Evidence of meeting #67 for Transport, Infrastructure and Communities in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cory.
A recording is available from Parliament.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Mr. Cory or Mr. Duguay, can you explain to the committee how the Infrastructure Bank measures the success of a project, and CIB in general?
Chief Executive Officer, Canada Infrastructure Bank
Thank you for the question.
There are two basic ways. Ms. Vrooman was hinting toward this in her comments and her opening remarks.
There are two simple ways. One is getting more infrastructure under way in our country and closing that deficit. We measure it in our flow of dollars. In the multiplier effect I mentioned in my remarks, we've now committed $9.7 billion. That's $27 billion worth of projects. Now, the rest of that money is coming from other levels of government. It's coming from the private sector and indigenous communities. They're putting their skin in the game too. That's measure number one. It's more stuff getting built.
Measure number two is what outcomes that infrastructure delivers. That can be—as I mentioned, and it came up in Member O'Connell's question—new homes connected to broadband, new people able to access transit, new people able to access charging infrastructure and new people able to use low-cost electricity to get off diesel and other forms of electricity. We measure it on outcomes.
It's hectares of irrigated land in Alberta that we've been able to provide new irrigation services to and increase the productivity of crops. We call those our outcome measures. We report on them every year.
Liberal
Chief Executive Officer, Canada Infrastructure Bank
The impact of those things is where you really.... That's where infrastructure goes from concrete and steel to a benefit to Canadians.
That's correct.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Rogers.
Next we have Dr. Lewis.
The floor is yours. You have five minutes.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Thank you.
With respect to the $10 billion growth fund project, is it fair to assume that McKinsey basically provided the strategic advice for its creation, and that basically that advice informed the creation of the $10 billion growth fund project?
Chief Executive Officer, Canada Infrastructure Bank
No, to be very clear, the growth plan was very much a plan of the CIB's board and its management team, developed over the course of April until September 2020.
From my review of the records, McKinsey provided important insight into that, but it is not theirs to develop—that's management's—and it was developed by management and the board jointly and tabled in October 2020, just before I joined the CIB in November.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Right, but you said that your consultation informed that project—
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
—so if you look at what you were hired to do, you were consulted to provide advice on strategic-related matters to advance that particular mandate. You set out two particular mandates there of a COVID response and also net-zero policies. It informed that $10 billion growth fund, essentially.
Chief Executive Officer, Canada Infrastructure Bank
Yes, I'm sorry.
Just to be clear, Chair, the member's question said, “you were hired to”. I just want to be extremely clear—
Chief Executive Officer, Canada Infrastructure Bank
I was at Infrastructure Ontario—
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Sorry, I meant McKinsey. You worked at McKinsey and it's so hard to distinguish McKinsey from the Infrastructure Bank because there are so many people at the Infrastructure Bank who worked at McKinsey. My apologies for that.
You also stated that you believed that the broadband projects would not be created without the infrastructure project.
Isn't that an exaggeration? There are viable, competent private sector corporations that are actually invested in broadband creation, so that's an exaggeration, isn't it, Mr. Cory?
Chief Executive Officer, Canada Infrastructure Bank
This is an important question.
To be clear, those exact ISPs are our partners in our infrastructure projects. I absolutely agree that those projects would not happen without our partner, large and small ISP operators, that we're investing in, because we're making loans. We're not building the broadband.
To the member's question, I don't think it's an exaggeration at all to say that the reason the remote communities in our country don't have broadband is that, on their own, the ISPs do the math and say, it is not economical for us to go all the way down this road to get to this small number of houses, so we're going to put that off. Every year they have a scarce amount of capital that they're willing to put in.
By our providing a loan to them with long terms and with low interest rates—lower than they would get from a bank, and longer term than they would get from any other bank—it improves their economics enough that they can serve those customers—
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
I understand the mechanics of it, but you're not the only player in the game. Taxpayers are not the only entity that is funding this development, so it is an exaggeration, Mr. Cory, to say that those projects probably would not have been developed.
Anyway, I am going to move on.
The CIB was created by Dominic Barton, who was the CEO of McKinsey. Then McKinsey engaged in pro bono work to get the CIB started. Correct? They engaged in some pro bono advisory work. Did that not happen?
Chief Executive Officer, Canada Infrastructure Bank
They did not provide any pro bono work for the CIB, no.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Not at all, at the beginning...?
Okay.
But the McKinsey staff at the Infrastructure Bank, essentially there are a number.... How many employees from McKinsey did you say there are currently at the Infrastructure Bank, or who have been at the Infrastructure Bank?
Chief Executive Officer, Canada Infrastructure Bank
There are four of us, the three of us here today and my executive assistant.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
That is throughout the whole history of the Infrastructure Bank?
Chief Executive Officer, Canada Infrastructure Bank
Yes, to the very best of my knowledge.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Then it informed them on a $10 billion growth fund, providing strategic advice that would inform the types of contracts and risk assessment that it would take, and then McKinsey gained a $1.6 million contract from the Infrastructure Bank.
Mr. Cory, do you want taxpayers to believe that there is no connection between McKinsey and the Infrastructure Bank after all of that history?
Chief Executive Officer, Canada Infrastructure Bank
I appreciate the question.
I am not sure that's exactly my testimony. I worked at McKinsey 10 years ago and so did my colleagues. They provided three consulting contracts to the CIB, so we have worked with them in a professional way back in the time when the CIB was getting started and needed some consulting advice and hired them. They talked to other firms and chose McKinsey to do the work—as Mr. Duguay outlined—in a reasonable way, following the procurement policy that existed at the time.
I don't purport to say that there are no connections. There are connections in the form of my employment history and my colleagues'. There are connections in the form of the advice they gave the CIB back in the day. I think that's all natural.
Conservative