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.
12:25 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Certainly.
As a final question, if I have time, Madam Chair, we've heard a fair bit over the course of this debate about who bears risk. I assume the ordinary commercial protections like taking security would be available to protect against default.
12:25 p.m.
Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada
Yes. I've watched some of that debate. Let me be very clear. We would anticipate the bank to meet the highest standards of robust legal partnership agreements that would contemplate all scenarios under which various parties would perhaps be stressed, run into difficulties, or would be taking collateral. All of this is quite a conventional undertaking that exists in all forms of infrastructure and we would anticipate the bank to meet the highest standard in that regard.
12:25 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you, Madam Chair.
Having so little time to discuss such an important issue speaks for itself.
I will try to save time, then, by introducing a motion in the hope that it will be adopted. It's the motion of which I gave notice Friday. It reads as follows:
That the Committee request the directors of the asset management company Blackrock and the members of the Economic Growth Advisory Council to testify as part of an additional meeting on the study of the Canada Infrastructure Bank.
I won't take up a lot of time explaining a motion that, in my view, speaks for itself. With the support of my fellow members, we could have more time to discuss this important issue.
12:25 p.m.
Liberal
The Chair Liberal Judy Sgro
Mr. Aubin, you have given us notice of motion appropriately.
Is there any discussion on the motion that is before us?
Yes, Mr. Fraser.
12:25 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Madam Chair, do we have an obligation to get something to the finance committee by Friday?
12:25 p.m.
Liberal
The Chair Liberal Judy Sgro
I'm not quite sure if the benefit of this additional meeting would be known.
When you suggest an additional meeting, are you talking about prior to Friday, Mr. Aubin?
12:25 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
I think Thursday is the only day we have left. That said, you've worked miracles in the past, Madam Chair.
12:25 p.m.
Liberal
The Chair Liberal Judy Sgro
We do try to accommodate, without question, but whether you can get the people from BlackRock and so on and so forth....
If the committee supports it, all we can do is—
12:25 p.m.
Liberal
The Chair Liberal Judy Sgro
—attempt to do this. If BlackRock is not available or if members of the economic growth committee are not available, we would not be able to fulfill the motion.
We have a motion before us. Is there any further discussion or comment?
(Motion negatived)
Mr. Aubin, please continue.
12:25 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you.
I'd like to thank our witnesses for being with us this morning.
My first question is for Mr. Ali Khan.
You wrapped up your presentation by asking what was going to be my first question. Are we putting the cart before the horse? You made it clear that we were.
How much time do you think we would need to achieve your first two objectives, that is, a plan assessment and strategic needs analysis? Should the bank be put on hold for a year, two years, or six months?
12:30 p.m.
Director, Performance, Institute of Fiscal Studies and Democracy
Thank you, Chair, for the question.
We can maybe use the U.K. as a very good example. They have started their national infrastructure assessment. I believe the project started in the fall, probably in November of last year. It's in two phases. The first phase is actually to do the strategic needs analysis to 2050, so that report is going to be tabled and they're expecting to table that sometime this summer.
In terms of the second phase, which is the larger infrastructure assessment with the current stock, they're looking to table that next year. It looks like the time frame the U.K. is looking at, given the wide consultations and engagement they want to do, probably seems to be about an 18- to 24-month time frame.
12:30 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you.
My second question is for Mr. Campbell.
It seems to me that, during the campaign, we, Canadians, heard about a bank that would provide low-cost financing for infrastructure projects. To my mind, that meant a public bank. What we have here, however, is a private bank.
Has the department previously explored plans for a public bank?
12:30 p.m.
Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada
The two ministries, infrastructure and finance, have collaborated on extensive consultation and analysis over a considerable period of time, globally and domestically. Many of those involve me contemplating and even engaging, as my colleague said, in the U.K., internationally, looking at various models.
Clearly, with that view in mind, the government decided to move forward with this particular model of an infrastructure bank, which I can point out is very much a plain, vanilla-type crown corporation, consolidated very transparently on the government's books and designed to mature over time, keeping pace with slow-moving infrastructure projects.
12:30 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
No matter how much imagination I use, I can see only three ways for the Minister of Finance to find the $15 billion to $35 billion the government wants to inject into this bank. The first is to raise the already runaway deficit. The second is to transfer money originally earmarked for municipalities to the bank. The third is to sell assets that have already been funded.
Is there another way I am missing? Is there some other way that the government could find the $35 billion for this investment bank?
12:30 p.m.
Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada
There are many perspectives from which to look at the Canada infrastructure bank. I'm not sure I would agree with the characterization that you put forward. The government set out a fiscal framework over 11 years toward many priorities on greening, trade, transportation, and rural and remote communities. Less than 10% of that is attributed to the infrastructure bank, and the government has made some decisions about rebalancing.
The main point is that this amount of money will go to—
12:30 p.m.
Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada
This amount of money—if not more, when we attract private sector financing—will lead to more public infrastructure being built in the various areas you mentioned.
12:30 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you.
Ms. Ryan, do you see some other way to find this funding? Is there another possibility, besides the three I mentioned?
12:30 p.m.
Senior Research Officer, Canadian Union of Public Employees
No. The key thing here is that there was a public alternative, a public bank, that was available to the government, and it appears that this was the original plan in terms of the low-cost financing that was in the mandate letters. At some point, that shifted to higher-cost financing. It is going to cost more over the long run to all Canadians, whether through higher-cost borrowing....
If you created a public bank, the bank itself would be able to borrow at very low interest rates. You would capitalize it initially, and then the bank would be able to borrow at lower costs. I am not clear on why private financing became part of it, except to funnel money through public infrastructure projects into private sector pockets.
12:35 p.m.
Liberal