Evidence of meeting #18 for Transport, Infrastructure and Communities in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A recording is available from Parliament.
4:25 p.m.
Liberal
The Chair Liberal Vance Badawey
Thank you, Mr. Bain; and thank you, Mr. Barsalou-Duval.
We're now going to move on to our next questioner. We have Mr. Bachrach, from the NDP, for two and a half minutes.
Mr. Bachrach, the floor is yours.
4:25 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Chair.
I think the conversation in which we all come together in agreement is about the objective, when we build infrastructure, being to maximize value for the Canadian people.
Value can be measured many ways. Much of this discussion has been about monetary value and trying to get the best bang for the buck, so to speak. Of course, though, there are many other things that we value, some of which are more difficult to put a price on.
I'd like to ask Mr. Penner to talk about the ability of P3s—or the lack of ability of P3 projects—to account for some of those non-monetary social, community and environmental values that are also important, when we look at the overall picture.
4:30 p.m.
Climate and Social Justice Campaigner, Council of Canadians
Well, in my primary area of work around the climate crisis I think about this quite a bit. We've had decades of delay and inaction at the federal level in the face of the climate crisis. It happens in the context of the CIB looking at P3s and privatization, when the P3 and privatization projects that come along with them take so much longer at a time when the urgency of the climate crisis just doesn't allow us to take as long as we feel we want to take. We really need, then, to be talking about the opportunity cost and the opportunities lost by engaging in P3s for infrastructure instead of in public financing as part of the way we tackle the climate crisis.
4:30 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Mr. Penner, why do you think the current federal government is so preoccupied with attracting private capital and pursuing P3 projects as a way of delivering infrastructure?
4:30 p.m.
Climate and Social Justice Campaigner, Council of Canadians
It gets back to what I was talking about earlier concerning the general support for neo-liberal economics. Privatization is part of it, as are deregulation and free trade, and all of these together have led to the climate crisis, the economic inequality we're facing, the inequalities of race and the various intersecting crises we're facing. I think we need to go down a very different road, because we can't solve the problems we're facing with the same approaches that caused the problems we're facing.
4:30 p.m.
Liberal
The Chair Liberal Vance Badawey
Thank you, Mr. Penner, and thank you, Mr. Bachrach.
We're now going to move on to the Conservatives.
Mr. Soroka, you have the floor for five minutes.
4:30 p.m.
Conservative
Gerald Soroka Conservative Yellowhead, AB
Thank you, Mr. Chair.
My first question is to Mr. Bain.
During your presentation you used the expression that the CIB is crowding out opportunity. Could you explain what you meant by that?
4:30 p.m.
Managing Director, Concert Infrastructure
What I'm suggesting is that there are, on the face of it from my perspective, some commitments.... Or maybe more specifically, when you look at appendix I of their corporate plan, where they lay out the models they intend to invest in, they are clearly suggesting that they're going to invest in what we call DBFM, or design-build-finance-maintain. This is generally referred to as the P3 model. They specifically have suggested that they would not be impacting or crowding out the investment that has traditionally gone into those models and those projects, but here is a clear suggestion that they are doing so
The other project, which I question myself, is the GO Expansion - On Corridor project. From my perspective, that project was proceeding under the Ontario government as a DBFM project, and only after the fact did CIB appear to come in and commit to providing funding to the project.
That was an example to me of a project that was proceeding as a DBFM P3 project here in Ontario under the Infrastructure Ontario model, with which I happen to be very familiar, given that I was previously at Infrastructure Ontario. It again is an example of the CIB perhaps not needing to commit to the project to meet the objectives it has laid out in its mandate.
4:30 p.m.
Conservative
Gerald Soroka Conservative Yellowhead, AB
Thank you, Mr. Chair.
I'll go to Mr. Bain again. I have to ask the question. Underneath the CIB, basically all the risk is removed for the contractor and it's all assumed by the taxpayer. Why has there not been so much private sector uptake on the CIB?
4:35 p.m.
Managing Director, Concert Infrastructure
At this juncture, as I previously responded, I think in some respects it's a little unfair to make that assertion or come to that conclusion at this point in time. Many of the projects that they've announced or committed to are in the MOU or advisory phase. It's unclear whether, or to what degree those projects will eventually attract private sector capital. I can't really speculate or judge.
4:35 p.m.
Conservative
Gerald Soroka Conservative Yellowhead, AB
I'll just interject there a bit. The fund has been operating for a few years already and we're still at that phase where they're not committed to it yet. That's why I'm kind of concerned that there hasn't been the uptake.
4:35 p.m.
Managing Director, Concert Infrastructure
I'm not sure it's an issue of uptake as much as it's an issue of the status or stage that these projects are in and how advanced the development of the projects are at this juncture.
4:35 p.m.
Conservative
Gerald Soroka Conservative Yellowhead, AB
I'll jump to Mr. Penner for one question.
Do you believe there is a single P3 out there that would work, or not?
4:35 p.m.
Climate and Social Justice Campaigner, Council of Canadians
You can cherry-pick from any set of examples on any issue. The evidence is clear that, on the whole, these projects cost more, deliver less and remove democratic control.
4:35 p.m.
Conservative
Gerald Soroka Conservative Yellowhead, AB
I am a former mayor as well.
One of the things that we always tried to do was get P3s, but it was very unsuccessful. We always tendered projects out, yet the people would go and say to us that we should have partnered up because we could have gotten a better price for the project if we had only done that.
You're saying that's completely false.
4:35 p.m.
Climate and Social Justice Campaigner, Council of Canadians
I think the Auditor Generals in B.C. and Ontario have been clear on this point. The evidence is there.
4:35 p.m.
Conservative
Gerald Soroka Conservative Yellowhead, AB
Okay.
Mr. Bain, do you believe that the CIB will have any positive effects on helping bring back the economy in the COVID crisis that we're in?
4:35 p.m.
Managing Director, Concert Infrastructure
Absolutely.
Insofar as it's able to advance and deliver infrastructure projects or have these projects advance to the market and be built, it certainly will have an impact. It's about jobs.
Obviously, how long these projects take to get to the point of shovels in the ground is an important consideration, but insofar as they do that, it's going to lead to jobs. It's going to lead to improved productivity and ultimately economic growth for the country. It's critical in terms of those priorities and objectives.
I think the consideration is really around timing here. It's maybe a little bit naive to think that these major projects, given the stage they're in, are going to have any immediate impact in six to 12 months. If we're talking 12 to 18 months, then in the medium term, I think that's a reasonable assumption.
4:35 p.m.
Liberal
The Chair Liberal Vance Badawey
Thank you, Mr. Bain and Mr. Soroka.
We're now going to move on to the Liberals with Ms. Jaczek.
Ms. Jaczek, you have the floor for five minutes.
February 23rd, 2021 / 4:35 p.m.
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
Thank you, Chair.
Thank you to both our witnesses. Certainly you've given us a lot to think about.
Mr. Bain, Mr. Penner seems to use P3s and privatization almost interchangeably. Is there anything that is in the Canada Infrastructure Bank that specifically mandates privatization in its pilot projects or the projects that have been proposed to date?
4:35 p.m.
Managing Director, Concert Infrastructure
From my review—and it was a fairly detailed review over the last number of days preparing for the committee—I've seen no reference or mention that the mandate of the CIB is privatization.
4:35 p.m.
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
In your experience, Mr. Bain, you mentioned that a number of your P3s, through Concert Infrastructure, constructed schools in B.C. Presumably, they're all in public ownership.
4:35 p.m.
Managing Director, Concert Infrastructure
Yes.
Just to correct you, it was not schools in B.C., but two bundles of schools in Alberta and two bundles of schools in Saskatchewan. They were all publicly owned.
4:35 p.m.
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
How could one assure Mr. Penner that public ownership is maintained within the structure of P3s? Would it depend on the amount of capital from each party that would determine who has ownership? I've heard of some situations where there is some privatization originally, but it reverts to public ownership after a number of years. Could you describe a number of different models?
4:40 p.m.
Managing Director, Concert Infrastructure
Sure. I think the majority of these P3 models in Canada are delivered on the basis of the various governments granting the private sector consortiums licences to the sites and the facility to carry out the scope of work for which they're responsible. Legal ownership of the land and of the buildings resides with the government, and that's clearly spelled out.
The other consideration is, as I laid out previously, around where you delineate the scope and the responsibility within these facilities or the projects. We are not, in any of the P3s that Concert Infrastructure is involved in, responsible for the delivery of public services. We're responsible for building, financing and maintaining the facilities. The government retains, as I said, ownership of the land, the building, and responsibility for those critical public services that are supported by the P3 facilities.