Transport Committee on Feb. 23rd, 2021

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

The growth plan of the Canada Infrastructure Bank has specified broadband, some $2 billion. I'm on the industry, science and technology committee and we've just concluded a study on the accessibility and affordability of broadband across Canada. I think one thing that is so striking is that there are so many players involved in ensuring that the whole of Canada is connected and particularly complex issues related to broadband in the north and rural areas. Do you think that the Canada Infrastructure Bank can play a significant role in bringing the parties together in order to ensure that projects get delivered?

[Derron Bain]

I would say, first, I am not an expert in broadband and it's not been a sector or project focus of Concert to date. Really, I think you would have to look to somebody with a little bit more experience in that sector to respond to that question.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Perhaps I'll ask Mr. Penner if he has any insight into the delivery of broadband.

[Dylan Penner]

I'm not an expert on broadband either, but it gets back to the general point of publicly built and operated projects being more cost-effective and better for communities.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

It looks like our study is going to be very valuable, the one that we're doing at industry, science and technology. There is, at the Canada Infrastructure Bank, something called the project acceleration sector.

I'm wondering, Mr. Bain, if you have had a chance to study that. It seems to be an area where there is an intention to bring parties together. Does that sound like a reasonably good idea?

[Derron Bain]

Absolutely. I think the simple answer is yes, it's a good idea. It's about developing and advancing projects at an early stage such that at some point they're actually viable and can be implemented or become shovel-ready, and I think at this stage, there's probably a couple that fall into that category. You have the New Westminster Rail Bridge in B.C., and I would suggest probably VIA Rail, although it was committed before the project acceleration commitment, it kind of falls into that bucket as well. So it's really about early development of potential infrastructure projects that will have a significant impact on the communities that are involved.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Bain, and thank you, Ms. Jaczek.

We're now going to move on to our third round, starting off with the Conservatives for five minutes.

Mr. Scheer, you have the floor.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Thank you very much, Mr. Chair.

Again, I just wanted to go back to Mr. Bain.

You spoke about the GO Transit project. Would be a fair description.... I don't want to lead the witness, here, but the way you described it, it almost sounds like this was a backfilling project, a project that was already going ahead, that already was likely going to fit under current funding models, and then the announcement was made. Would you agree that it was almost replacing other streams of federal financing? And from your assessment, do you think that displaced potential private sector involvement in that project?

[Derron Bain]

Based upon the details that I've seen and the timing commitments [Technical difficulty—Editor], that's the conclusion I come to. There may be further details that suggest otherwise. From my perspective, and others I know in the industry, that's certainly a perspective.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

I know Mr. Rogers made an accusation about the Conservative plan.

I think it's important to highlight that under existing Liberal programs a significant percentage of project funding is being lapsed. They're very good at making the announcements and not so good at following through on them.

I think the CIB is a perfect example of that. This wasn't just a pilot project that was developed. This wasn't just a trial run where they were going to see if they could incubate something and grow it up. This was a marquee announcement. This was the result of very high-level meetings. When you go back and read the media reports about the inception of this bank, you see this was the cream of the cream. These are all the people who get invited to the World Economic Forum. These are people whose cufflinks cost more than my car, probably. They all got together and convinced the Prime Minister that this was going to unleash an avalanche of private sector money into projects.

I understand from your perspective there have been a couple of different resets. They've shuffled the deck a couple of times with different personnel. They have rejigged their mandate and done almost a complete overhaul. I understand where you might want to say, well, perhaps this will bear fruit.

Given that this wasn't just a trial run, this was supposed to be set up to accomplish a very measurable.... You used the term “two-times” investment, that the threshold for success.... They said they were going to double the private sector investment in relation to public money. They haven't done that. I understand where you might want to reserve judgment until this current plan....

Would you say it's fair to say that up until this point it has completely failed in its objectives?

[Derron Bain]

I wouldn't necessarily conclude that it has failed in its objectives. Is it delayed in its objectives? I think that's probably fair.

As they lay out...for themselves in their corporate plan, there are very objective measures in terms of performance. I think it's important that government and Canadians hold the organization to account for its performance against those objectives.

As I've also suggested, I think there is a gestation period for major infrastructure projects. You just don't flip the switch on and suddenly the shovels are in the ground. These take time to plan, lay out and procure.

There is a reasonable period of time that one might assume that would take. If you look at other procurement agencies around the country, you see it certainly didn't take Partnerships B.C. or Infrastructure Ontario three years to advance major infrastructure projects to shovel-ready.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Just to be very clear so I understand, are you saying it took less time or more time?

[Derron Bain]

Sorry, it took less time.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

It took less time. Okay, that's fair enough.

You are right. Nobody expects that announcements are made and then within a week or two something is up and operational.

I can certainly point to the P3 model that I'm most familiar with, and that is for the overpasses built as part of the Regina bypass in my home riding. I have the information here. The RFP, the request for proposals, was August 2014. The contract was signed in July 2015. The first phase was completed in 2017, two years from the contract being signed. The full project was completed in 2019. We're looking at a four-year timeline from contract being signed to being completed.

We're coming up on the four-year mark here, and there's no evidence that we're going to hit any of those project completions in the short term.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Scheer.

Thank you, Mr. Bain.

We're now going to move on to Mr. El-Khoury for the Liberals. You have five minutes. The floor is yours.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Thank you, Mr. Chair.

I welcome our guests.

My first question is for Mr. Penner.

The Canada Infrastructure Bank is currently working with the Government of Quebec to expand major infrastructure projects, such as the REM, in Montreal, which will create good jobs and contribute to reducing greenhouse gas emissions.

How can the Canada Infrastructure Bank and Quebec collaborate to help combat global warming?

[Dylan Penner]

For those of us who are concerned about the climate crisis, and acting urgently on it, the model the CIB is engaging in is contradictory to those aims, because of the increased costs. There is also the likelihood that it will create fewer jobs, because of the length of the projects. I'll leave it at that for now.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

My second question is for Mr. Bain.

How can Canada attract more investments to launch more infrastructure projects during this period of economic recovery?

Do you feel it is now time to make budget cuts like the ones we have previously seen, totalling more than $19 billion?

Could I get your opinion on this?

[Derron Bain]

As I've laid out, investment in infrastructure is critical to a strong performing economy and economic growth, whether it's the jobs it creates or the efficiency and productivity that result from that infrastructure. It's absolutely important, at this stage, to continue forward with those commitments.

With respect to the question around attracting capital for investment, the point I've been trying to make is that there is plentiful Canadian capital ready and available to invest in Canadian infrastructure. Whether that's capital that Concert brings, through our 10 B.C.-based union and management pension plans, whether it's competitors, or whether it's other Canadian pension plans, there is capital within the country to invest in our infrastructure. It's proven and efficient capital.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Mr. Bain, it is clear that Canada has an infrastructure deficit.

Can you tell us how we could start addressing that critical deficit?

What kind of infrastructure should be prioritized in terms of investment right now?

[Derron Bain]

We've touched on these issues in previous questions, but my best suggestion around increasing infrastructure investment is to mandate the CIB to have a responsibility and leadership over the federal government's own infrastructure and capital projects or commitments it's making within its own domain. To me, that's an immediate opportunity to advance and improve infrastructure delivery at the federal level.

There was a second part to the question in terms of priorities. We could debate the priorities. Whether it's first nations, green energy, or trade and transportation, they all contribute to a more productive economy and job growth.

It becomes a matter of values and preference more than anything. Given the infrastructure deficit we face in Canada, we have needs across all of those sectors.

[The Chair, Liberal, Vance Badawey]

Thank you.

We're now going to move on to the third round of questioning.

Mr. Barsalou-Duval, you have two and half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

My question will be for Mr. Penner.

When I went over the Canada Infrastructure Bank's annual report, I was surprised to see there was no information on the salaries of executives or on the bonuses paid out. After all, public money is invested in the Canada Infrastructure Bank. In addition, the departure of the Infrastructure Bank's former CEO made headlines when we learned he had received a bonus, the amount of which the bank refused to disclose, while he was earning an annual salary of about $600,000.

Do you think this constitutes a lack of transparency by the Canada Infrastructure Bank? For comparison's sake, if I read the annual report of any other of Canada's major banks, which are private companies, I can see all that information.

[Dylan Penner]

I haven't read that report myself, but that does sound troubling. It just also sounds emblematic of the kind of lesser transparency we see when we go down the road of privatization and P3s, and that's one of the fundamental reasons to oppose them.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Penner.

I have another question for you. References are being made to the fact that businesses interested in investing in infrastructure projects are seeking returns of 7% to 8%, which are high returns for a portfolio, you will agree.

Yet the government, when it seeks investments, obtains returns that are often lower, but the borrowing rate is much lower than this.

How can the supposed effectiveness of the private sector compensate for the difference in return, while the government often borrows at rates of 1%, 2%, 3%? There is a large gap between the two. How can we find a way to benefit?