Transport Committee on March 23rd, 2021

[Ehren Cory]

Correct. That's the Caisse de dépôt. They represent pensioners from across the province—millions of pensioners. They also draw on other institutional funders in partnership. So yes, that again represents non-governmental, non-grant funding, in my mind.

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

I think I only have time for one more quick question.

The Parliamentary Budget Officer report states that the REM project lost $87.5 million last year. Are Canadian taxpayers on the hook for that through the Canada Infrastructure Bank, or are Quebec pensioners on the hook for that through the Caisse's investment?

[Ehren Cory]

If I could clarify, obviously when we make a loan to a project, we always need to be tracking the expected outcomes of that project and our repayment. As any investor does, you always create an allowance for potential risks as they occur. That is not a loss.... It is not a loss that is crystallized, but it is an allowance one must make. Certainly COVID has played a role in the progress of that project, and that creates uncertainty around timing of opening, and ridership eventually, so as a prudent investor—

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

That's not a loss?

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Cory.

Thank you, Mr. Scheer.

[Ehren Cory]

Thank you, Mr. Chair.

[The Chair, Liberal, Vance Badawey]

We're now going to move on to the Liberals, and we have Mr. Sidhu.

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

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Mr. Chair.

First of all, thank you to our witnesses, Mr. Cory and Mr. Casola, for taking the time to be with us here today.

Several witnesses have touched on the Canada Infrastructure Bank's potential to create a market for much-needed investments in infrastructure that will play a crucial role in helping to combat climate change and make our country greener.

Our new initiative, which is very exciting, is committing $1.5 billion in the next few years to fund zero-emission buses and their charging infrastructure, which I know residents of Brampton would love. This new commitment was very well received here in Brampton. Transit investments are always welcome in Brampton, such as the federal government's $45-million investment into Brampton Transit, which is the largest federal investment for Brampton Transit in over 10 years.

Mr. Cory, do you think this kind of acceleration in the rollout of zero-emission buses would be happening without the CIB's involvement?

[Ehren Cory]

Thank you for the question.

The challenge in many types of infrastructure—and zero-emission buses are a wonderful example—is that there is a revenue source. In this case, it's the savings that are generated over time as you switch from diesel to electricity. I could say the same thing about our building retrofits program. It is similarly a way to try to retrofit buildings, make them more energy-efficient and over the long term create savings.

The problem with those types of projects is that the payback period is long and it's quite uncertain. It depends on the technology, on the speed of conversion, the reliability. So there are technological challenges. There are also commercial and market factors, what happens to the future price of both diesel and electricity, just to give an example.

What happens is that the private sector alone doesn't actually make those investments, even though they might over the long, long run be ROI-positive. The bridge that the bank fills.... To answer your question as asked, yes, I think the CIB plays a critical bridging role to making those projects happen by taking on some of the upfront risk and sharing in it with the private sector—not taking it on alone but sharing it together. That also drives investment and allows us to make projects happen certainly much faster than they would have, and many that wouldn't happen at all under purely commercial terms.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that, Mr. Cory.

We're all excited to hear about electric buses and the announcements that are coming up.

Mr. Chair, can I split my time with Mr. Fillmore?

[The Chair, Liberal, Vance Badawey]

Absolutely.

Mr. Fillmore, go ahead.

[Andy Fillmore, Liberal, Halifax, NS]

Thanks, Chair, and thank you, Mr. Sidhu.

Mr. Cory, in this morning's web post, the PBO said that the CIB has not leveraged any outside investment and is only being funded by different levels of government.

I don't agree with that characterization. It sounds like you may also have a different interpretation. Would you want to talk a bit more about what the CIB has done in the past and what it's continuing to do to attract institutional and private investment to get more infrastructure projects funded and built across the country?

[Ehren Cory]

I appreciate the question. I think it's important for us that.... When we look at each of our projects, we think of the funding coming fundamentally from three sources. There's the traditional government-funded grant and subsidy world. Much infrastructure gets built that way, as well as many elements of social infrastructure. That's really important. That's always going to be the bedrock to how we get a lot of important infrastructure built. At the other end of the spectrum, there is truly commercial capital, but there's this important gap in the middle, and that's what the CIB is meant to fill.

To answer the member's question, yes, absolutely, we think of each of our projects as having money from each of those three streams. I talked about Alberta irrigation as an example, having $400 million from us, $250 million or just shy of that from the Alberta government, and then $163 million of non-governmental funding from irrigation districts.

I would say the same thing with regard to REM. There was $1.3 billion from us. There was a $1.8-billion contribution from the Government of Quebec, and there was $3.2 billion that came from the Caisse, from an institutional non-governmental investor.

[Andy Fillmore, Liberal, Halifax, NS]

In the seconds we have left, is there anything different that the CIB is doing going forward to draw out those kinds of investors, those institutional and private investors? Is it doing anything differently than previously?

[Ehren Cory]

One thing that certainly has evolved for us is how to get that contribution over time. Let me give you one example. On zero-emission buses, we're working with municipalities, which would be our biggest partners on those projects. The member mentioned Brampton, for instance, where a municipality wants to convert its fleet away from diesel to electric, or some other non-emitting bus, and build a charging infrastructure. Up front, that might be significantly funded by grant money, traditionally, both federal and from the municipality itself, and from a loan from the CIB. Over time, once the buses are purchased, on the road, and the savings case is proven, we might actually then draw in additional private capital partway through.

This is called syndication. It's the kind of thing we're now looking at. It's not only about how much you can bring in up front, but over the life of the asset.

[The Chair, Liberal, Vance Badawey]

Mr. Fillmore, you have time for one more quick question.

[Andy Fillmore, Liberal, Halifax, NS]

I'll cede my time back to Mr. Sidhu.

[The Chair, Liberal, Vance Badawey]

Mr. Sidhu, the floor is yours.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that, Mr. Fillmore.

I'm glad you mentioned Brampton. Mayor Patrick Brown is very excited about this program as well, so I wanted to throw a plug in there for that. It's really exciting.

I only have 10 seconds left, so I won't be able to ask my next question, as it's very in-depth, but thank you so much for your time.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Sidhu, Mr. Fillmore and Mr. Cory.

We're now going to move to the Bloc Québécois.

Mr. Barsalou-Duval, the floor is yours for six minutes.

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

Thank you very much, Mr. Chair.

Mr. Cory, as soon as the Canada Infrastructure Bank invests a single dollar in a private project—be it as a loan or other—that project becomes a project of the Government of Canada, since the Canada Infrastructure Bank is a Crown corporation. That exempts it from having to comply with Quebec's environmental legislation and having to respect municipal regulations, for example.

Do you think that's a good thing? Do you commit to never bypassing Quebec's laws and municipal regulations?

[Ehren Cory]

It's critically important to start from the core. The projects we do are almost entirely in partnership with provincial, municipal and territorial governments or first nations and indigenous peoples, so there is some other level in almost all of the cases with our projects. Certainly, every one of our projects needs to happen in a real jurisdiction, and under the rules of that jurisdiction.

The federal government, as all of you on the committee know, and I don't need to repeat the statute, owns very little of the infrastructure in our country.

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

Thank you.

I understand what you are telling me. As you work a lot with municipalities and the provincial government, you don't think that will happen, but you are still not making a commitment.

In 2019, the Commissioner of Official Languages revealed that the Canada Infrastructure Bank had been unable to communicate or provide its services in both official languages since its creation. Following the investigation, your organization committed to implementing a clear action plan to ensure that official language obligations would be met.

Are you now able to provide all your services in French?

[The Chair, Liberal, Vance Badawey]

Mr. Cory.

[Ehren Cory]

Thank you, Mr. Chair.

Thank you for the question, Mr. Barsalou-Duval.

It is critically important to the bank. We have to confirm we have followed and implemented the recommendations to ensure that all services are provided in both official languages. Clearly, we work across the country and we work in the language of our partners. For some of our current investments, French is the primary language. All of our administrative functions and all of our engagement with the public are available in both languages.