Prime Minister Justin Trudeau addressed a massive gathering of municipal leaders Friday, urging them to view the proposed Canada Infrastructure Bank as a positive, voluntary option that's in addition to the billions in traditional grants Ottawa is promising for cities.
Mr. Trudeau spoke to the annual conference of the Federation of Canadian Municipalities in Ottawa, where more than 3,400 people were registered to attend.
The FCM is a friendly audience for Mr. Trudeau, given that the federal Liberals have promised to spend $187-billion on infrastructure over 12 years, more than doubling the government's existing spending plans.
As part of Ottawa's plan, the government is proposing a $35-billion Canada Infrastructure Bank. It would aim to support new large projects mostly owned and run by the private sector in a way that would have a much larger private role than the traditional public/private partnerships that have become common across the country.
"Once operational, the bank will be yet another tool to move new projects forward, projects that will create more jobs, make our communities more inclusive and grow the economy," Mr. Trudeau said. "But I want to be very clear that this will be an optional tool. Over 90 per cent of our long-term plan will be delivered through grants, but the bank is a way for us to leverage private capital and help our dollars go even further."
Legislation to create the bank is included as part of Bill C-44, the government's omnibus budget bill. It is currently being debated in the House of Commons. However, some Senate committees have held a prestudy of the bill while it is still before the House. Some senators say they are privately debating whether to amend the legislation in response to concerns that have been raised.
Quebec's national assembly passed a unanimous motion this week calling for amendments to protect provincial jurisdiction to regulate infrastructure projects. The Ontario Teachers' Pension Plan Board has said it would support amendments that strengthen the independence of board executives from political interference. Concerns have also been raised about the transparency of the bank and how some of its work will be exempt from the Access to Information Act.
In addition to discussing the infrastructure bank, Mr. Trudeau also promoted a federal smart-cities challenge that will award a top prize of $50-million to a city that proposes an innovative project. He also received applause for repeating the federal government's position that it is willing to fund up to 40 per cent of the cost of major new transit projects. The FCM is urging the provinces to also cover 40 per cent of the cost, with municipalities covering the remaining 20 per cent.
Provinces have not yet agreed to that and Ottawa must reach deals with each province before moving ahead with the majority of its promised infrastructure grants. The issue of provincial funding has become particularly heated in Toronto, where mayor John Tory has criticized the Ontario Liberal government for not committing to the 40-per-cent target.
Some big-city mayors in attendance Friday for Mr. Trudeau's speech say they are open to using the infrastructure bank.
Winnipeg Mayor Brian Bowman said he credits a public/private partnership for reducing the cost of his city's bus rapid-transit expansion plans and would support more private partnerships through the bank.
"We shouldn't be afraid to be innovative in trying new models that may work in Canadian cities," he said. "We'll very much be at the table, doing our best to shape and leverage the infrastructure bank."
Calgary Mayor Naheed Nenshi, who was disappointed that the bank will be located in Toronto rather than Calgary, said it is not yet clear to him how bank projects will be different from the public/private partnerships – known as P3s – that already exist.
Mr. Nenshi said there is tremendous potential if the bank can find a way of attracting the trillions of dollars of private capital, primarily in the form of global pension funds, that are looking for investment opportunities.
"I'm still hopeful that the infrastructure bank will be that creative and innovative, but in the back of my head, I feel like they're just going to launch a bunch of traditional P3 projects," he said.