Transport Committee on March 9th, 2021

[Gerald Soroka, Conservative, Yellowhead, AB]

That's good to hear, because that was one of my concerns, whether or not this is going to be effective or helpful to these communities. There has been such a lack of infrastructure put into them, especially in the last couple of years, with water and that. Do you think they'll be able to address the water problems within these communities through the bank?

[Tabatha Bull]

My hope is that the government's commitment to address the water project will happen across the country with communities on its own, but we know the bank is looking specifically at revenue-generating projects in communities. A number of communities have those from ferries or from toll roads, for example. As we know, climate change is impacting the length of the winter road season and that has definitely impacted communities. There is an investment opportunity for toll roads and rail projects.

Also, as we look at any infrastructure project that's crossing treaty and first nations land, private investment is going to need to figure out how to work and partner with those communities.

[Gerald Soroka, Conservative, Yellowhead, AB]

Thank you, Ms. Bull, for those answers.

Ms. Van Buren, for part of the projects that they're developing, they need to have either an art project part of it or some day care. How do you feel about having to have some of these in a capital or P3 project? Do you feel that's part of the infrastructure?

[Mary Van Buren]

The community benefits piece of it is certainly aspirational. We believe that infrastructure investment already generates significant benefits to the communities, whether that's clean water, care or education.

Unrelated social aspirations should come out of separate funding. Infrastructure should be for infrastructure. Those other things—which are fantastic, whether it's day care or art programs, whatever it happens to be—should come out of the appropriate spending budget, not out of infrastructure.

[The Chair, Liberal, Vance Badawey]

Thank you, Ms. Van Buren and Mr. Soroka.

We're now going to move on to Mr. Rogers of the Liberal Party.

Mr. Rogers, you have the floor for five minutes.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Chair.

Thank you to our guests today for their presentations and the information they've been providing to us. I'm going to direct this question to Ms. Van Buren.

Our government has committed to supporting good projects across the country that create good union jobs and social benefits while at the same time reducing environmental impacts. In fact, last week Minister McKenna spoke to this group and talked about the thousands of projects she's approved in just under a year, which is more than the Conservatives approved in four years.

As our government remains focused on building back better, can you please update members on the state of the construction industry across the country during these unprecedented times? How can we support more Canadians to get back to work?

[Mary Van Buren]

In the early days of the pandemic, the industry collaborated in an unprecedented way—to use the buzzword of the year—and shared health protocols. In fact, they were used as an example of what other sectors could use. We demonstrated that we could continue to work safely by prioritizing not only our workers, but also their families and communities. We're very appreciative of being an essential service and we delivered on that. We have a good track record.

We do have a shortage of skilled workers. We have a campaign called Talent Fits Here. We are actively trying to reposition the industry as a career of choice. There has been talk in the media about a “she-cession”. Our industry can offer great jobs to women, who are mainly over-indexed in the service industry and under-indexed in construction.

That's what we want to do. We want to work with the federal government to attract women—young women and all kinds of women—and other under-represented segments to get those good-paying and consistent jobs. That's certainly an eye-opener for many when they've seen construction continue to work and to deliver on the amazing infrastructure that's needed for our country.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Ms. Van Buren. I'm so pleased to hear your comments related to females in the construction industry and the contribution they can make.

I'd like to direct the next question to Mr. Romoff.

We know that broadband infrastructure is no longer just a nice thing to have. Especially during this pandemic period, Canadians are increasingly dependent on working from home and learning remotely and they need access to reliable broadband. While broadband projects create immediate jobs and economic activity, the key here is that Canadians now don't have access to important sectors of the economy that can only be delivered virtually or digitally.

Can P3s help to address the needs across the country to have reliable networks where people can work and learn?

[Mark Romoff]

That's a great question. Thank you very much for that.

The answer is absolutely yes, and again, it doesn't matter whether it's a P3 approach or another procurement model. The reality is that there is clearly a need now for connectivity around the country, first and foremost, obviously, to enable a session like we're having today. There's no doubt about that, but when you think about remote communities, access issues around education and health, just to name two, would be hugely improved through putting in place IT infrastructure in order to make that happen.

You may be aware of a project, again in the Northwest Territories. A couple of years ago they laid fibre right up the Mackenzie valley, and that was a huge step in the right direction to enable that kind of connectivity. That did come to market as a P3, and it was a very successful project. There are many projects, by the way, in the United States where they are using a P3 approach for broadband, and we are seeing, without a doubt, interest by the federal government and a number of provincial governments in putting this infrastructure in place.

What I would say too is that there is another dimension to this. As Canada continues to try to attract talent from around the world, if we can't put in place a broadly based 5G network, we're not going to attract young people from around the world to come to Canada if they have access to only a 1G network.

There are many dimensions to this issue around broadband or putting in place the fibre that's necessary to take Canada back up as a country that's well connected, and as a country of our size geographically, we are the poster child for that kind of need, so without a doubt, we in the council are very strong supporters of rolling out a significant broadband initiative and, where it makes sense to do it using a P3 model, terrific. In other instances there are other ways to do it, but I think you have put your finger on a really critical infrastructure need in Canada, and I know that governments are turning their minds to this now.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you so much.

[The Chair, Liberal, Vance Badawey]

We're now going to move on to Mr. Shipley for the third round.

Mr. Shipley, you have the floor for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Unfortunately, Mr. Shipley is not with us today.

Let me see. Mr. Scheer, did you—

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

Sure.

[The Chair, Liberal, Vance Badawey]

Mr. Scheer, go ahead.

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

Thanks very much.

I would be remiss, since Mr. El-Khoury tried to make an untrue assertion.... Let me assure the witnesses and any other Canadians who are listening or watching that the Conservatives have always had a strong record of supporting infrastructure projects. Unlike this Liberal government, we've actually been able to get the job done. As we heard from witnesses in both this meeting and previous meetings, this current government is lapsing an awful lot of money. I think I've heard the statistic that up to 40% in some fiscal years have been lapsed. That means these projects aren't getting spent.

One of the reasons we're conducting this study is that we're trying to figure out why the Infrastructure Bank is just completely unable to get anything built. I know that some of you here today, and we've heard this in other meetings, are willing to give the bank the benefit of the doubt. I think we're under the third big rejig of the Infrastructure Bank after such an awful start. I think Ms. Van Buren characterized the Infrastructure Bank as being off to a “slow start”. Well, zero projects in four years would certainly be considered a slow start by anybody's method of calculation.

When you look at the types of things it was supposed to do and its complete inability to get them done, one of the things we're trying to figure out is where is this mythical private sector investment? When the Prime Minister promised...or when he announced this bank, it wasn't just a pilot project. It wasn't just a discussion paper or an initiative within a department. It was a signature piece. This was a hallmark of how well connected the Prime Minister was. After going off to international conferences and hobnobbing with the uber elite—we're talking billionaires, the 1% of the 1%—he came back to Canada and promised us this great tale. It's almost like a fairy tale. You might expect this to be an Aesop fable or a Brothers Grimm type of story, where we're going to put some magic beans into this bank and these massive beanstalks will grow with private sector money. Where is it all? That's one of the things we're trying to figure out.

Maybe I'll direct my question to you, Mr. Romoff, because you're from an institute that specializes in this. We heard a witness in a previous meeting talk about how, rather than unlocking private sector investment, it seems that with the current structure that they've now adopted, it's actually crowding out private sector money. In your analysis, why is it that in a model where the government was going to guarantee profits to private sector investors, to large multinational corporations, and take on the risk for Canadian taxpayers, we are not seeing more private sector investors willing to have skin in the game, willing to put ownership dollars into these projects?

The measure of success for the Infrastructure Bank was two times, four times, even seven times the private sector investment for every dollar of public money. So far, the only example we have is the project in Montreal, where it's a pension fund that has been committed. In all these other projects, we're just not seeing that private sector money. Do you have any guess or explanation as to why that might be?

[Mark Romoff]

I would say that the institutional investors and private equity in Canada are hungry to participate in projects around the country. As you may know, with respect to the Champlain Bridge in Montreal, there is significant investment in that project—

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

Was the Champlain Bridge under the Canada Infrastructure Bank, though?

[Mark Romoff]

No, it was not. What I'm saying is that the investment community is keenly interested, and as the right kinds of projects come to the bank for consideration, I think you'll see that interest is there.

I'll give you another example. A couple of days ago you heard from Mr. Bain, from Concert Infrastructure. They are significant players in the infrastructure space, and their investors are the pension funds from around the country. They are investing in these projects, and I think, as Mr. Bain said, when the right project comes to the bank, his investors will be keenly interested.

The same thing is the case with respect to Fengate Capital. You may be aware that they have managed a good portion of the Labourers' International pension fund. They are looking again for projects.

What intrigues me at the moment about the Infrastructure Bank is that, as you may be aware, they now have a mandate for unsolicited proposals and they have just announced their unsolicited proposals framework. I think there's real opportunity now for the private sector to identify the kinds of projects that will be of interest to the bank and work with the bank. In doing that, if these projects can go ahead, they will inevitably bring their private finance players with them to the equation.

You want private finance in these projects. You need that community to have skin in the game, because that's what really ensures that projects that are procured, irrespective of the model, deliver on their contractual obligations. It's the financiers that are at risk and their funding that's at risk. I'm optimistic that as the bank moves ahead with both its growth plan....

I'm particularly interested in the indigenous project portfolio they'll develop. I made a reference a little earlier to the Tlicho all-seasons road project in the Northwest Territories. That's a significant project where there is a 20% cash equity infusion coming from indigenous communities.

Therefore, the interest is there. The capacity to make those kinds of investments is there, and as projects come to the fore—

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

It's just not happening. For four years—

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Romoff; and thank you, Mr. Scheer.

We'll move on to our next speaker.

Mr. Fillmore, the floor is yours for five minutes.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you, Mr. Chair.

I'll start by saying I'm fairly certain that everyone in this meeting, witnesses and committee members alike, understands that infrastructure is the key to accelerating economies and is the key to repairing damage to economies. In fact, we're coming up on the 100th anniversary of Franklin Delano Roosevelt's new deal, which took the United States out of the Great Depression of the 1930s.

In fact, our own government has been involved in a $180-billion new deal. For the last several years, we've been investing in communities across the country. However, with the advent of COVID and the well-known infrastructure gap articulated by FCM, among other groups, and articulated by Ms. Bull this evening to be around $500 billion, depending on how you measure it, with the need to connect the country by broadband, the need to fight a climate war and the overwhelming need to invest more in indigenous communities, certainly now is the time that we need to be doing more to invest in communities.

What we've been doing so far, what governments tend to do, is to leverage federal tax dollars to get more provincial tax dollars and more municipal tax dollars. However, I think all of us on this call understand there's really only one taxpayer. The beauty of the CIB is that we can then use that taxpayer's dollars to leverage private capital, which is, of course, the whole intention of the CIB.

Ms. Bull, understanding that, I wonder if you could share with us the impact you see of private sector capital in first nations communities, on reserve, in remote communities, to achieve the things that need to be achieved in those communities.

[Tabatha Bull]

I want to highlight the project that Mr. Romoff has spoken about. There are a number of projects where indigenous communities have some equity that they could invest within their community in an opportunity also to bring revenue back into their community. It provides the chance for them to partner, to participate and to determine the outcomes of their community instead of the years we've been in place where our future was determined and planned for us.

If we look at indigenous communities that potentially have partnered on other projects, they have a revenue stream and equity that they want to be able to invest back into the infrastructure in their community, but if we look at the commitment that governments in the past and through the Constitution have made to communities, there is a role and a responsibility for government to play in that.

As I've said before, there are private investment corporations and private investors who believe in reconciliation in this community and understand the benefit and the effect that it can have when you have infrastructure, when you can have clean water, green energy and clean and energy-efficient houses, and when you can participate in the economy through broadband and run your business. The opportunity to unlock economic development within those communities and support business development in those communities is going to go back to support the GDP across Canada and Canada's economy. I think the impact of some of that investment is well known and the benefits have yet to be really, fully realized.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you very much for that, Ms. Bull. I am very grateful for that.

I'd like to ask the same question of Mr. Haley, but through the climate action lens.

What can we do with this private capital to advance this climate war that we're in?

[Brendan Haley]

Yes, you talked about the new deal. What I think the CIB can do for building retrofits is very similar to what you saw in those postwar years with the role of public investments in creating new markets for, say, residential mortgages or rural electrification—essentially, public investment-led....

It did things that the private sector saw as being too risky, but it led more through demonstration. It took it on, and then it demonstrated that this is actually a market where private investment is safe. It created those initial market structures so that things like standardization and like aggregation of projects.... That essentially created the right institutions for private-sector capital to come in.

I do think that's a bit different from just waiting for projects to come from the private sector. Again, the CIB needs to have this market-creating mission. I am encouraged by the new growth plan's taking on building retrofits as a new area.

[Andy Fillmore, Liberal, Halifax, NS]

Okay. Thank you very much.

Do I have another 30 seconds, or are we done?