is valued at $5.7 billion. This includes the design-build phase and the operation, maintenance and rehabilitation phase of the project. Bridging North America was selected, and will be held to a 74-month construction schedule which will see the bridge open by the end of 2024. This contract is actually very good value for Canadians. It's a fixed price contract. The private sector partner assumes risk related to the material cost and any cost increases or cost fluctuations.

A value for money analysis was conducted by an independent firm. That analysis demonstrated that using the P3 model for this project had a savings of about 10%, a little over half a billion dollars compared to other methods of procuring and constructing such a project.

As I mentioned, at the end of September, with the selection of Bridging North America, the procurement process has been completed.

We're now into the construction phase of the Gordie Howe International Bridge. The WDBA is concentrating on two areas: completing the early work on the Canadian and the U.S. sides, and getting ourselves established and ready for the construction phase.

For the supplementary estimates, the WDBA is requesting about $284 million in funding for this project. This funding is aligned with our priorities, and will cover project and construction costs in the preparatory phase on both the U.S. and Canadian sides to be ready to turn over the properties to Bridging North America, so it can do the construction.

The funding is important so that we can maintain all critical path activities and near critical path activities to make sure that we meet that 74-month schedule.

I thank you for your continued interest in the Gordie Howe International Bridge project.

My colleagues and I would be pleased to answer any questions you have.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Jeneroux.

[Matt Jeneroux, Edmonton Riverbend, CPC]

Thank you, Madam Chair.

Thank you, witnesses, for being here today.

I do want to draw your attention to who is not here, Madam Chair. We don't have the minister here. He's ultimately responsible for the supplementary estimates. We do have the Minister of Transport coming. He's coming for an entire 90 minutes, which is good, but it would have been nice to also have the Minister of Infrastructure here as well.

[The Chair, Liberal, Judy Sgro]

On December 6, we're scheduled to have the Minister of Infrastructure here.

[Matt Jeneroux]

He's coming here on his mandate letter, though, Madam Chair. He's not coming on the supplementary estimates. It would have been nice to have him here for those.

The other folks who aren't here are the people from the new Champlain Bridge. It's actually receiving more money than the Gordie Howe bridge. It would have also been nice to have the opportunity to talk to them, but we'll just have to deal with those who are here today.

I would like to start with you, Ms. Gillis.

There's already been $35 billion allotted to the Canada Infrastructure Bank. Just recently, there was a $477-million transfer to the bank from Finance Canada. Since the CIB falls under Infrastructure Canada, I imagine you would have the breakdown of these costs, of what the $477 million is for.

[Kelly Gillis]

Certainly, we can provide you the details of that money. The majority of that money would be for the first investment they are making for the REM project, which was around $1.3 billion. It was announced earlier in the summer, and it was the first investment to help advance this project, which is really important in providing light rail to Montreal.

[Matt Jeneroux]

It was previously announced in June, so I'm curious. If you could provide those details, that would be fantastic. But $477 million is a fair bit of money for a project that was already allotted when the Prime Minister himself announced it in June 2017. The Canada Infrastructure Bank itself is part of the confusion. I think you're seeing a number of people investing in infrastructure who are confused about exactly what it does.

I had the opportunity to talk to the CEO yesterday, and it didn't help clear up much of this confusion. I leave that out there for you and your department, but it's certainly something we've been hearing from many stakeholders. If they don't fit within the three pillars within the Canada Infrastructure Bank, then it's essentially not a project for them.

I also want to talk about the completion of the Champlain Bridge. It's now been delayed a second time. You highlighted some of that in your comments. This time it's been delayed by six months. The mandate letter that the new minister received from the Prime Minister indicated that the previous minister had failed on the delivery of a number of these projects. It encouraged the new minister not to experience the delays that occurred under the previous minister.

However, we're here in the same situation with the Champlain Bridge delays. How much of that is essentially on Infrastructure Canada? You have blamed the strikes. You have blamed oversized equipment. I'm curious to know how much of that is on you guys and whether these penalties will be respected once the bridge comes to fruition.

[Kelly Gillis]

Regarding the Champlain Bridge project, we announced last March the accelerated measures related to the request for the funding in the supplementary estimates, and we provided a full technical briefing of the rationale for those changes.

We have since done further technical briefings, including this past October, to explain the status of the bridge. With Signature on the Saint Lawrence Group, we walked through the technical aspects of the construction related to doing work in Canada in the winter. We also mentioned to all Canadians that the bridge will be structurally complete in December, meaning that you can walk across the bridge but that there is some work such as waterproofing and paving that cannot be done in a winter time frame.

[Matt Jeneroux]

I'm sorry to interrupt you.

[Kelly Gillis]

That is what was explained to Canadians to make sure that the schedule is transparent.

[Matt Jeneroux]

If I may, this bridge was an election promise by the Prime Minister that this Christmas break we'd have people driving over the bridge. I don't think they're necessarily feeling the same comfort that they're able to walk over the bridge.

How much is estimated to be recovered from these penalties?

[Kelly Gillis]

The contract date for the bridge is being negotiated right now. As we've done in the past, just like last March, when that information is known, we will make sure that it's transparent to all Canadians, as we've done in the past.

[Matt Jeneroux]

When it comes to the sentiments of Canadians, particularly Montrealers, they are feeling the pressure regarding this bridge.

Could you perhaps indicate that it might have been a mistake to remove the bridge tolls then, to pay for the maintenance and the building of this bridge?

[The Chair, Liberal, Judy Sgro]

Could you give a very short answer, if that's possible.

Sorry, Mr. Jeneroux.

[Kelly Gillis]

The bridge is proceeding as the government has announced. We will keep Canadians completely posted on the schedule, as it is known.

[The Chair, Liberal, Judy Sgro]

We'll move to Mr. Iacono.

Mr. Iacono, we're having a problem with interpretation. They are trying to fix it.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Then I'll start off in English.

Thank you, Madam Chair.

When it comes to sentiments of a Montrealer, I think I speak best here because I am from Montreal.

When it comes to the Champlain Bridge, I can say that the previous government had 10 years to regulate and fix that problem, but they didn't do anything about it.

[Matt Jeneroux]

On a point of order, Madam Chair, we're speaking about the estimates of the government.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

It's been less than four years—

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

You are still behind.

[Matt Jeneroux]

Do you want to brag about this, Angelo?

[The Chair, Liberal, Judy Sgro]

Let's just keep things going, all right?

Mr. Iacono, the interpretation has now been corrected, by the way. Please feel free to continue as you like.