Transport Committee on June 8th, 2023

[Bill Morneau]

I had no exposure to any of the decisions that the Canada Infrastructure Bank took on how it would best meet its goals. Whether it did that internally or whether it did that with advisers was something that was not ever brought to me, nor did I have an opinion on it at the time.

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

Okay.

I have one last question for you.

We've talked about the independence of the Canada Infrastructure Bank so far. If we go back a bit, we'll recall that the government announced that it was providing a grant for the famous Réseau express métropolitain, or REM, project before the creation of the Canada Infrastructure Bank. Once that was in place, this grant became a loan from the Canada Infrastructure Bank. When I asked Mr. Sabia what the rationale was, he said it was a political decision.

Are the decisions of the Canada Infrastructure Bank really made independently?

In reality, are there also political decisions that are dictated by the government?

[The Chair, Liberal, Peter Schiefke]

Give a 10-second response, please, Mr. Morneau.

[Bill Morneau]

I'm not aware of how those two decisions were taken other than to say that we would see a project like the REM project as a positive infrastructure project for the country, so that would have made it a good candidate for the Canada Infrastructure Bank.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Morneau.

Thank you, Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Morneau, at the meeting at Meech Lake in May 2016, there was a memo that showed that the members of the council were told that their mandate included coming up with “bold ideas and policy approaches that are not bound by operational or political constraints and develop recommendations to inform budget 2017.”

What would you describe as being political constraints?

[Bill Morneau]

I was seeking, with the advisory council, to get expertise from people who weren't in politics and who weren't necessarily in government but who would bring us the kinds of ideas that could help us to change a trajectory of growth that we saw as problematic.

We wanted to make sure that we didn't have any exclusions in terms of ideas. Of course, because the advisory council came up with ideas and worked on things that they thought could have an impact, that didn't mean we necessarily would implement them, but we thought that thinking would be important for us in trying to create a better outcome for Canadians.

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

I have an article here, Mr. Morneau. The headline is, “Morneau says new infrastructure bank to shield taxpayers from project risks”. I assume those risks include things like cost overruns. Is that correct?

[Bill Morneau]

I can't comment on that particular article, not having seen it, but the idea behind the bank—

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

The question was if those risks include things like cost overruns. Is that the kind of risk that you were trying to shield taxpayers from?

[Bill Morneau]

Again, I haven't seen the article, but the idea from the bank is to crowd in other sources of capital, which would of course reduce the amount of money the government is spending on a project and increase the amount the private sector spending. By definition, there would be a risk—

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

You're saying that's the reasoning behind the bank, but the question was this: Do the risks you were trying to shield the taxpayers from include cost overruns?

[Bill Morneau]

Again, the risks of the projects would have been less for the government if there were other investors involved, so—

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

Do risks include cost overruns? Is that an example of the risks you were trying to shield taxpayers from?

[Bill Morneau]

Broadly speaking, the way we were looking at the Infrastructure Bank was to crowd more money into infrastructure, and that—

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

I'm absolutely stupefied by the lack of a response here. It's a pretty straight-up question: Do the risks that you're trying to shield taxpayers from using the Canada Infrastructure Bank include cost overruns?

[The Chair, Liberal, Peter Schiefke]

You have 10 seconds for a response, please, Mr. Morneau.

[Bill Morneau]

I thank you for your question. Unfortunately, I haven't seen the article, but I've been clear on what we were trying to achieve.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Morneau, and thank you, Mr. Bachrach.

Next we have Mr. Genuis.

Mr. Genuis, the floor is yours. You have five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

Mr. Morneau, thank you for being here. I do want to recognize your significant experience in both the public and private sector.

In order to help set the context, I want to ask you a couple of questions about the budget. What letter grade would you give the latest federal budget?

[Bill Morneau]

I have not taken the time to go through the budget line by line. Certainly, during my time in office, included among the things we did that I think were important was the Canada Infrastructure Bank as an important budgetary—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Just to follow up on that, I'm not asking you to quote chapter and verse, but overall, in terms of your impression of the budget, is it an A budget, a B budget, a C budget or a D budget? What do you think?

[Bill Morneau]

As you can imagine, I took some time to prepare for this committee meeting this morning. I made sure I reviewed the Canada Infrastructure Bank. The things I reviewed did not include the budget for this year.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay. I'm trying to set the context here. In terms of this whole area, do you agree that government spending is driving up inflation?

[George Chahal, Liberal, Calgary Skyview, AB]

I have a point of order, Mr. Chair.

This is out of order. Mr. Morneau is not here to answer questions on the budget. He's here to answer questions on McKinsey and the CIB, as that's what our study is about.