Transport Committee on May 16th, 2023

[Michael Sabia]

Any reasonable reading of that note you just read out.... It's quite clear that whoever was writing the memo was being careful about not offending people inside the bank. The writer wanted to keep the numbers down to simplify the scheduling of a meeting with the then ambassador to China, who was essentially doing us the favour of providing some of his thoughts as we worked on how we could accelerate the performance of the Canada Infrastructure Bank.

The reference to “delicate” has to do with the person wanting to be careful and not offend any of the employees inside the bank. I don't think there's a conspiracy hiding behind there.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Did it not seem...? It may not be a conspiracy, but did it not seem like a conflict to you?

[Michael Sabia]

In no way did I see that as a conflict. Absolutely, in no way.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

The chair of the CIB meeting with the ambassador who helped create the bank—

[Michael Sabia]

Chair, how could that possibly be a conflict of interest, when Dominic Barton was simply providing some further thinking to help accelerate our own thinking with respect to...? There's not even the potential for a conflict of interest there. I simply do not understand the question.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Did the bank not have sufficient human resources capacity in order to create its own strategic direction? Did it have to go back to Dominic Barton for this?

[Michael Sabia]

Look, in the making of policy or in the making of decisions in large corporations or small corporations, you always reach outside. You always want to talk to other people. You always want to gather the greatest number of ideas and perspectives that you can, because the world is a complex place. You always want new ideas, different thinking and different perspectives, because that's how you make good decisions.

It's not as though the institution didn't have capable people. The institution has very capable people, particularly with respect to its leadership.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Mr. Sabia, is that why you—

[Michael Sabia]

It's always a good idea to reach outside and get different views. That's just good management.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Excellent. Thank you for that answer.

Is that why you reached out to McKinsey and engaged McKinsey while you were at the bank as chair? You actually engaged in a fairly high-profile McKinsey summit called the global infrastructure initiative. Was that one of the reasons why you did that?

[Michael Sabia]

Those kinds of conferences are opportunities to exchange views, hear different perspectives and gain the benefit of activities going on in other projects in other countries. That's a way of contributing to the global conversation around issues of considerable importance across many countries. It's a way of contributing to that, and it's a way of learning from that.

Again, it's a pretty straightforward activity. It's about getting out, getting ideas and contributing ideas. For Canada, it's about Canada being part of these global conversations on big issues, which is always to the benefit of the country.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Those global conversations on big issues, you had quite a few of them in your friendly relationship with McKinsey during the short period of time you were at the bank. Isn't that correct? That wasn't the first time you spoke on a McKinsey panel.

[Michael Sabia]

No, but I've spoken on all kinds of panels, whether they're Canadian Chamber of Commerce panels, boards of trade panels, BCG panels....

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

[Michael Sabia]

I've spoken on all kinds of panels. That's part of what being a senior executive is.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

I have a point of order.

I am really tired of Ms. O'Connell's personal attacks. Ms. O'Connell just mentioned that I met with a German MP, which I did as part of my job description. She has actually stated before that I am a Nazi sympathizer. I take deep exception to these personal attacks she is spewing, both in committee and in the House. If she's going to do that, I'm going to ask her to say it privately, so I can sue her outside of the committee.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Dr. Lewis.

I'll ask all members to keep side chatter to a minimum, please.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

I was just asking for maturity, for her to be mature instead of acting like an infant.

[The Chair, Liberal, Peter Schiefke]

Thank you, Dr. Lewis.

Next we'll go to Mr. Chahal.

Mr. Chahal, you have five minutes.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Chair.

I want to thank all the witnesses for joining us today.

I want to start with Mayor Brown.

Mayor, thank you for joining us and providing your opening remarks. It was quite eye-opening to me, some of the comments you made. As for your ambitious goals in reducing GHG emissions by 2050 by 80%, thank you for your leadership in doing that.

Now, $400 million from the CIB to electrify buses.... We had Mayor Sohi on last week, who talked about substantial investments to his city. I know my city of Calgary has also seen a substantial investment. If I add all those up, just on electric buses, that's over a billion dollars. I believe those three investments would be more than the previous Harper government's P3 program just on electric buses. That's a substantial investment.

Why did the City of Brampton decide to engage with the CIB?

[Patrick Brown]

It would be impossible for us to have the financial capacity to do this on our own, so we reached out to the federal government for suggestions on how we could achieve this. We were referred to the Canada Infrastructure Bank. Our transit department was really excited about this. They view this as a necessity if we want to hit our emissions reduction targets.

I would note that this allows us to purchase 450 zero-emission buses. We've already started with the first 10. I should flag that the only hiccup that we have in this right now is the charging infrastructure. Right now, we have a plan to purchase the buses, and we're in the process of trying to work out funding for the new charging capacity at our new transit terminal. Other than that, it is full steam ahead on what will be transformational for our transit system.

As I said before in my initial comments, I believe this is the way every municipal transit department in Canada is going to go, but when you're changing how you do transit, the initial costs are challenging. Twenty years from now maybe it will be a very different picture, but I think the cost initially when you have a transformation like this, when every municipal transit department is historically dependent on diesel buses, it's a big change.

This was a necessity. I would just note that there is no way we could have done this without the support of the federal government.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you for that.

Do you feel that the CIB's financing is more accessible compared with grants-based investments through the federal government? I think you answered that, but I want you to clarify that.

[Patrick Brown]

I would definitely prefer a grant, but this is an innovative way to fund this transition to electric buses. We started this conversation looking for a grant. It wasn't there, so this was the suggestion, and we were told to look at the Canada Infrastructure Bank, as they're looking at ways to help municipalities with this transformation, so we found a partner. There didn't appear to be infrastructure funding on a grant basis for this type of support.

[George Chahal, Liberal, Calgary Skyview, AB]

Mr. Sabia, I want to move over to you. It's been quite eye-opening. Mr. Cory mentioned the $27 billion invested in infrastructure across Canada. We know the previous program, the 3Ps under the Harper government, was about a billion dollars. A billion dollars is a lot of money, but it seems like a drop in the bucket compared to $27 billion invested.

Do you think that without the Infrastructure Bank we could have seen this investment of $27 billion in Canadian infrastructure from buses to irrigation to energy? Would this have been possible?

[Michael Sabia]

That's a very important question. It goes to the heart of what the Infrastructure Bank is about. Other members of this panel have talked about the extent of the gap that exists in Canada and elsewhere around the world in infrastructure. It's somewhere between $150 billion and $1 trillion. There's no government that can afford to do all of that, so the notion here is the government provides some funding, often concessionary financing that comes from the Infrastructure Bank. That draws in other people's capital, and then you get to a bigger number. Without that kind of catalytic investment, you would never get to that kind of number.

One other point that I want to make in answer to another comment that was made is that it's important to separate things. The Infrastructure Bank is designed to do certain types of financing in infrastructure, but let us not forget that the Government of Canada announced $60 billion of more traditional infrastructure. That $60 billion is designed exactly for the kinds of projects that Madam Therrien is talking about. That is direct financing for municipalities, for provinces, etc., in more traditional types of infrastructure.

It's not like the Infrastructure Bank carries the full burden here. It does not. That's not the way to solve Canada's infrastructure problem. It's partly the Infrastructure Bank, which does specialized financing, and then there's the substantial commitment from the government itself.