Thank you so much, Mr. Chair.
While Mr. Scheer has made it very clear that he does not like the Canada Infrastructure Bank and has has alluded to lapsed funds. He has talked about the bank losing money, which in both cases is an inaccurate description of how the bank, in fact, functions.
I want to address in particular why this specific project, the Lake Erie Connector, a clean power project, is so important, and why it is particularly fitting that the Canada Infrastructure Bank be involved in this project.
Clean power projects are often delayed or not developed because of financing challenges and gaps in the capital structure, so to help deliver clean power projects, the CIB will provide low-cost and long-term capital, often pegged to revenue streams that are not typically sufficient for traditional debt and equity investors. So in working with governments and project developers on delivering clean power projects, the CIB will structure these investments to increase the use of private sector capital, reduce the weighted average cost of capital, provide certainty on long-term debt and equity returns, and transfer more construction and operations risk to the private sector.
Of course, clean power is particularly important and, as we know, the CIB, in its growth plan, has dedicated funds, some $2.5 billion, for clean power. I think we all understand—at least most of us do—that climate change is a serious problem globally and that Canada needs to do its bit, so clean power is a particularly appropriate area for investment by the Canada Infrastructure Bank.
Because I was particularly interested in this project, certainly when I saw that Ontario's minister of Energy, Mines and Northern Development and Minister of Indigenous Affairs, the Honourable Greg Rickford, was so enthusiastic about the project, I decided to do a little bit more reading about this project. I want to make sure that everyone on the committee has a full understanding of what we're talking about in this case. First:
The Canada Infrastructure Bank (CIB)and ITC Investment Holdings (ITC) have signed an agreement in principle to invest $1.7 billion in the Lake Erie connector project. Under the terms of the agreement
—this is all publicly known—
the CIB will invest up to $655 million or up to 40% of the project cost. ITC, a subsidiary of Fortis Inc., and private sector lenders will invest up to $1.05 billion, the balance of the project's capital cost.
What exactly is the Lake Erie Connector?
...a proposed 117 kilometre underwater transmission line connecting Ontario with the PJM Interconnection, the largest electricity market in North America.
The 1,000 megawatt, high-voltage direct current connection will help lower electricity costs for customers in Ontario
—I made reference to this being especially important for customers in Ontario—
and improve the reliability and security of Ontario's energy grid. The Lake Erie Connector will reduce greenhouse gas emissions and be a source of low-carbon electricity in the Ontario and U.S. electricity markets.
During construction, the Lake Erie Connector is expected to create 383 jobs per year and drive more than $300 million in economic activity. Over its life, the project will provide 845 permanent jobs and economic benefits by boosting Ontario's GDP by $8.8 billion.
The project will also help Ontario to optimize its current infrastructure, avoid costs associated with existing production curtailments or shutdowns. It can leverage existing generation capacity and transmission lines to support electricity demand.
ITC continues its discussions with First Nations communities and is working towards meaningful participation in the near term and as the project moves forward to financial close.
It's another win-win involving our indigenous communities.
The CIB anticipates financial close late in 2021
—if not disrupted by this particular motion—
pending final project transmission agreements, with construction commencing soon after. ITC will own the transmission line and be responsible for all aspects of design, engineering, construction, operations and maintenance.
This has been an ongoing discussion for many years because ITC actually acquired, or decided to commence, the Lake Erie Connector project in August 2014 and has already received all of the necessary regulatory and permitting approvals, including a U.S. presidential permit and approval from the Canada Energy Regulator.
This is a very important investment and there is a commitment to go ahead. It is extremely important for citizens in Ontario.
It has received a number of endorsements, and the CEO of the Canada Infrastructure Bank at the time, Ehren Cory, said:
This project will allow Ontario to export its clean, non-emitting power to one of the largest power markets in the world and, as a result, benefit Canadians economically while also significantly contributing to greenhouse gas emissions reductions in the PJM market. The project allows Ontario to better manage peak capacity and meet future reliability needs in a more sustainable way.
This is a true win-win for Canada and the U.S., both economically and environmentally.
As I've said many times during the debate on this motion, any move that might cause anxiety to possible investors in this project is something that I think is harmful. That is why I am, at this point in time, not convinced that this motion should move forward, even with the proposed amendment by Mr. Scheer—which, of course, we will be studying very carefully.
Thank you, Mr. Chair.