Canada Infrastructure Bank, part of a large program, failed to perform well

The federal government’s attempt to redefine the infrastructure that makes the private sector creepy, says business professor

An analysis of Canada’s multi-billion dollar infrastructure spending initiative raises a plethora of danger signals.

The· Canada Infrastructure Bank (CIB) According to March 23, investment in revenue-generating projects and the attraction of private capital to reduce costs to the government have begun to stagnate. Parliamentary Budget Officer (PBO) Report..

CIB is a federal royal company Investing in Canada Plan Launched in 2016, (IICP) aims to fund the infrastructure of more than $ 180 billion taxpayers over a 12-year period.

The PBO says it has invested $ 1.23 billion (only 3.5%) of its $ 35 billion mandate and received 420 project proposals for about four years of operation. Only two of them have completed their investment and both have private sector participation.

The· CIB aims to attract Capital from institutional investors such as investment trusts, pension funds and insurance companies as well as private investors.

2016, then Minister of Finance Bill Morneau The CIB said it aims to attract “additional $ 4-5 to pension funds and institutional investors” per federal dollar.

While the CIB is not strictly attracting private capital, spokesperson Felix Corribaud has told the Epoch Times that one of its two final investments, a $ 6.3 billion transport project in Montreal, is an infrastructure investment subsidiary, CDPQ. He said he had attracted $ 3.2 billion in investment from infrastructure. Quebec Investment Trust Bank, A state royal company that manages several pension schemes and insurance programs in Quebec.

“We need to attract new investments from everywhere,” wrote Infrastructure and Community Minister Catherine McKenna. Recently Statement of priorities and accountability letter.

CIB fix

Opposition conservatives, statement Former leader Andrew Scheer, the shadow minister of infrastructure and communities, and Luc Berthold, the shadow minister of the Finance Commission, said they would abolish the “failed” CIB.

Ian Lee, a business professor at Carleton College, told The Epoch Times that the CIB is still bailable, but the government must understand the mistakes it made.

“Recognize that you just redefine something [as infrastructure] That is not the case. Let’s go back to the old-fashioned … traditional infrastructure, “he said.

Lee’s criticism of CIB is that the government is trying to dictate the type of infrastructure the private sector should partner with CIB. It incorporates the social and ideological purposes of creating red tape. But he points out that the private sector is not supported by taxpayers, so a profitable source of income is needed, among other things.

“By loading all sorts of social goals, it has made it less economical, less profitable, less feasible, and it has scared the private sector too,” he said. Said.

According to the PBO, the main reasons project proposals are rejected by the CIB are “ineligible sectors, insufficient size, and lack of scalability.”

If there are no potential projects inside 5 investment sectorsPublic transport, clean electricity, green infrastructure, broadband, trade and transportation will be denied, Corybaud told The Epoch Times.

He said three more projects have been identified, in addition to the two confirmed investments, and seven more projects are expected to reach a firm commitment by July 1. Clean power, and zero emission bass.

The· PBO The report also reiterated PBO’s previous findings on the entire IICP, raising concerns about data gaps in federal funding tracking, late-planned spending, job creation and lower-than-expected economic growth. It was.

Bigger problem

Almost consistent with the PBO report on CIB President of Audit & Supervisory Board Canada Infrastructure has accused it of “not being able to provide a meaningful public report on whether its investment plan in Canada has achieved its objectives.”

The· Main problem It was that it did not contain legacy programs Previously existed Although IICP accounts for almost half of the planned $ 188 billion commitment.

McKenna’s response to the AG report was to give an overview of what was already spent. Over 67,000 projects worth $ 81 billion, 90% complete or in progress. She also pointed out the publication of Canada’s first “engagement paper” on National Infrastructure Assessment (NIA).

Purpose of NIAThe announcement is to solicit feedback from Canadians to identify the needs and priorities of the country’s infrastructure and inform long-term plans for a zero-emission future. “Build Canada we want in 2050.”

But Lee said the NIA was designed to address the possibility of retaliation in the upcoming federal elections.

“I think this announcement is damage control. It’s designed to avoid criticism … and they’ll say,’Look, look, we’re in charge of the situation,'” Lee said. Told.

In Canada, there is a significant “infrastructure deficit” in spending on repairs and new construction to raise infrastructure stock to the right level. This is the result of years of population growth and government spending shortages, wrote Christopher Ragan, director of Max Bell’s School of Public Policy at McGill University. McLean’s editorial..

Most estimates of the deficit range from $ 110 billion to $ 270 billion, according to the 2017 Boston Consulting Group. report, This is “ordinary” in the quality of Canada’s infrastructure and is characterized by a significant portion of its assets being in poor or very poor condition.

Many of Canada’s major infrastructures still rely on older technologies, and Canada is consistently lagging behind in transportation, utilities, and energy investment.