The Canada Infrastructure Bank is heading into its first full year of operation without a permanent CEO, but the bank's chair is hoping the $35-billion entity will be in a position to start approving projects by the end of 2018.
The federal government recently announced that the bank is officially up and running, but there is still much to be done in terms of hiring and setting up the Toronto headquarters.
"We are a startup," the bank's chair and acting chief executive Janice Fukakusa said in an interview with The Globe and Mail.
The immediate focus is on practical matters such as establishing a payroll system, hiring expert analysts and approving a permanent CEO.
"We're hopeful that by the end of 2018, we'll have looked at some projects. Infrastructure projects are very long term. And it takes quite a long time to look at them, so we are hoping that we will have gotten some to the stage where we are going to be making decisions around investing," she said, noting that it is difficult to set firm timelines until the CEO and other senior positions are filled. "We don't know the cadence and the timing until we build our capabilities, so that's really what we're focused on."
The federal Liberals first promised to create a national infrastructure bank during the 2015 election. Finance Minister Bill Morneau ran into controversy throughout the first half of 2017 by including the Canada Infrastructure Bank Act as part of a large budget bill, which critics said limited the potential for debate on a major new initiative. The Senate banking committee opted to hold several days of special hearings on the topic and some senators pushed to have the bank provisions removed from the budget bill. That effort failed by a single vote in June.
The goal of the bank is to provide minority funding or loans to large revenue-generating projects led by the private sector that might not otherwise go ahead. The government has said that $15-billion of the bank's funds will be divided evenly between public transit, trade and transportation corridors and green infrastructure projects, such as safe water systems and renewable-power generation.
"It's about leveraging the infrastructure bank investment to attract more capital," Ms. Fukakusa said. The challenge for the bank is to convince large institutional investors – such as pension funds – that are already investing billions around the world in infrastructure to divert more of that capital to Canadian projects.
The government announced 10 board members on Nov. 16. A month later, the government announced that one of those board members, Bruno Guilmette, would be taking a short-term leave from the board in order to act as interim chief investment officer. Mr. Guilmette is a former senior vice-president of infrastructure at PSP Investments, a $139-billion fund that manages federal government pension plans. He has also managed infrastructure investments for Quebec's government pension fund.
"Part of what Bruno is going to be doing is looking at staffing … and getting analytical individuals who can support the investors and investor decisions," Ms. Fukakusa said. Mr. Guilmette has agreed to the interim CIO position until May, at which point it is expected that a CEO will have been selected. The new board members are scheduled to meet in early January to discuss the CEO position.
The fact the bank may not be in a position to approve projects until late 2018 at the earliest is a concern to one advocate for the bank. Independent Senator Doug Black, who now chairs the Senate banking committee, supports the bank and argued against his fellow senators who were pushing for more study and delay.
"I get process. I'm a lawyer, but at some point in time, rubber needs to hit the road," he said. "It's time to start reviewing projects. I get that there's not a CEO there, but they can hire consultants. They have a very skillful board. They can set up an investment committee. Work should be starting."
Matti Siemiatycki, an associate professor of geography and planning at the University of Toronto and Canada research chair in infrastructure and finance, said it is important that the bank establishes itself as a centre of expertise.
Dr. Siemiatycki said he hopes the bank will ensure that major decisions are based on sound research, rather than political considerations.
"We need to move quickly, but also diligently and make sure we're really doing the evidence-based assessments to make sure we're picking the right projects," he said. "I think 2018 is going to be an important year for this institution to really see how it finds its feet and where it sits in the constellation of a whole host of ministries, agencies, organizations, different levels of government who are all investing heavily in infrastructure."