Canada Infrastructure Bank CEO pushes back against calls for its abolishment

The federal government hopes Canadians will have more incentive to switch to electric cars thanks to a $500-million investment in the creation of zero-emission vehicle (ZEV) charging and hydrogen refuelling stations recently announced by the Canada Infrastructure Bank (CIB). The official opposition Conservatives, however, believe the CIB is the wrong vehicle for anything, and simply want the federal Crown corporation—established in 2017 to financially support revenue-generating infrastructure projects in “the public interest” through public-private partnerships—abolished. Clean Energy Canada hailed the half-billion-dollar initiative as a significant boost in the capacity of the country’s ZEV charging network that will both help address climate change and save Canadians money amid soaring gas prices. In May, Conservative House leader Andrew Scheer (Regina-Qu’Appelle, Sask.)—in his then role as infrastructure critic, issued a statement calling on the federal Liberal government to “cancel the wasteful, expensive, and inefficient” CIB. In May, then-Conservative infrastructure critic Andrew Scheer issued a statement calling on the federal Liberal government to ‘cancel the wasteful, expensive, and inefficient’ Canada Infrastructure Bank. The Hill Times photograph by Andrew Meade He referred to a May 2 report by the House of Commons Standing Committee on Transport, Infrastructure, and Communities (TRAN) on the bank that delivered only one recommendation: that the federal government “abolish” the CIB. Relying on testimony of witnesses, the committee—chaired by Liberal MP Peter Schiefke (Vaudreuil–Soulanges, Que.)—found many flaws with the bank’s structure, including its reliance on private financing in which the CIB is “missing an opportunity to offer municipalities the significantly lower interest rates that could be obtained through the federal government.” The report, said Scheer, “proves that the bank has been an absolute failure and the committee is recommending abolishment instead of trying to fix it.” He also referred to a 2021 analysis of the CIB conducted by the office of the Parliamentary Budget Officer (PBO) that found funding was being disbursed “much slower than planned,” but conceded that may be because of "policy choices.” The PBO said that nearly half of project submissions to the CIB fell beyond the mandate the federal government assigned the bank, most often—in part—due to missing a private or public-funding partner. As the PBO highlighted, the federal government tasked the CIB with investing $35-billion—from 2017-18 to 2027-28—into “large, revenue- generating infrastructure projects in priority areas": public transit, green infrastructure, clean power, broadband, trade and transportation, and Indigenous communities. In an interview, PBO Yves Giroux said that it was unclear at the time whether the CIB was the right vehicle to drive infrastructure development. Parliamentary Budget Officer Yves Giroux says when his office last looked at the Canada Infrastructure Bank in 2021, ‘it had not attracted private-sector partners yet.’ The Hill Times photograph by Sam Garcia “The last time we looked at the bank, it had not attracted private-sector partners yet,” he explained. “Maybe it’s something that will take time to take off, but experience, so far, has not been great—but it was also during a strange time,” said Giroux, referring to the COVID-19 pandemic. Giroux said that other jurisdictions are pursuing the concept behind an infrastructure bank as an investment tool. Quebec has had the Caisse de dépôt et placement—established in 1965—which announced last October that it is investing in one of the largest public-transit projects in North America: a 67-kilometre light-rail metro system spread across the greater Montreal area with 26 stations. The United Kingdom and the United States have also both pursued the infrastructure-bank model. In the government’s response to the House Transport Committee’s report on the CIB, Intergovernmental Affairs, Infrastructure, and Communities Minister Dominic LeBlanc (Beauséjour, N.B.), who is responsible for the bank, said that “no witnesses” called for the CIB’s abolishment, and that “the report relied exclusively on data and testimony compiled from February to March 2021, as well as the April 2021 Parliamentary Budget Officer report, and does not reflect the current state of the CIB nor its progress since the TRAN committee concluded its study.” He said that since the committee completed its study—and as of Aug. 12, 2022—the CIB has been involved in 39 projects across Canada, and that its $7.6-billion in investments have attracted $7.7-billion in private and institutional capital to projects with a total capital cost of $21.6-billion. According to the CIB’s quarterly financial report for the first quarter of 2022-23, released on Aug. 30, the bank has also attracted $6.3-billion from other public-sector partners, with deals in the works involving the Alberta government to build a 130-kilometre green-friendly rail service between the Calgary International Airport (YYC) and Banff National Park, and another $380-million investment to put up to 446 zero-emission public transit buses on the road in the national capital through a partnership with the City of Ottawa’s OC Transpo service with the goal of meeting the city’s commitment to completely eliminate greenhouse gas (GHG) emissions by 2040 through the vehicle-electrification initiative. CIB chief executive officer Ehren Cory told The Hill Times that the prime purpose of the bank is to find “innovative ways to grow the pie in terms of infrastructure investment. We’re another tool in that toolkit.” Prime Minister Justin Trudeau attends an Oct. 8, 2020, announcement about the retooling of the Oakville, Ont., Ford assembly plant to produce electric vehicles. The federal government’s goal is to more than double the number of public electric-vehicle charging stations to 50,000. The Hill Times photograph by Andrew Meade “Historically, infrastructure in this country has been two solitudes. There is the publicly funded, grant-based, publicly owned infrastructure at one end of the spectrum. At the other end, there is lots of stuff that would qualify as infrastructure—broadband, to give you an example—that is privately owned and operated. And there’s a big swath in the middle of those two where there’s opportunity for a true partnership between public and private, and for private capital to help augment the efforts of government,” he explained. In his letter to the Transport Committee, LeBlanc cited the CIB’s involvement in rural broadband projects that are helping to connect about 48,500 households with fibre-to-the-home in Manitoba, and some 200,000 rural households in Ontario. “It’s infrastructure that the private sector wouldn’t do alone because it doesn’t have a payback,” said Cory, who underscored that the CIB operates on loans, not grants, to businesses. “On the other hand, it’s infrastructure that if the government tries to pay for itself, it cannot afford it all.” The minister also said that the CIB is “helping close the Indigenous infrastructure gap” by committing to invest at least $1-billion in Indigenous communities and reducing the minimal loan size from above $100-million to $5-million, which also “allows for flexibility in terms of repayment.” The ZEV-charging initiative is an example driving the public-private partnership, said Cory. “If you want to have accelerated rollout of high-capacity, high-speed chargers across the country in a way that allows for rapid EV adoption, this is a way government can give a boost to the efforts of the private sector,” he explained. According to the CIB, there were about 22,000 public chargers and six hydrogen-fuelling stations across the country, as of August. The federal government’s goal is to more than double that number of public EV chargers to 50,000. Cory said that while private-sector operators are building infrastructure, “it’s not happening fast enough to support the kind of EV aspirations that we have for this country.” The CIB is trying to “share in the risk alongside the private sector and other levels of government to help make projects happen,” said Cory. “There is incredible interest in low-carbon fuels and the potential for us to be a hydrogen supplier to the world. These are potentially viable businesses, but with quite bit of uncertainty about how the global energy markets are going to be over the next few years.” The Canada Infrastructure Bank is a tool in the toolkit for meeting the country’s infrastructure investment needs, according to CEO Ehren Cory. Photograph courtesy of LinkedIn “We can help to mitigate some of that uncertainty, which will allow more projects to get unstuck and get started that otherwise wouldn’t.” The CIB’s $500-million ZEV-charging investment was itemized in the 2022 federal budget, which also announced a “broadened role” for the bank “to invest in private sector-led infrastructure projects that will accelerate Canada’s transition to a low-carbon economy allow the CIB to invest in small modular reactors; clean fuel production; hydrogen production, transportation and distribution; and carbon capture, utilization and storage.” Late last month, the CIB announced an energy-expansion project in Richmond, B.C., with Lulu Island Energy Company—a municipal corporation owned by the city—and Corix Infrastructure Inc., which will design and build the system. Under the agreement, the CIB will provide $175-million in financing for the energy project that will enable expansion to more than 170 new residential and mixed-use commercial development sites in the area by 2050, while reducing GHG emissions by one million tonnes. Cory highlighted that the CIB’s infrastructure investments are “long-term,” but “the benefits last many decades.” “The good news for me is that infrastructure has the wonderful benefit of being completely apolitical,” he said. “It’s one of the few areas of public life where there’s a real consensus, because every level of government knows that we need to invest more in infrastructure if we want to have a competitive economy and make the green transition that we need to, and have the kind of society we aspire to.” In Cory’s opinion, the CIB is “a very practical solution to the problem of getting things done more quickly.” The Hill Times Zero-emission vehicles in Canada There were 37.7 per cent more plug-in hybrid electric vehicles and 3.8 per cent more new hybrid electric vehicles registered in Canada in first quarter of 2022 compared to the first quarter of the previous year. New registrations of zero-emission vehicles (ZEVs) represented 7.7 per cent of all new motor vehicles registered in the first quarter of 2022. Of these 26,018 new zero-emission vehicle registrations, 75.7 per cent were battery electric vehicles and 24.3 per cent were plug-in hybrid electric vehicles. The vast majority (93 per cent) of these new ZEV registrations were in Canada’s three largest provinces. British Columbia had the highest proportion of new ZEV registrations, representing 15.5 per cent of all new motor vehicle registrations in the province. Quebec had the most new ZEVs registered (10,399), comprising 12.7 per cent of all new registrations in the province. Registrations of new ZEVs more than doubled in Ontario, increasing 114 per cent from the first quarter of 2021 to the same quarter in 2022. —Source: Statistics Canada: New motor vehicle registrations, first quarter 2022

Canada Infrastructure Bank CEO pushes back against calls for its abolishment

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Canada Infrastructure Bank CEO pushes back against calls for its abolishment

Infrastructure Bank CEO Ehren Cory says that while private-sector operators are building infrastructure, 'it’s not happening fast enough to support the kind of [electric vehicle] aspirations that we have for this country.'

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