The Canada Infrastructure Bank paid $3.8-million in termination benefits as part of a major shakeup of the organization’s senior management, documents show.
Citing privacy laws, the bank says it cannot provide further details on the payment other than to say the money went to more than one person. The timing of the payments overlap with the February departure of chief executive Pierre Lavallée, who was one of the federal government’s highest-paid public servants, and last December’s departure of the bank’s head of project development, François Lecavalier.
The termination benefit amounts are revealed in the Crown corporation’s annual report for its fiscal year ended March 31, 2020. The document was made public after it was tabled in the House of Commons last week.
The Liberal government publicly announced on April 3 that the bank’s two most senior leaders – board chair Janice Fukakusa and Mr. Lavallée – would be departing the organization. Ms. Fukakusa stepped down as of April 15, which was beyond the period covered by the annual report.
The leadership shakeup followed criticism that the bank had been slow to identify and fund projects. Opposition parties are calling for investigations into the activities of the bank and the Liberals' infrastructure spending in general.
The Liberal government created the infrastructure bank in 2017 with a $35-billion budget and a mandate to support projects that generate revenue, are in the public interest and will attract large institutional investors such as global pension funds to invest in them.
Ms. Fukakusa was named the bank’s first chair in July, 2017, and Mr. Lavallée was announced as the organization’s first CEO in May, 2018.
The Globe reported in July, 2019, that the bank’s head of investments, Nicholas Hann, had resigned after just 10 months on the job. As Mr. Hann’s departure was described as a resignation, he likely would not have received a termination benefit.
The bank’s annual report lists total spending for the compensation of key management staff, who it defines as officers who have authority for planning, directing and controlling the bank’s activities. The category includes members of the board of directors.
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For the fiscal year ended March 31, the bank spent $3.8-million on “termination benefits” in this category, compared with $3.4-million on salaries and short-term employee benefits for senior managers.
Bank spokesperson Felix Corriveau said privacy obligations prevent the bank from disclosing compensation paid to specific individuals. He declined to say how many individuals received a portion of the $3.8-million, but said it was more than one person.
Mr. Corriveau said the bank’s compensation levels, including the terms of termination pay, are based on the advice of external consultants. The bank says it aims to offer compensation packages that are benchmarked at the midpoint of comparable positions in the public and private sectors.
“The CIB’s disclosure practices in the annual report are intended to provide transparency on the activities of the CIB, while respecting privacy obligations as required under the Privacy Act in respect of employees,” he said in an e-mail.
As part of the April shakeup, the government appointed former Caisse de dépôt et placement du Québec CEO Michael Sabia as board chair. The bank’s CEO position remains vacant, but an announcement is expected shortly. The Globe reported this month that current Infrastructure Ontario CEO Ehren Cory is expected to be named to the post.
Earlier this month, Prime Minister Justin Trudeau, Infrastructure Minister Catherine McKenna and Mr. Sabia held a joint news conference to announce how the bank will allocate $10-billion of its existing budget over the next two to three years.
The priorities include a clear environmental focus with pledges to support building retrofits and electric buses for municipalities. The announcement also mentioned agricultural irrigation in Western Canada. Last week, the bank announced specific funding in that area, pledging $407-million to improve irrigation in Alberta.
Opposition parties have called for the bank to be scrapped. The House of Commons passed a Conservative motion in January asking for the Auditor-General to review the Liberal infrastructure plan within a year.
Conservative MP Andrew Scheer criticized the fact that the $3.8-million in payments to people who no longer work at the bank exceeded the total amount of compensation for all other senior managers.
“It’s no wonder that this bank has completed zero projects,” he said.
Bloc Québécois MP Gabriel Ste-Marie said the government should be more transparent about the cost of the bank’s salaries and bonuses.
“The Canada Infrastructure Bank has not proven its usefulness, but it has revealed today its real cost,” he said in French.
NDP MP Taylor Bachrach said the federal government’s efforts to fix the bank are a waste of time. He filed a request at the House of Commons transport, infrastructure and communities committee on Tuesday to launch a review of the bank’s activities.
“The bottom line is that this model is not building the infrastructure that Canadians need,” Mr. Bachrach said.
The Globe reported last year that François-Philippe Champagne, then the minister of infrastructure, intervened in a decision by the bank’s board regarding performance pay for then-CEO Mr. Lavallée.
Documents obtained through Access to Information revealed that rather than accepting the board’s recommendations, the minister applied his own “broader criteria” to assess the bank CEO’s performance.
The government declined to say how this intervention affected Mr. Lavallée’s performance pay, stating it was a matter of cabinet confidentiality.
The federal government set the salary range of the CEO position at $510,000 to $600,000, and approved a regime of performance bonuses that would bring the maximum compensation to $1.5-million in the first year and up to $2.8-million by the fifth year. Unlike some provincial governments, the federal government does not release a sunshine list that discloses specific amounts paid to senior public servants.
The chair of the bank’s board is paid $100,000 a year.
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