Ottawa shuts PPP Canada ahead of infrastructure bank launch

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The Liberal government is shutting down PPP Canada, a Conservative-created Crown corporation that encouraged public-private partnerships in infrastructure.

The move comes as the government prepares to officially launch the Canada Infrastructure Bank, a $35-billion entity that will perform a similar function but with a much larger budget and mandate.

The government is also facing questions this week over its decision to seek parliamentary approval through a budget bill to join another new infrastructure bank, the China-led Asian Infrastructure Investment Bank (AIIB).

Conservative and NDP MPs urged the speaker of House of Commons Friday to divide the government's latest budget bill in order to allow for more scrutiny of the government's plan to provide up to $480-million to the nearly two-year-old AIIB. The Speaker said the request would be considered.

International Development Minister Marie-Claude Bibeau defended Canada's decision to join the AIIB, saying it will allow Canada's development dollars to go further by attracting private capital.

"To us, it's the best tool to use Canadian money to leverage more money and build infrastructure that is necessary to improve the quality of life for the poorest and most vulnerable," she said in an interview Friday.

Conservative finance critic Pierre Poilievre said his party does not support Canadian tax dollars going to private infrastructure projects in other countries. The AIIB has already approved some specific projects, including the Trans-Anatolian pipeline project to transport natural gas from the Caspian Sea in Azerbaijan across Turkey to Europe.

"The Liberal government wants to use Canadian tax dollars to build pipelines in Asia, while blocking private-sector pipelines that would create jobs at home. It's the worst-possible policy," he said. "This is a highly complex, secretive international bank. Taxpayers deserve a Parliament that debates all of its details before the money goes out the door. They tried to sneak the expenditure into the back of a massive omnibus bill so that no one would even notice it. That kind of secrecy suggests that the government has something to hide."

As for the closing of PPP Canada, Mr. Poilievre said the Liberals are moving to a new model with the Canada Infrastructure Bank that will expose taxpayers to too much risk in the event that a project fails financially.

PPP Canada was first announced in the Conservatives' 2008 budget as an effort to encourage provincial and municipal governments to include private-sector partners in infrastructure projects. The Crown corporation spent more than $1.3-billion on 25 projects across the country.

Earlier this year the Liberal government received legislative authority to launch the new Canada Infrastructure Bank, which will provide advice to governments as well as loans and direct funding to infrastructure projects delivered as public-private partnerships.The bank would primarily act as a minority partner in projects led by the private sector, in contrast to traditional public-private partnerships (P3s) led by governments, where the private sector generally plays a smaller role.

The government faced criticism earlier this year for including the legislation creating the Canada Infrastructure Bank as part of a large budget bill, a practice opposition MPs say the government is repeating with the AIIB.

One of the reasons cited by the government Friday for shutting down PPP Canada is that it is no longer required because many provinces now have similar agencies – such as Infrastructure Ontario and Partnerships BC – that help structure traditional P3 projects.

NDP infrastructure critic Matthew Dubé said his party has always questioned the public benefit of funding infrastructure through P3 models such as those advocated by PPP Canada.

"We've always had our issues with that, but it's going to be replaced by an even larger larger privatization scheme – which is the infrastructure bank – which is something that we're obviously still concerned about," he said.

Documents tabled in Parliament this week show the Canada Infrastructure Bank will launch this year with a small Toronto-based staff of up to 50 employees before the end of March, 2018. The plan is for the bank to eventually reach a size of 100 employees.

More details are expected to come next week when the bank's chair, Janice Fukakusa and Infrastructure Minister Amarjeet Sohi address a national conference on public-private partnerships in Toronto.