Transport Committee on Aug. 1st, 2025

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Is it $300 million or less than $300 million?

[Nicolas Jimenez]

There are certain limitations we have based on our procurement process. We simply aren't able to provide competitive and commercial information.

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

However, you—

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Albas and Mr. Jimenez.

I have a quick reminder for all of my colleagues. I know we want to get our questions in, but when we're chiming in while the witness is speaking, it is absolutely impossible for our interpreters to translate, because they don't know whether they're supposed to be interpreting you or the witness. I just want to remind all members that this is something we should do to support our interpreters.

However, your time is up.

Finally today, we have Mr. Kelloway.

Mr. Kelloway, the floor is yours. You have two minutes, sir.

[Mike Kelloway, Liberal, Sydney—Glace Bay, NS]

Thank you, Chair.

To the witness, thank you for being here.

I just have one question, because I have only two minutes.

The Minister of Transport and Internal Trade expressed her concerns about this procurement deal, specifically regarding national security.

I'm wondering if you could tell us what measures are being taken to ensure the security and quality standards of the vessels constructed in a foreign shipyard, particularly one that is obviously based in China.

Thank you.

[Nicolas Jimenez]

We will be using the same standards we do, quite frankly, with any yard. We did a lot of work up front to assess risk, using our own experts as well as experts from outside the company.

As we go through the build process, there are a number of things we do.

One is having an on-site team to manage the process of doing audits, checks and security assessments throughout the build period. We will also have an entity representing Transport Canada through the build process, and another one or two entities working with us throughout, in different stages of the process. There will be anywhere between 30 and 40 people on site at the shipyard throughout the build process to monitor, evaluate and assess whether the ships are being built according to the specs, etc.

When it comes to sensitive technology and other equipment on board, that will be done and overseen by BC Ferries staff.

There are a number of protections and measures we're putting in place to ensure that the ships we receive will be ready to operate on day one.

[Mike Kelloway, Liberal, Sydney—Glace Bay, NS]

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Kelloway.

On behalf of all members of this committee, I want to thank you for your presence here, Mr. Jimenez. We wish you safe travels back to British Columbia.

With that, colleagues, I'm going to suspend once again for two minutes in order to welcome our last group of witnesses for today before we embark on our discussions.

[The Chair, Liberal, Peter Schiefke]

I call this meeting back to order.

Colleagues, we'll now continue with our next panel of witnesses. They are the final witnesses for today.

Allow me to welcome, from the Canada Infrastructure Bank, Mr. Ehren Cory, chief executive officer—welcome to you, sir—and Monsieur Frédéric Duguay, general counsel and corporate secretary.

Welcome.

As you know, we're very short on time today and we have a lot of work to do, so I will immediately turn it over to you for your opening remarks.

You have five minutes, please.

[Ehren Cory, Chief Executive Officer, Canada Infrastructure Bank]

Good afternoon, Mr. Chair and committee members.

Thank you for this invitation to speak to the committee about its study of the investment of the Canada Infrastructure Bank, or the CIB, in new vessels for BC Ferries.

I'm joined by my colleague, Frédéric Duguay, the CIB's general counsel and corporate secretary.

We welcome the opportunity to speak to you today about our loan to BC Ferries. If you would permit me, I'd appreciate the opportunity to give a quick update on our overall progress before diving into the specifics.

The CIB was created to get infrastructure projects unstuck. Through our flexible financing, we can address market and affordability gaps that get in the way of projects moving forward. Since I joined the organization at the end of 2020, we have consistently made 20 to 30 investments—that's $3 billion to $5 billion of CIB money invested—each year. We expect this pace to continue or accelerate.

I'm proud to report that we've now made loans worth $17 billion across 102 projects that have a total capital value of $50 billion. We have projects in every province and territory. Our pipeline of future projects is healthy. Of those projects, 70% are in construction, supporting nearly 235,000 Canadian jobs and other downstream domestic benefits. Seven of these projects are completed. This number will increase rapidly as more projects finish construction and come online.

It's different from a grant. We make loans that are repaid with interest. For several quarters now, we have collected sufficient revenue to cover 100% of the organization's operating costs. We expect this trend to continue, resulting in minimal impact to taxpayers. In short, the CIB is a model that is working and delivering tangible benefits for Canadians, getting greenfield infrastructure built with minimal cost to taxpayers.

Our projects range from our recent investment at the Montreal airport to Canada's largest energy storage facility in Haldimand—Norfolk to a wind turbine and energy storage system in Nunavut to reduce an island community's reliance on diesel. For each project we finance, we look at the public benefits that this infrastructure delivers to Canadians. Growing the economy, decarbonizing key sectors, improving the connectivity of Canadians and closing the indigenous infrastructure gap—these impact measures form the core of our investment decisions.

The CIB's investment in new vessels for BC Ferries is an example of how it's delivering on its mandate.

This organization is faced with aging vessels that provide less reliable service and a growing demand for this critical link.

After an initial small loan to support the purchase of several smaller ships in the spring of 2024, we began our discussions with BC Ferries about the purchase of major vessels in September of last year. At the time, BC Ferries was involved in a global procurement process. The CIB's low-cost loan structure would allow them to accelerate their transition to new, cleaner, efficient and reliable vessels while avoiding higher costs on the residents of B.C. who use them. Without our loan, they faced a series of difficult choices: Increase fares, delay the investments in these new vessels or decrease services. Given the positive outcomes of the project, we provided a loan that was approved by the CIB's board in early March 2025. It is allocated, as you've heard today, in two components, up to $690 million toward vessels and up to $310 million toward local electrification infrastructure.

It's important to note that we had no role in BC Ferries' procurement decisions. As the project proponent, BC Ferries are best placed to decide how to procure the vessels that will help them realize their business objectives and the needs of their users.

I want to be clear. In all the Canada Infrastructure Bank's investments, the project partner is responsible for making procurement decisions based on its business objectives. The CIB doesn't make these decisions. The CIB is the bank. It makes loans that get paid back with interest.

We didn't direct the farmers of Alberta as to how they should source the new irrigation systems that they now use to expand farmland production, nor did we tell the Caisse de dépôt how to source the LRT train system in Montreal, but I'd like to be equally clear: The people who benefit from CIB loans are Canadians. In this case, regardless of where BC Ferries source their vessels, the benefits of our financing go directly to the users of the service by keeping fares more affordable and ensuring that new, reliable and cleaner ships are in service as soon as possible.

What project proponents across the country have told us is that they run competitive global procurement processes that welcome Canadian bidders. In many cases, the Canadian market can supply the goods and materials these infrastructure projects require. Canadian steel, cement and other key inputs are in many of our projects, but at the same time, almost all infrastructure projects in this country are built using global supply chains. Critical components, from solar panels to chips and batteries, are procured from global markets.

Across the country, there is a growing clear refrain: Canada needs to rise to the moment and build infrastructure, and it needs to build it fast.

While we are making solid progress, we also all know that our needs are significant. We need to empower project owners to move quickly to build the infrastructure that will diversify our economy, open trade routes for Canadian goods to get to markets, and more. Equally important, we need to address how we finance this infrastructure, given finite government resources.

These are matters that our project partners, such as BC Ferries, grapple with daily. It's why the Canada Infrastructure Bank was created. We're here to help our partners get their projects unstuck, deliver benefits to their local communities and make their projects affordable for users.

Thank you, and I look forward to the questions.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Cory.

We'll begin our line of questioning today with Dr. Lewis. The floor is yours. You have six minutes, please.

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

Thank you. Good afternoon, Mr. Cory, and thanks for your testimony here today.

We heard about a $1-billion contract that went to a company from the People's Republic of China to build Canadian ships.

How many other CIB investments are being touted as Canadian investments when they're actually being outsourced to foreign nations with lower labour and lower environmental standards than Canada?

[Ehren Cory]

Thank you for the question. It's nice to see you, Dr. Lewis.

I'd like to answer the question in two parts.

First, as I mentioned in my opening remarks, every one of our projects is for the benefit of Canadians, and the infrastructure is partly in Canada. Some 235,000 Canadian workers are working on the 102 projects that we're financing today. These generate clear Canadian benefits. That's one of the beauties of infrastructure, of course. When you build infrastructure, it drives significant local economic benefit in the building. It drives even greater economic benefit in the using, by creating new trade routes and by connecting Canadians. These are the long-term benefits of infrastructure. All of our projects deliver those, as per our mandate.

Many of our projects are also part of global supply chains. As I said, whether it's solar panels or chips, many manufactured goods come from Canadian suppliers, but many come from global markets. In short, it's not the CIB's role to tell our amazing project partners, be they provinces, territories, private companies or regulated entities like BC Ferries, where they should best source their components.

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

Thank you.

Essentially, you're answering the question by stating that you can give $1 billion of Canadian taxpayer-funded money to a company, and then it can outsource those jobs to benefit another country. Is that not contrary to section 6 of your mandate, which is supposed to be to enrich the Canadian economy?

I really want to focus on the timelines also of when you knew that this money was going to a foreign company. I understand that the $1-billion loan with BC Ferries was signed on March 28, 2025. That is the time, in fact, that you knew that the contract was going to China.

Isn't that correct, Mr. Cory?

[Ehren Cory]

Mr. Chair, there were two questions. I'll take them in turn, if I may.

First, I'll just clarify, and it's been an important part of the discussion throughout the day: Our loan is to BC Ferries, clearly. Our contractual relationship is with BC Ferries. However, most importantly, the benefits of our loan also flow through BC Ferries to the users of the service. We are not subsidizing a foreign entity.

The best analogy I can give you is if, Mr. Chair, you were buying a new house and you agreed to buy it for $100, and then I made you a loan, an interest-free loan, and I asked you who got the benefit of the interest-free loan. Was it you or the person selling the house? The answer would be you. The beneficiary is the person receiving the loan. The benefit of our loan goes straight to the riders, the users of the service, by keeping the service more affordable and clean.

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

Yes, but Mr. Cory, Canadian labourers are not being employed in the building of these four ferries. In addition, you know that the first loan payment was disbursed by the CIB in May 2024, and that the CIB made the deal public on June 26, 2025. In fact, the taxpayer money, the $1 billion.... The loan was signed and the money started to flow two months before the CIB even thought that it was fair to tell the public about this contract.

Is that the standard practice of the CIB, to finalize agreements using taxpayer dollars and then disburse payments weeks or months before it discloses them to the Canadian public, whose money it's using?

[Ehren Cory]

I'll just answer the question about timelines in general. As I mentioned in my opening remarks, we started our discussions with BC Ferries last September, and at the time, not surprisingly, as is the case in many of our procurements, we did not know where they would source their materials from.

We have loans, just to give a different example, to many wind producers across this country that haven't yet purchased their wind turbines. Our loan agreement is with the wind producer, and again, it's meant to keep the project more affordable. Therefore, when we started our discussions last September, we were not privy to where they were getting the ferries, nor was it part of our analysis.

To the member's question, in March of last year—we approved the loan on March 5—they still had not made a decision. At the time, we closed loan documents, which was a financial document actually signed on March 28, I believe, or at the end of March. We were informed by BC Ferries that they were down to two finalists, and we knew both of them were China-based, as you heard from Mr. Jimenez earlier, so they informed us of that just at the time. Just to be very clear, that wasn't part of our analysis, and it wasn't part of the decision to make our loan, because our loan is about benefiting BC customers—the 23 million people or so who use the service.

To answer the second part of your question about an announcement, I'll be very clear about this. We take transparency extremely seriously, and if you were to go to our website, you'd see a map that shows every one of our projects across the country. It's true that there was a delay in the announcement of this project, and I would just point the members to the fact that we were in an active writ period at that time, so public announcements by Crowns were restricted; therefore, we weren't able to make an announcement. Once a new government was in place, which was mid-May, we started spooling back up to make a public announcement in June, which was always our plan, and we always do strive to announce as quickly as possible.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Cory, and thank you, Dr. Lewis.

Next, we'll go to Ms. Nguyen.

Ms. Nguyen, the floor is yours. You have six minutes, please.

[Chi Nguyen, Liberal, Spadina—Harbourfront, ON]

Thank you very much, Mr. Chair.

Thank you to our witnesses who are here today to speak to us a little about the CIB program and its capacity.

Mr. Cory, you described this not as a grants program, but as a model that is fundamentally about a loan with interest. Can you tell me about what's working with this and about how we're able to grow the economy and meet other goals while having this loan program in place?

[Ehren Cory]

I think we've talked at previous iterations of this committee about this central idea, which is that we have an infrastructure deficit in this country. Most analysis pegs it at several hundred billion dollars and numbers that are hard to actually wrap your head around. I think if we want to grow our economy, to continue to decarbonize our economy and to grow effectively, then we need to make massive investments in infrastructure. The simple reality is that we can't afford to do all of that the way we have historically done it, and that is on the basis of public taxpayer money only.

The point of a program like the CIB is to stretch taxpayer dollars further by making a loan with concessionary terms, as is the case with this loan. What we're trying to do is make more infrastructure projects happen. Over the life of the loan, when we get paid back the interest over time, we will get back our $1 billion plus the interest compounded over many years. That means that at the end of the loan, there is not a cost to taxpayers. There's a capital cost, if you think of expense versus capital. We're lending $1 billion, but we're getting that money back with interest. The job of the CIB is to make loans that the rest of the market can't, because either they have lower interest rates and/or they take more risk.

Many projects face challenges of cost. The BC Ferries purchase would be a great example. Many projects face challenges of risk. With EV charging networks across this country or with decarbonizing buildings, many of these are very risky. With carbon capture and storage in our oil sands, if we want to clean our energy sources, all of these things come with a lot of market risk. Critical minerals extraction is another.

The CIB might also make a loan where we're taking above-market risk. It's not always about low-cost money; sometimes it's about higher risk. Either way, our job is to make those loans, and across the portfolio of them, to charge enough interest that we cover all of our operating costs and the risk we're taking, because some loans will not pan out perfectly. That's the point of loans; there's some risk of default. When I say, “take risk”, that means some of the risk will come home to roost.

However, over the portfolio, if we charge enough interest, the idea is that this should cost taxpayers nothing, or be minimal, and should launch many projects across the country.

[Chi Nguyen, Liberal, Spadina—Harbourfront, ON]

Thanks very much.

I'm going to follow up with a question about the political moment that we're in now, thinking in terms of what we are building out as we think about strengthening the economy and responding to the upheaval that is happening across the globe.

Could you tell me about how you're future-proofing and thinking about Canadian content going forward, and are there measures or directions, from a policy perspective, that would help you to do that?

[Ehren Cory]

What's really interesting, of course, is that the moment we're in really does feel like the best moment to work in infrastructure, I have to say. I think all of you as committee members have a really important job over the coming years, because we have both a challenge in front of us but also a real opportunity to diversify our trade, to invest in the north in a way we never have before, to invest in the supply chains that are going to power the world, be they energy or critical minerals. We at the CIB take that really seriously and are really excited about it.

To answer your question, some of the things we're thinking about are, for sure, trade routes and corridors. We're having discussions with every port in Canada. We have two loans today with the Prince Rupert Port Authority. You know there are expansion plans, whether it's in Vancouver or Montreal, and we're certainly having discussions on northern gateways like Grays Bay. All of those are meant to open up new markets for Canadian goods.

The second thing is that investments in the north are also, I think, to this moment really about sovereignty and security in the north. You often have a dual purpose. This project, Grays Bay, for example, would be about critical minerals export, about securing trade routes through the Northwest Passage and about providing a new site for Coast Guard and naval use, so dual use infrastructure is really important.

When it comes to Canadian content, I think as policy-makers.... What I hear from infrastructure project owners across the country is an incredible desire to maximize the use of Canadian content. As I said, on the projects we've financed today, the estimates from our partners and from our independent analysis are that over 230,000 Canadian workers will work on those project sites over the life of those projects. That is real economic value. Also, our project partners are telling us that many of their supply chains are truly global in nature, so if you're building a solar farm or if you're building a battery storage facility or broadband in the north, many of those things are sourced in global markets.

I think the challenge that we all face is how we grow Canadian champions in the places that we want to have them. How do we therefore make them winners, not only in Canada, but globally, frankly, and how do we use procurement in Canada to help them springboard? Sorry, this is a long answer, but the best example I'll give you is in the nuclear industry. We have done this before in nuclear, where we used Canadian procurement and built a Canadian supply chain over decades. It doesn't happen overnight. That gave us a foothold to be suppliers to the world. We're doing it again now around small modular reactors, which is an investment that the CIB has made alongside Ontario and the private sector, building new small modular reactors with the idea that we can then be suppliers to other parts of the world.

I think the challenge is going to be picking the spots where we can be leaders, and the CIB will help drive that by getting new stuff built.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Cory, and thank you, Ms. Nguyen.

Mr. Barsalou‑Duval, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Mr. Cory, welcome to the committee. You're becoming a regular.

Up to now, you've made it clear in your statements that the location of the ferry manufacturing was never a concern. In your view, your job was to give BC Ferries a loan to find vessels and leave it at that. You shared this perspective with the committee. This still surprises me. I figure that you represent the Canada Infrastructure Bank and not the China infrastructure bank. You're here to promote Canadian interests, not foreign interests.

My question is the following. When you informed the Minister of Housing and Infrastructure of your plan to fund Chinese‑made vessels, how did he react?

[Ehren Cory]

Thank you for your question.

Just on the first comment, I think it's really.... You have to come back to thinking about what infrastructure is. Infrastructure is a thing that delivers public benefits. It delivers public—and I will answer your question, I promise; I won't waste your time—benefits. We are the Banque de l'infrastructure du Canada. The part of this that is really important is 23 million ferry users between Vancouver Island and Vancouver. That's who we're investing for. That's what we're buying, and it does create lots of economic benefit for Canadians, whether that's in the electrification of construction, most of which will happen on shore, the goods that are traded, the tourism that happens. There are real benefits.