Starting to see benefits on those long and short-term projects: Canada Infrastructure Bank CEO
Canada’s federal budget watchdog is warning Ottawa’s infrastructure funding ambitions will likely fall far short of expectations.
In a report released Wednesday, the Parliamentary Budget Officer (PBO) said the Canada Infrastructure Bank (CIB) is unlikely to meet its goal of spending $35 billion on new infrastructure within its 11-year mandate, forecasting a shortfall of $19 billion over that timeframe.
In a release, PBO Yves Giroux said the CIB appears to be lagging the outlays of similar organizations pursuing private-public partnerships.
“CIB has been spending much slower than planned, but funding delays are common for public-private infrastructure investment projects,” Giroux said. “Based on our analysis of comparable organizations, the CIB’s spending is progressing somewhat below the average rate – more slowly than Infrastructure Ontario and the Caisse de dépôt et placement, but more quickly than PPP Canada.”
The CIB was the cornerstone of the federal Liberal government’s $187.8-billion Investing in Canada plan unveiled in the 2017 budget. As part of the organization’s mandate, it was to seek out a so-called “multiplier effect” by attracting private-sector dollars to the projects to boost the overall pool of capital available for new infrastructure.
In response to the PBO report, Infrastructure and Communities Minister Catherine McKenna defended the path plotted by the infrastructure bank and said she expected it to fulfill the $35-billion target. In a statement to BNN Bloomberg, McKenna highlighted recent developments like the appointment of Ehren Cory as chief executive officer as steps toward fulfilling the bank’s mandate.
“There has been very positive progress over the past year at the Canada Infrastructure Bank -- we brought in new leadership, established a new mandate, and they're implementing their new growth plan and moving forward with projects,” McKenna said.
“I am pleased to see the progress the CIB has made over the last six months under new leadership with a new growth plan. I have been clear that I expect them to deliver on their mandate to invest in more projects in their priority areas by the end of the first quarter and beyond, and their trajectory shows they can achieve $35 billion in investments within the 2027-28 timeframe.”
Thus far, the CIB has publicly announced participation in 17 projects, and of those has committed $5.1 billion worth of capital investment to a total of seven projects, including the expansion of Ontario’s GO Transit network. That $5.1 billion accounts for about 15 per cent of the CIB’s total spending goal.
Of note, the PBO said 45 per cent of the projects reviewed by the CIB were deemed outside the infrastructure bank’s mandate, ruling them ineligible for funding. The bank can only invest in projects with a partner in the public transit, green infrastructure, trade and transport, broadband, clean power or Indigenous infrastructure sectors.