The Canada Infrastructure Bank is unlikely to spend even half its $35-billion budget over its 11-year mandate despite government pledges to get the cash flowing to new green projects, warns Parliamentary Budget Officer Yves Giroux in a new report.
The independent spending watchdog reached his conclusion by reviewing the bank’s latest announcements and comparing its track record with those of similar bodies, such as Infrastructure Ontario and the Caisse de dépôt et placement du Québec.
The federal government created the bank in 2017 with a mandate to provide funding that encourages large institutional investors to partner with governments in building infrastructure projects that generate revenue and are in the public interest.
After widespread criticism of the bank’s initial lack of progress, the government approved leadership changes last year and a new “growth plan” to spend at least $10-billion over three years, primarily on environmental projects.
Wednesday’s PBO report says the new plan will not resolve concerns that money is not finding its way to specific projects.
“Accounting for these new, less-restrictive investment criteria, PBO estimates that CIB is still unlikely to disburse $35-billion within its 11-year mandate. PBO projects that CIB is on track to disburse roughly $16-billion in infrastructure investments by 2027-28, an estimated $19-billion shortfall,” the report states.
In an interview with The Globe and Mail Wednesday, Canada Infrastructure Bank chief executive officer Ehren Cory noted that the bank has made several significant announcements in recent months and that more are coming in the near future.
“We’re on a very different trajectory of investment, and the last several months show it. And I think the proof’s in the pudding,” he said. “I joined six months ago, and we are at a different pace of activity.”
Mr. Cory said he believes the bank will deliver on the timeline of having $10-billion worth of investment commitments in place at the three-year mark of the growth plan, adding that the bank’s longer-term goals will also be achieved. He noted that many of the projects under review are multibillion-dollar efforts that take years to finalize.
Earlier this month, the bank added as much as $300-million to its $1.3-billion pledge toward Montreal’s REM light-rail project. It also announced a long-term loan of $655-million for a new transmission line across Lake Erie.
In the coming months, Mr. Cory said, the bank will be announcing its first deal for zero-emission buses, one or two energy retrofit projects, support for a clean-power project and possibly another plan to expand access to broadband internet.
NDP infrastructure critic Taylor Bachrach said the government and CIB officials have been promising for years that improvements are just around the corner.
“This PBO report confirms our long-held concerns with the infrastructure bank. This is a Liberal experiment that just isn’t working, and yet they continue to double down at a time when Canada needs job creation more than ever and communities have important projects that need to be built,” he said.
Mr. Bachrach said the NDP has long opposed the bank’s focus on attracting private investment. His party’s view is that it would be better to fund projects in the traditional way, based on requests from provinces and municipalities.
“There are proven ways, and the longer that we allow this government to struggle with their experiment, the longer communities are left without the projects that improve life for Canadians,” he said.
Conservative MP and infrastructure critic Andrew Scheer said the PBO report shows the bank is “a lemon of an institution” and called on the government to scrap it. ”It is time for Justin Trudeau to stop worrying about his wealthy investment banker friends and start working for everyday Canadians,” Mr. Scheer said in a statement.
Infrastructure Minister Catherine McKenna has said the bank can play an important role in promoting Canada’s economic recovery after the pandemic. She defended the bank in a statement Wednesday.
“There has been very positive progress over the past year at the Canada Infrastructure Bank,” she said. “We brought in new leadership, established a new mandate, and they’re implementing their new growth plan.”
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