Evidence of meeting #80 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 communities.
A video is available from Parliament.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
No, I'm joking.
I want to go back to the questions my colleague asked about the retrofit of the Fairmont Royal York. Obviously, the mandate for the Infrastructure Bank allows for a project like this, which is a $17-billion equity fund getting a super-discounted interest rate for a project. This project is inside the mandate that was given by the government to the Infrastructure Bank. Is that a fair assessment?
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
As I mentioned before, the Infrastructure Bank, through the growth plan, was given a mandate to do retrofits and look at the built environment to reduce GHGs and look at different types of investments to be able to allow that to happen.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
Okay.
Was there ever a policy rationale put forward within the department when they were determining this mandate that said it's a great idea that a $17-billion property equity firm should get below prime interest rates to do a renovation that they could already afford to do themselves? Did that policy rationale ever get looked at when they were setting the mandate for the bank?
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
That wouldn't be a policy. That's an investment decision, and that's under the board of directors' accountability and stewardship, and independent of the government.
That's an investment decision for a particular project, versus a policy decision, which is looking at how we can reduce GHGs in the built environment by retrofitting buildings. We know, from both the private sector and the public sector, that we have a huge challenge in that regard and it can't all be done on the public purse, so looking at alternative financing mechanisms is a way to do that.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
But a $17-billion hedge fund could probably afford a renovation on its own, so I'm trying to understand why the mandate the government gave to the bank was so broad as to allow highly profitable equity firms to access these low-interest loans. Is there an answer to that? There might not be.
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
I've already answered the question from a policy perspective. In terms of the investment decisions themselves, what I can do is ask the Canada Infrastructure Bank to provide the clerk and the committee with a rationale for why they chose that investment.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
That would be great.
How does this particular funding project address the infrastructure deficit we have?
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
As I mentioned, the built environment has significant GHGs, and from a climate perspective we do need to reduce our GHGs in the country, so we are looking at alternative financing and a way of financing that supports both private and public buildings in reducing their GHGs.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
Was there any internal department analysis on how many homes the GST rebate would build?
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
The GST and tax are under the Department of Finance, but the minister mentioned the number of homes, when you were having a discussion with him, as being 200,000 to 300,000 over a decade. The analysis would be for Finance Canada because they are the department that does all of the tax changes for the federal government.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
What about for the housing accelerator fund? Was there internal analysis on how many houses the housing accelerator fund would produce, and, if so, would you table or produce that analysis for the committee?
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
That analysis would be under the Canada Mortgage and Housing Corporation, which is the proponent for that particular program. Certainly I can ask for CMHC to provide more information on the 100,000 homes under that program.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
That would be great. Thank you very much.
Would you know why the bank is choosing to give money to a large hedge fund to retrofit a luxury hotel as opposed to investing in homes for people who have financial challenges, in order to try to reduce their carbon emissions?
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
With regard to the investment decision on that particular project you mentioned, we will ask the bank for a follow-up. The bank itself does not invest in homes; it is the CMHC that invests in homes.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Seeback.
Thank you, Ms. Gillis.
We'll turn it over to Mr. Badawey for one last question.
Liberal
Vance Badawey Liberal Niagara Centre, ON
Thank you, Mr. Chair.
I just want to give Ms. Gillis the opportunity to actually clarify a lot of the misconceptions the opposition might have in terms of the question just now with respect to housing versus investments. Earlier, we heard some confusion about some of the programs, how they operate and what their mandates are, etc. If you want to reach back and provide any clarifications, I'll give you that opportunity with my time right now.
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
Thank you very much for the question.
When we look at the investments at Infrastructure Canada and the importance of those investments, as you said before, to make communities more vibrant and to make sure that the tax base of municipalities is not putting too much pressure on the bills of Canadians, our programs have been able to make a huge difference. Since 2015, there have been 79 billion dollars' worth of investments in infrastructure that makes a difference in communities every day, in terms of water, sewer, transportation, renewable energy and a number of different active transportation projects that are important for Canadians.
When we look at the infrastructure challenges and the investment needs across the country, we do need to look at different types of tools. The Canada Infrastructure Bank is another type of tool that relies not on grants and contributions but on financing, which is returned to the organization so it can make further investments.
It's good to have a range of different levers at our disposal to deal with the challenges the country has with respect to important infrastructure investments.
Liberal
Vance Badawey Liberal Niagara Centre, ON
With that said, the Infrastructure Bank, frankly, is money that comes back. It's not money that's coming from the taxpayers; it's simply encouraging development, leveraging dollars that would otherwise not be available, and taking care of a lot of the infrastructure for housing and the other projects that apply for it to accelerate those projects.
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
That's correct.
Out of the 48 projects on which they've come to a financial close, they have financing in place of almost $10 billion, but 28 billion dollars' worth of investments are being made.
Liberal
Vance Badawey Liberal Niagara Centre, ON
And it's up to them to actually apply for those projects; it's not up to the government.
Deputy Minister, Infrastructure and Communities, Office of Infrastructure of Canada
It's not up to the government.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Badawey.
I would like to thank the deputy minister and the assistant deputy minister for their testimony this evening and for staying so late with us.
With that, this meeting is adjourned.