Thanks very much for inviting me here today to comment on the mandate, activities, projects and financing of the Canada Infrastructure Bank.
I've noted the types of witnesses that you have spoken to thus far—the advocate, the critic, the defenders—and I'm sure my answers will make clear where I fit here too.
I have certainly published a few things that have been quite critical of what the CIB might be. I say “might” because it hasn't done much yet. I remain very concerned about particular possibilities such as asset recycling, which, hopefully, we can discuss more in the Qs and As, but since not much has happened yet with the CIB, I think we're in quite a great spot to do something different to build back better in a meaningful sense.
Before turning to your questions and to the other witnesses, who I'm sure represent very diverse views on the subject, I would like to establish seven foundational premises that I hope we can all agree on across the partisan divide.
One, public infrastructure is important generally but also in particular priority areas, and this has been all the more heightened by the pandemic.
Two, public infrastructure is needed. There is an infrastructure gap in this country, with much at the end of its life cycle or inadequate for meeting modern needs.
Three, public infrastructure is services. Hospitals are health care, transit is urban planning and schools are education. Public infrastructure serves a public good and is a public asset in more ways than one.
Four, there are several ways to finance public infrastructure, but only a few ways of funding it, namely, through Canadians as taxpayers and service users.
Five, there is no financing crisis in Canada. Our pension funds are well capitalized, the bond markets are friendly towards all levels of government and many of our Crown corporations are already self-financing.
Six, some forms of finance are preferable over others. Canadians' pooled savings and Crown corporations should be investing in our public infrastructure, not Wall Street hedge funds looking for P3 equity ownership.
Seven, commercialized public infrastructure offering private equity isn't the solution to the infrastructure gap we face. User fees are often insufficient to repay capital costs, megaprojects often remain reliant on public grants and subsidies, and private equity gives unaccountable entities ownership rights over vital public services.
With these seven points in mind, I think it's plain that the CIB's link to private equity and commercialized infrastructure undermines other key parts of its mandate, such as operating in the public interest. We do not need to give away ownership rights to achieve our infrastructure aims.
A few months ago, the new CIB CEO promised P3 enthusiasts that, “In [the] future the CIB will be more active in soliciting partnerships rather than waiting for offers” and that he'll “start with the market and work backwards”.
What is he talking about here? He's actually referring to reversing the procurement relationship, shifting from the question “what's needed in Canadian communities?” to “what's wanted by global investors?”
Not only is this is a dangerous position that aligns infrastructure decisions with dogma rather than merit, it also directly contradicts what Minister McKenna said to this committee just two weeks ago: that the CIB would develop projects within “priority areas” for the public good and that it “isn't about privatizing” infrastructure.
For the Bloc, the CIB's commercialized mandate intrudes on provincial decision-making. For the NDP and Greens, the CIB threatens progressive values. For the Liberals, the CIB presents deep contradictions. For the Conservatives, it violates their 2016 party position. As MP Poilievre wrote in 2017 in a Maclean's op-ed, with the CIB, powerful financial interests “get the rewards and taxpayers get the risk.”
We need the CIB to do better than this. We need a knowledge bank pooling talent, a source of very low-cost public financing and an ex post evaluator, an entity that evaluates projects during operational and long-run multi-decade phases. We need an entity that values public assets above all and is guided by a public sector ethos.
To amend, as those French-speaking members will certainly know, means to make better. Building back better requires amending the Canada Infrastructure Bank mandate, unshackling it from private equity and commercialization so that it can make good on its commitments: commitments to operate for the public good, to provide infrastructure for indigenous and rural populations, to help with the green transition and to support local needs, as I'm sure we'll hear about from the other witnesses as well.