Transport Committee on May 16th, 2017

Evidence of meeting #59 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.

A recording is available from Parliament.

On the agenda

Subject-matter of clauses 403 to 406 (Division 18 of Part 4) of Bill C-44

MPs speaking

Also speaking

Sergio Marchi President and Chief Executive Officer, Canadian Electricity Association

Azfar Ali Khan Director, Performance, Institute of Fiscal Studies and Democracy

Sarah Ryan Senior Research Officer, Canadian Union of Public Employees

Glenn Campbell Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada

1:10 p.m.

Conservative

Alain Rayes Conservative Richmond—Arthabaska, QC

KPMG submitted a report. This morning, CBC and Radio-Canada reported that the treasurer of the Liberal Party of Canada was a former KPMG executive.

Is that information true?

1:10 p.m.

Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada

Glenn Campbell

That's beyond my remit. I'm not sure that's relevant.

1:10 p.m.

Liberal

The Chair Liberal Judy Sgro

I'm not sure that there's relevancy there, but it's your time.

1:10 p.m.

Conservative

Dianne Lynn Watts Conservative South Surrey—White Rock, BC

In terms of the return on the investment—and this is from JP Morgan—they've laid out what the expectation would be. This is atypical in the market. When we look at merchant power generation, the average expected return is 14% to 20%. For telecommunications, it's 12% to 18%. For freight and rail, it's 12% to 16%. It ranges from a 5% to a 20% return.

When you're looking at projects, how are you going to identify the rate of return and how that's going to be derived? If there's a shortfall who picks that up?

1:10 p.m.

Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada

Glenn Campbell

Generally speaking, not having reference to those numbers but I understand those numbers, they would be for an archetypal commercial transaction fully financed by the private sector. Therefore, they would be absorbing all the risk, and that would be the commercial-like returns expected for that project.

That would clearly be too high a return for a public project, or a project that is looked at by the Canada infrastructure bank. The objective of the bank would be to introduce itself to mitigate the risk such that those returns are not justified. They wouldn't be justified on a commercial basis.

1:10 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mr. Campbell. We have now run out of time.

Thank you to our witnesses.

Thank you to the committee. I hope it was informative.

The meeting is adjourned.