Transport Committee on March 23rd, 2021

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

Thank you.

In 2019, an article published in Le Journal de Montréal reported that your organization did not require knowledge of French in its hiring process.

Is that still the case?

[Ehren Cory]

Our goal is to ensure that we can provide all of our services in both official languages. That's critical.

At the individual employee level, there are wide variants in French capabilities, but as an organization we are absolutely committed to providing all of our services in both official languages.

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

How many employees does the Canada Infrastructure Bank have?

[Ehren Cory]

It currently has nearly 80 employees.

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

How many employees speak French?

[Ehren Cory]

I'm afraid I don't have the stat for you. I'll have to get back to you.

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

I would appreciate that very much.

In an interview you recently gave, you said that, owing to the current low interest rates because of the pandemic, you had to get involved in riskier projects, as private sector investors can obtain loans at low interest rates.

In a way, those investors no longer see the need to use the Canada Infrastructure Bank. We are actually seeing that they already did not see the use of doing so, as we have learned from the Parliamentary Budget Officer that all the projects you are involved in are related to investments targeting institutions, such as municipalities, the provincial government and pension funds, and that there are no private investments. In any case, private investors were already not turning to you.

You also said you had to take more risks to attract private sector investments. Do you plan to gamble with taxpayers' money?

[Ehren Cory]

I think that's a very important point.

The point in my previous comments, which I think is important, is that low-cost financing alone is not the bottleneck to getting projects done. Instead, it's about long-term, stable, low-cost financing, coupled with smart risk taking.

To the member's question, I think it is important. You have to go back. What's the bottleneck? Why are projects not built today? It's not because of access to capital; financing is plentiful. Many projects still don't get done, and that's one of the great conundrums that we face in the world: There's all this capital and yet this huge infrastructure deficit. Why don't the two ever meet? The answer is that projects often have really long time horizons and come with quite a bit of risk.

The point is that the CIB is meant to be engaged as the bridge to take on a share of that risk and provide a tranche of low-cost capital, and by doing so make projects financeable with private sector partners.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Cory, and thank you, Mr. Barsalou-Duval.

We're now going to move on to the NDP.

Mr. Bachrach, the floor is yours for six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you very much, Mr. Chair, and thank you, Mr. Cory, for appearing today before the committee.

Mr. Cory, I read the Parliamentary Budget Officer's report this morning with great concern. This reads to me like a pretty stunning indictment of the Canada Infrastructure Bank to date. These are some of the things mentioned in that report.

The bank is now on its third chair and its second CEO. It has paid millions of dollars in severance—we're not quite sure for what, because it couldn't have been for performance.

It has only invested $1.23 billion [Technical difficulty—Editor] out the door. That's only 3.5% of the 10-year investment target for the bank, so it's way behind. Of the 420 applications [Technical difficulty—Editor] 45% of them were rejected because they didn't fit the bank's mandate. This raises huge questions.

Of course, what's making headlines this morning is the fact that the bank hasn't delivered on what was really its biggest promise [Technical difficulty—Editor] much-lauded private investment. We had the Prime Minister saying, “the infrastructure bank will allow us to create new historic investments in infrastructure that go well beyond what we are putting on the table.” But of course, it hasn't. This is an utter failure by the very terms of success set by the bank itself and by the minister.

The other thing that's very concerning is the way the bank has defined success. We've heard from all kinds of witnesses who have pointed out that the ideological fixation with leveraging private capital is deeply problematic. The Canada Infrastructure Bank has promised private investors returns of somewhere in the neighbourhood of 7% to 9%. The question is, where does that return come from? Well, it comes from communities; it comes from citizens. The costs for those projects are higher because of the profits that have to go to the private investors, and that's simply not in the public interest. We've heard that again and again.

The fact is that the Liberals have spent considerable time and money trying to make this model work, and what the PBO's report today shows is that it's been an utter failure.

Obviously, you've only been on the job for a few months, so you can't shoulder too much of the blame for this failure, but my question for you is, how did we get here? How did we get to the point where four years in, the bank has so little to show for itself?

[Ehren Cory]

Thank you for the question.

I don't accept the premise that we have so little to show, and I'd like to talk about why I say that. In a moment, I will ask John to talk about our investment funnel. I think it's really important.

The PBO—and we will continue to engage with them—has taken a good look at our funnel. I'd like to give you a bit more context for it. I think it's very important to understand.

To your question, first, I think we define success exactly as this committee would want us to. I'm absolutely clear about this. We have one and only one definition of success—to get more infrastructure built faster than it would have been otherwise, to the benefit of Canadians. It's very simple.

We do that with outcomes in mind, four in particular. I mentioned them in my opening remarks, but I'll summarize again: one, reduction in greenhouse gas emissions and movement to a net-zero economy; two, improved connectivity for Canadians, both transit and broadband; three, accelerated economic growth in jobs, creating a path of GDP, like our investment in irrigation and trade infrastructure; and four, investment in participation of and in benefit to indigenous communities.

That's our frame, and that's how we measure results.

I do think we're in a different era. That is true. I think it's really important for the bank—and this has been my push since I joined—that we think in multiple time horizons. There are those transformational, long-term projects that the bank has been engaged in. REM was one of those out the door. As you know, there are a dozen or so other MOUs that are long-term, really important projects. They'll happen, but they do take a while.

The growth plan we launched in October, and certainly my push since becoming the CEO, has been to also focus on the nearer-term types of opportunities—the investment in buses in Brampton, the investment in building retrofits or irrigation projects—that can actually go from a conversation to due diligence, negotiation, term sheet and money out the door in a 12-month cycle.

That's what you're seeing from us. As I've talked about today, we've made three of those actual commitments, with signed term sheets that have gone through our board. It's not just the Alberta irrigation project; it's also Oneida, and we also have a bus deal. Those aren't speculative or prospective; those are real, and we have an additional eight for which we have drafts of term sheets. I've already gone to my board on some of them, so they will happen.

I understand the sense of wanting to see it to believe it, but I'm here to tell you that we have real projects in the pipeline. That puts us in a very different place.

Now, we do continue to advance those longer-term things, but we are also much more active on immediate investments.

If I could, I'll just get John to talk a little bit more about the funnel—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Cory, we have very limited time, so I'd like to ask you my next question, which is a follow-up.

I'm not sure I totally understood what you've just told me. My question was, how did we get here four years in, where the bank has utterly failed to deliver on its promises? I think I heard you say it hasn't been a failure.

Do you feel that, at this point, the Canada Infrastructure Bank has been a success?

[Ehren Cory]

I feel we are on the right track, and I feel the Canada Infrastructure Bank remains an incredibly important part. We're just one tool in the tool kit, but a really important part of how we're going to get more infrastructure built to the benefit of Canadians.

I think the work we've done today does lay the groundwork for that, and it's really important to acknowledge that it has been critical to the long-term success of transit, transmission and clean power projects across the country. So despite—

[The Chair, Liberal, Vance Badawey]

Mr. Cory, if you want to get some of that in, you can do it in an answer to another question.

We're now going to move on to our second round.

We have Mrs. Kusie for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Chair.

Thank you very much to both of our witnesses for being here today.

Before I move to questioning, Chair, I'm going to start with moving my motion, which I put on notice on Wednesday, March 10. I think it's very timely, given the activity last week relative to flight PS752 and the Liberal government coming out, as they should, so strongly against the report issued by the Iranian government indicating that, according to their report, they believe it was human error.

I'm very happy to see both Minister Alghabra and Minister Garneau stand up for the 176 individuals who perished on board, including 55 Canadian citizens and 30 permanent residents.

I think further in support, taking the team Canada approach as we like to do, it does merit a study here at the committee, and that is the reason I put forward the notice of motion. Given the activity that took place last week, with the Iranian government issuing...their civil aviation authority blaming human error, and the dismissal of this information by both the transport minister and the foreign affairs minister, I certainly think we owe it to the victims' families, as well as to our beliefs here in Canada of justice, human rights, the rule of law, democracy—I could go on, but certainly standing up for justice abroad—to undertake this study.

At this time, Chair, I will read the motion into the record again, and I would ask, please, that we go to discussion and a vote today.

The motion is as follows, as given notice of on Wednesday, March 10, 2021:

That the Standing Committee on Transport, Infrastructure and Communities undertake a study of no less than five meetings on the government’s response to the Ukraine International Airlines Flight 752 tragedy and that the committee report its findings and recommendations to the House.

Thank you, Chair.

[The Chair, Liberal, Vance Badawey]

Thank you, Mrs. Kusie.

Do we have questions or comments on this?

Ms. Jaczek, you have the floor.

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

Thank you very much, Mr. Chair.

I certainly understand where Mrs. Kusie is coming from. Several Iranian Canadians in my riding perished in the catastrophic misadventure with the downing of that flight. I think we understand that this is the transport, infrastructure and communities committee, and I would really like to see an emphasis on the safer skies agreement, should we look at this particular study. We know that Canada is taking a leadership role in that agreement—where there is conflict and what protocols should look like.

I would be interested in that aspect because, overall, I feel it is much more a foreign affairs issue. Obviously, both ministries would have an interest, but if we could put the emphasis on that, I'm wondering if we need as many meetings as you're suggesting. I would have thought maybe two would suffice, quite honestly, because we have so many studies lined up already that we have determined need to be looked at.

I just want to offer those comments.

[The Chair, Liberal, Vance Badawey]

Thank you, Ms. Jaczek.

We're now going to move on to Mr. Fillmore.

Mr. Fillmore, you have the floor.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you, Mr. Chair.

I am interested to hear what our colleagues have to say about this as we talk about the motion.

I would say that I agree with Ms. Jaczek. This seems to be, on its face, more of a foreign affairs issue than a transport one, quite frankly. I think a lot of the information surrounding this case either is likely to be classified or has not been shared by Iran, which may mean that a study would be of limited use anyway.

I would say that, with regard to the point about the safer skies, Canada is leading our international efforts to forge a safer skies agreement that is going to create new protocols on how we manage airspace in conflict zones, and that could be worthy of a study, I think. It's not clear, if we were to proceed, that it would require five meetings. Again, the incoming information is going to be fairly limited.

As is always the case, we have a number of studies that are waiting to be dealt with, which we've already said we want to get to—more than we can realistically complete over the next year.

On a personal note, I would say that many Canadians were touched by this disaster. In fact, my own father's dentist was in this terrible tragedy, so it does reach a lot of people.

I am interested to hear more about what our colleagues have to say on this matter.

Thank you.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Fillmore.

Are there any further comments or questions?

Mr. Rogers.

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

Mr. Chair, I think Ms. Jaczek and Mr. Fillmore captured most of the points I wanted to make.

I understand, of course, that this is a very sensitive and difficult topic—my deepest condolences to all the people who were impacted by this particular tragedy.

I just wonder if there are other committees studying this, and whether or not it should be in a different committee, like foreign affairs.

Number one, if we were to proceed, what do we drop from our list of studies that we've already agreed on?

Number two, if we do decide to move forward, I'd suggest, like Ms. Jaczek, that we certainly reduce the number of meetings we could do so that we can get some of our other studies completed as well.

Thank you.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Rogers.

Mrs. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair.

I certainly recognize the comments of my colleagues indicating that other committees would have an interest in it, but I would like to specifically point out the supplementary mandate letter to Minister Alghabra, delivered by the Prime Minister on January 15, 2021, where it explains very clearly:

Work with the Minister of Foreign Affairs to implement recommendations and lessons learned from the report of the Special Advisor for Canada's ongoing response to the Ukraine International Airlines tragedy, including commemorating the lives of the victims and supporting their families, pursuing truth and accountability from Iran, and preventing future disasters through the Safer Skies Initiative.

Of course, Member Jaczek indicated that.

It continues, “You will be supported in this work...” and it goes on.

Certainly, the supplementary mandate letters are very clear. They are directives from the Prime Minister, the highest office in this country, and I am certain that Minister Alghabra would like to fulfill his mandate. I genuinely believe that our study would help him in fulfilling this mandate.

[The Chair, Liberal, Vance Badawey]

Thank you, Mrs. Kusie.

Are there any further questions or comments?

Mr. El-Khoury.

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

Thank you, Mr. Chair.

I believe [Technical difficulty—Editor] due to the congested agenda. I don't know if Mrs. Kusie will be open to reducing the number of meetings.

In addition to that, I would like to hear what our colleagues from the NDP and the Bloc think about that.

Thank you.