Canada Infrastructure Bank

The Canada Infrastructure Bank (French: Banque de l'infrastructure du Canada) (CIB) is a federal Crown Corporation of Canada tasked with financially supporting revenue-generating infrastructure projects that are in the public interest through public-private partnerships.

Canada Infrastructure Bank
Native name
Banque de l'infrastructure du Canada
Crown corporation
FoundedJune 22, 2017 (2017-06-22)
Key people
Michael Sabia (Chair of the Board of Directors)
$CDN 3,316, 000 [1]:7 (September 30, 2019[1]:7)
Total assets$CDN 796,408, 000[1]:6 (September 30, 2019[1]:6)
Total equity$CDN 796,408, 000 (September 30, 2019[1]:6)
OwnerGovernment of Canada
Number of employees
46[1]:6 (November 2019)
Websitecib-bic.ca

History

The Canada Infrastructure Bank was announced by Finance Minister Bill Morneau during the 2016 fall economic update, in response to a campaign promise made by the Liberal Party during the 2015 Canadian federal election. It was officially established in June 2017 when the Canada Infrastructure Bank Act received royal assent. The bank's website used to state that it "was established in response to a market gap between government-funded and privately funded infrastructure projects".[2][3] Some speculated that the banks creation was a way to sidestep the Committee on Monetary and Economic Reform's lawsuit.[4]

A Canadian investment banker working for Bank of America Merrill Lynch helped design and set up the Canada Infrastructure Bank as an unpaid advisor.[5]

The creation of the Canada Infrastructure Bank coincides the dissolution of PPP Canada and the PPP Canada fund, which were created under Prime Minister Stephen Harper to fund infrastructure projects with public-private partnerships.


Mandate

The 2017 Canada Infrastructure Bank Act sets out the corporation's mandate to invest, and seek to attract investment from private-sector investors and institutional investors, in revenue-generating infrastructure projects that are in the public interest.

The CIB uses financial instruments including loans, equity, and, where appropriate, loan guarantees to deliver federal support to projects to make them commercially viable. The CIB will provide financing and investment using a combination of these instruments depending on a project's unique characteristics. The model is to crowd in and mobilize private and institutional capital and to relate financial returns to project usage and revenue risk.

The Government of Canada sets the high-level policy priorities for the CIB, including:

  • projects that support the government's current priorities to invest in public transit, trade and transportation, and green infrastructure;
  • projects that contribute to the objectives of the Investing in Canada Plan and the Pan-Canadian Framework on Clean Growth and Climate Change; and
  • projects generally eligible for cost sharing under federal infrastructure support programs.

Consideration is given to potential projects appropriate for the new partnership- and revenue-based funding model.

The CIB reports to Parliament through the Minister of Infrastructure and Communities.[6]

Funding

The Canadian Parliament has authorized appropriations of $CDN35 billion covering the eleven-year period that ends in FY 2027-2028. This includes $CDN15 billion for the fiscal framework. This financial support is to fulfill a need to "mobilize private investment" for projects that would otherwise have no private investment. This may be in the form of "financial instruments" or "loans, equity investments, and loan guarantees."[1]:11

Governance

Annie Ropar is the Chief Administrative Officer (CAO) andChief Financial Officer (CFO) and Michael Sabia in Chair of the Board of Directors. Most of the board members are investors who have had their careers in major banks or pension funds. More than half of members have ties to the Liberal Party, including former Calgary mayor and past Liberal donor Dave Bronconnier.[7]

Pierre Lavallée was the first President and Chief Financial Officer (CFO) and Chief Executive Officer (CEO) of the Bank. He resigned from his position in April 2020.[8]

Projects

Mapleton, Ontario waste and wastewater infrastructure project (2019-)

On 15 July 2019 the BIC made a $CDN 20 million investment commitment township of Mapleton, Ontario's water and wastewater project.[1]:5 The financing comes in the form of a "standardized debt financing package" to "attract private capital expertise".[9] The Township of Mapleton, with a rural population of 11,000, has been seeking a consortium public-partnership to "design, build, finance, operate and maintain" a proposed 20-year project to improve and expand" the township's publicly owned water and wastewater infrastructure".[10] BIC said that this project is a potential pilot and model which could demonstrate to Canadian municipalities—including smaller communities—with water and wastewater challenges, how BIC can assist them in attracting private sector capital" for financing to improve publicly owned water and wastewater systems.[9][1]:5 While the water and waste-water systems will continue to be publicly owned, concerns have been raised by organizations, such as the Canadian Union of Public Employees (CUPE), that there is a risk that smaller communities may become locked into lengthy agreements with private financiers that result in higher user fees for water and wastewater services.[11]

Name Partner Location Sector Investment
Réseau express métropolitain (REM)[12] CDPQ Infra, Province of Quebec Montreal, Quebec Public Transit $1.28 billion (15-year senior secured loan)
GO Expansion - On Corridor[12] Infrastructure Ontario and Metrolinx Greater Toronto and Hamilton Area, Ontario Public Transit Up to $2 billion
Via Rail High Frequency Rail Project[12] Via Rail and Transport Canada Ontario and Quebec Public Transit $55 million
Mapleton Water and Wastewater[11][1][12] Township of Mapleton Mapleton, Ontario Green Infrastructure Up to $20 million
Lulu Island District Energy[12] City of Richmond, Lulu Island Energy Company Richmond, British Columbia Green Infrastructure Memorandum of Understanding
Contrecoeur Port Terminal[12] Montreal Port Authority Montreal, Quebec Trade and Transportation Up to $300 million
Taltson Hydroelectricity Expansion[12] Government of Northwest Territories Northwest Territories Green Infrastructure Advisory Services
Pirate Harbour Wind Farm[12] Port Hawkesbury Paper Point Tupper, Nova Scotia Green Infrastructure Memorandum of Understanding
Kivalliq Hydro-Fibre Link[12] Kivalliq Inuit Association, Sakku Investment Corporation, Anbaric Development Partners and Ontario Teachers' Pension Plan Nunavut and Manitoba Green and Broadband Infrastructure Memorandum of Understanding
Calgary-Banff Rail[12] Government of Alberta Calgary International Airport to the Town of Banff, Alberta Transit Memorandum of Understanding

Acts

The CIB was established by the Canada Infrastructure Bank Act (CIB Act), an Act of Parliament on June 22, 2017.[13][1]:11

References
  1. Second Quarter (Q2) Fiscal Year 2019-20 Financial Report (PDF). Canada Infrastructure Bank (Report). Toronto. November 19, 2019. p. 22. Retrieved January 14, 2020.
  2. "About Us". Canada Infrastructure Bank. Retrieved December 29, 2018.
  3. "Canada Infrastructure Bank". Liberal Party of Canada. Retrieved December 29, 2018.
  4. MacRae, Gavin. "Whose Canada Infrastructure Bank?". Watershed Sentinel. Retrieved June 10, 2020.
  5. Fekete, Jason (March 18, 2016). "Stakes are huge as Liberal government moves forward on Canada Infrastructure Bank". National Post. Retrieved June 10, 2020.
  6. "Mission and Mandate". Canada Infrastructure Bank. Retrieved July 8, 2019.
  7. Pressprogress. "Why The Liberal Government's Infrastructure Bank is Helping Big Banks and Dumping User Fees on Citizens". PressProgress. Retrieved May 9, 2020.
  8. "Canada Infrastructure Bank approved bonuses to CEO who resigned". Toronto Sun. May 27, 2020.
  9. "Township of Mapleton receives $20 Million Investment". Township of Mapleton. July 15, 2019. Retrieved January 14, 2020.
  10. "Mapleton Water and Wastewater". Canada Infrastructure Bank. 2019. Retrieved January 14, 2020.
  11. "Federal Infrastructure Bank Says It Sees 'Potential' to Privatize Local Water Systems Across Canada". PressProgress. January 14, 2020. Retrieved January 14, 2020.
  12. "Projects". Canada Infrastructure Bank. Retrieved July 8, 2019.
  13. "Canada Infrastructure Bank Act". Government of Canada - Justice Laws. Retrieved December 29, 2018.
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