Transport Committee on Oct. 4th, 2023

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Seeback.

Thank you, Minister.

Next we have Ms. Koutrakis.

Ms. Koutrakis, you have the floor for five minutes.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you, Minister, for joining us at this late TRAN committee. I'm sure you've had a pretty busy day, as we all do on Wednesdays.

I'd like to talk a little about the Canada Infrastructure Bank and how important it is to leverage the dollars, such as those through the CIB and other government programs, to accelerate infrastructure projects.

[Sean Fraser, Liberal, Central Nova, NS]

One of the things that we have to come to grips with is that we have an infrastructure deficit across Canada. Despite making record investments as a federal government over the past eight years, there is more to do. This applies equally to housing and to infrastructure. We should be looking at new ways to pull capital into the Canadian economy that is going to achieve the social and economic outcomes we want to see.

The Canada Infrastructure Bank is a very good idea. In fact, different parts of the world have advanced similar kinds of ideas, some of which are playing copycat, so to speak, after the development of the Canada Infrastructure Bank.

The strength that the bank has, in my view, is that it's able to identify revenue-generating projects that provide some public good. It's able to tap into different sources of investment to fund those projects, which then create revenue that allows the proponent to pay back to the bank over time.

When we start with an initial amount of capital in the bank, this allows it to become self-sustaining. When they earn revenue with interest on loans that they make on commercial terms, they're able to protect the initial investment that the federal government makes, but in perpetuity continue to fund infrastructure that would not have been built but for the creation of the bank.

If we want to pull in big investors, pension funds and private developments that otherwise would not come, we need to create incentives that allow them to do that. When the bank can put competitive financing terms on the table, often for projects that could not get financing through conventional means, then we can actually see projects go ahead that otherwise would not have come to fruition in Canada.

[Annie Koutrakis, Liberal, Vimy, QC]

Do you have any examples, Minister, that you could speak to?

[Sean Fraser, Liberal, Central Nova, NS]

Yes, there are a number of projects.

I'd suggest that if you want technical explanations of individual projects, we're going to have the department stick around for the second half. They can really dig in as granularly as you'd like.

The kinds of projects that are starting to go ahead now include water and waste water, which we've discussed as having the potential to unlock housing. They also include small modular reactors, which could be part of the solution to generate non-emitting energy that's going to help power the Canadian economy and potentially create export opportunities down the road. The technology is not here today on a commercial basis, but making these big investments could actually create the opportunity to develop an industry that doesn't exist at scale.

The electrification of transit is a tremendous opportunity. We have connectivity, with a major fibre project in Manitoba that is going ahead. We have energy retrofits, as was discussed earlier. There's potential for the bank to deal with projects that improve energy transmission across provincial boundaries in my region of Canada, with projects like the Atlantic Loop or components of it.

There's no shortage of these kinds of projects. I actually would value the perspective of committee members as to what other kinds of projects we might be able to use the bank to fund, including those, for example, that might unlock a potential for more housing to grow the impact of the measures that Mr. Seeback has drawn attention to during his line of questioning.

[Annie Koutrakis, Liberal, Vimy, QC]

Do I have one minute left?

[The Chair, Liberal, Peter Schiefke]

Yes, you have one minute left.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you.

In your opening remarks, and throughout your testimony, you've touched upon public transit. I'd like to know, in your opinion, what role you see the federal government playing when it comes to public transit, keeping in mind that there is always a jurisdictional challenge when it comes to public transit.

[Sean Fraser, Liberal, Central Nova, NS]

Communities are going to know their priorities best when it comes to what kind of transit system they need. Local governments are very good at understanding where the bus station goes, what kind of mode of transportation people need and the appropriate place for an active transportation lane to allow people to move through their community in a sustainable way that promotes healthy living as well.

The role of the federal government is not going to be to go in and start dictating where projects go; it's going to be to fund good ideas. If we actually come up with programs that communities can apply to and we can partner with provincial governments to leverage additional investments, we can grow the overall ability of people to move throughout their communities, which will help promote healthy, livable communities.

The short answer to your question is that the role of the federal government is to fund good projects. My sense is that on an individual level, as local representatives, we can work to understand what kinds of projects will work for our communities, but as a government we should fund good projects when it comes to transit.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister.

Thank you, Ms. Koutrakis.

Mr. Barsalou-Duval, you have the floor. You have two and a half minutes.

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

Thank you, Mr. Chair.

Minister, I had the opportunity to ask your predecessors, Ms. McKenna and Mr. LeBlanc, about a fund that might have helped a riding such as mine, which was planning a bicycle path to link the Boucherville islands on Montreal's south shore. We could have used the Active Transportation Fund for that project, which was so important to the City of Boucherville. Just recently, however, I looked into the funding allocated under the Active Transportation Fund and discovered that, with a budget of $400 million, 453 projects received federal funding. Quebec received $1.7 million. That is just $1.7 million out of $400 million, roughly 0.4% of the total.

Can you explain why Quebec received so little under the Active Transportation Fund?

[Sean Fraser, Liberal, Central Nova, NS]

Thanks for the question.

I know it was an extremely competitive fund, but I'm going to have to dig into the details just to make sure I have the numbers correct. The fund took applications on a competitive basis and made different kinds of awards. Until you phrased it in your question, I was not aware of the particular percentage. If you'd like to send a follow-up question, I would happily offer a more fulsome response.

Perhaps I could signal to officials in the room that we could provide clarity during the second half of the meeting. I think that would be appropriate.

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

I have to say that I find it absolutely scandalous that we received just $1.7 million out of $400 million. On numerous occasions, I asked your predecessors whether a portion was set aside for Quebec since there was no agreement with Quebec for the awarding of that funding.

Your predecessors never gave me an answer on that. Even when the deadline was reached for funding applications, there was still no agreement with Quebec. Yet it looks as though you decided to award funding to the other provinces and leave Quebec out. As a result, we did not receive our share. This is unfortunate.

I hope I have misunderstood and that you will tell me that in the end there is some money hidden away for Quebec. If not, this is just scandalous, sir.

[The Chair, Liberal, Peter Schiefke]

Unfortunately, we have run out of time for an answer.

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]

Thanks, Mr. Chair.

I'd love to fit in two questions in my 2.5 minutes, so I'll go as quickly as I can.

I'd love your thoughts on how your government plans to address the issue of construction cost escalations for projects that see a long time period between application and award.

[Sean Fraser, Liberal, Central Nova, NS]

The way we typically do our funding envelopes is that we can sometimes be flexible on a project-by-project basis with the proponent, but we typically have a ceiling, given the spending authorities Parliament gives us. To the extent that a jurisdiction would request specific changes to a project we make a funding award to, that would eat away at their ability to fund other projects. We don't have the ability, without Parliament authorizing additional spending, to simply say yes to every project that has experienced cost increases, as is happening across Canada right now.

There are some projects we are working through to try to make adjustments where possible, but there is an impact given that there is no increase in the ceiling of the fund.

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

Thank you.

The City of Terrace has applied to the housing accelerator fund to enable the construction of 180 units of housing. On a national scale, that might not seem like a huge number, but for a community of 12,000 people, that's a significant impact on the housing issue in that community.

At a population of 12,000, they fall just over the threshold between the small, rural community stream and the large, urban community stream, so that puts them in the same funding stream as the city of Vancouver, the city of Winnipeg and the city of Toronto. They're concerned that smaller communities in that larger stream are going to be left out. I am wondering what approach your government is going to take to ensure equity between difference sizes of communities within that very large range of community sizes.

[Sean Fraser, Liberal, Central Nova, NS]

This question is everything to me. As a local MP, I live in a community that has just shy of 10,000 people. I represent other communities that have just over 10,000 people, depending on how you define “community”. I want to personally engage, to the extent that I can, to find the best applications that are going to build the most homes and provide the greatest value for money. Communities that are just over the threshold that puts them in a new category will still be eligible and will be given full consideration.

There are some very large cities that have been identified as growth leaders, which we are going to be addressing first. Some of them have been announced already. However, those that are not among the growth leaders, which have been experiencing significant population gains in recent years, but still have a population large enough that they fall into the stream you mentioned will absolutely be eligible and will be given fair consideration.

My constituents would not forgive me if the case were otherwise.

[The Chair, Liberal, Peter Schiefke]

Thank you, Minister.

Thank you, Mr. Bachrach.

Next we have Dr. Lewis.

Dr. Lewis, the floor is yours once again. You have five minutes.

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

Minister, the Canadian Home Builders' Association appeared at this committee recently for a study on adapting infrastructure and resilient infrastructure. Several witnesses called for the affordability principle to be a core principle in the national building code.

Your government proposes some changes to the national building code under its emissions reduction plan that have been criticized by home builders as potentially increasing the cost of housing by an average of 8%.

Minister, I'm assuming that your department has done its analysis of the proposed regulations. Can you guarantee Canadians today that the emissions reduction plan won't raise the cost of housing for them?

[Sean Fraser, Liberal, Central Nova, NS]

One thing that I think is fair to acknowledge is that it's cheaper to build a home that will result in more pollution. It's also cheaper to build a home that's dangerous to live in. There are certain minimum standards that I think we need to insist upon if we're dealing with modern buildings.

I can't live with myself if I am going to adopt policies that are going to result predictably in greater risks of the consequences of climate change impacting my community. If we can ensure, when we advance programs that are going to build new homes, that we're building homes that won't make the climate crisis worse and won't endanger families, for example, by ensuring that we have a building code that is up to snuff, then I think it's incumbent upon all of us to do the responsible thing and build homes at a scale that will help achieve the supply to fill the gap but also protect us against the consequences of climate change.

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

Minister, that is a fair answer, that it will cost more to build these types of homes. That's what this regulation, the emissions reduction plan, will essentially do, so the conclusion of the Home Builders' Association was not incorrect, based on your evidence.

I'm going to move on.

In June, your department tabled a five-year review of the CIB, as required by legislation. Your ministry's five-year review of the $35-billion Infrastructure Bank read essentially like a brochure, a pat on the back for what many people have said is a failed bank.

I submitted an Order Paper question on this review, and I received this document, which was full of blanks, no answers, just completely blank columns.

I asked your department through the Order Paper question for information specific to the submissions that stakeholders made. As I said, I got back 40 pages of just blank, empty columns. I find this lack of transparency very astounding, Minister. I am seeking from you today a commitment that, moving forward, there will be a spirit of transparency in providing this committee with the specific submissions made by the stakeholders that informed your review of the Canada Infrastructure Bank.

Can I get that commitment today, Minister?

[Sean Fraser, Liberal, Central Nova, NS]

I want to approach all things in the spirit of transparency. To the extent I can bring that spirit to the operations of the bank, I would like to.

Just as a further offer, if you want to dig in, we will have officials here during the second half of this meeting who know the bank inside and out. It's hard to comment specifically on the document. I'm not sure which document you're referring to or why there may have been blanks. Whether they were zero values or redactions, I'm not sure. But to the extent we can approach this with the spirit of transparency, I think that's good for all of us.

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

How many minutes do I have?

[The Chair, Liberal, Peter Schiefke]

You have one minute and 20 seconds, Dr. Lewis.