Canada Infrastructure Bank

The Canada Infrastructure Bank was announced by the Finance Minister, Bill Morneau, during the 2016 fall economic update. This was based on a campaign promise made by the Liberal Party during the 2015 Canadian federal election. The bank was officially established in June 2017, when the Canada Infrastructure Bank Act received royal assent. The bank's website previously stated that it "was established in response to a market gap between government-funded and privately funded infrastructure projects". Some speculated that the bank's creation was a way for the government to sidestep the Committee on Monetary and Economic Reform's lawsuit. A Canadian investment banker working for Bank of America Merrill Lynch helped design and set up the Canada Infrastructure Bank. In November 2016, the government held high-level meetings concerning the bank's structure behind closed doors with private consultants from McKinsey, major equity investors such as BlackRock, and Canada's largest pension funds. The creation of the Canada Infrastructure Bank coincides with the dissolution of PPP Canada and the PPP Canada fund, which were created under Prime Minister Stephen Harper to fund infrastructure projects using public-private partnerships. Janice Fukakusa was appointed as the CIB's inaugural chairperson of the board of directors in July 2017. She was joined in May 2018 by Pierre Lavallée, the CIB's first president, chief financial officer (CFO), and chief executive officer (CEO). The first few years of the bank's existence were mired in controversy related to the fact that some of its main projects would be funded mainly by user fees. Both the Conservative Party and the New Democratic Party vowed to wind down the bank if elected. In October 2020, he was replaced by former McKinsey & Company partner Ehren Cory. In January 2021, Tamara Vrooman was selected as the new chair of the bank. In July, Vrooman reported that the CIB "has funded and financed about $13.9 billion in projects, over 70 per cent of those in the last six months alone, with almost 70 per cent of that financing coming from the private sector." The House of Commons transport committee oversaw a review of the bank, and held hearing on its operation in 2021. In May 2022, the committee released a report based on these findings with one recommendation: "That the Government of Canada abolish the Canada Infrastructure Bank". == 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 provides financing and investment using a combination of these instruments depending on a project's characteristics. ==Funding==

The Canadian Parliament has authorized appropriations of $CDN35 billion covering the 11-year period that ends in fiscal year 2027–2028. This includes $CDN15 billion for the fiscal framework. This financial support is not earmarked for projects directly, but to "mobilize private investment" in projects that would otherwise have no private investment. This may be in the form of "financial instruments" or "loans, equity investments, and loan guarantees." User fees CIB projects are paid for through user fees. In a September 2017 keynote address to the Canadian council for public-private partnerships, CIV chair Janice Fukakusa affirmed that infrastructure projects financed through the CIB would be outside the public balance sheet. She then stated that projects could generate revenues "in many different forms, including fees, tolls, fares, tariffs, and mechanisms based on appreciating land value". In a 2018 interview with B2B magazine IPE Real Assets, CIB CEO Pierre Lavallée clarified that "when it is operational, users will fund the bulk of the operations". Public–private partnerships Since its inception, the CIB has promoted public-private partnerships for infrastructure procurement. In July 2022, six months after becoming chairperson of the CIB, Tamara Vrooman told the Toronto Region Board of Trade that she was a "big fan of public-private partnerships". Public-private partnerships are generally more expensive than publicly financed projects. This is in part due to the use of private-sector financing, which comes at a higher interest rate than public financing. ==Governance==

The bank's chair is a Governor in Council appointment made of the advice of the minister of infrastructure and communities. Tamara Vrooman was appointed chair on January 27, 2021. Ehren Cory is the bank's chief executive officer and president, Most of the board members are investors who have had 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. Political scientist Heather Whiteside predicted that the board of director's private-sector majority would mostly be concerned with projects' profitability and would disregard the government's other infrastructure priorities. Under Ehren Cory, the bank streamlined its approval process. From 2021 onwards, the federal government stopped reviewing individual projects and began approving CIB investments by sector. In January 2020, following numerous criticism of the bank's operations, the House of Commons commissioned an audit of federal infrastructure projects (worth over $186.7 billion) and a complete review of the bank. In March 2021, the Canadian House of Commons Standing Committee on Transport, Infrastructure and Communities unanimously requested that the CIB provide the committee with "all documents detailing the bonus policies and payment of bonuses to executives and the board of directors since the bank's inception". The bank's 157-page response to this request did not include the details of its executive bonuses, citing "competitive and privacy considerations". Opposition members of the committee strongly criticized the bank for this omission. Leadership history :Chairperson • Janice Fukakusa (July 2017–April 2020) • Michael Sabia (April 2020–January 2021) • Tamara Vrooman (January 2021 – January 2024) • Jane Bird (interim) (January 2024 – present) :CEO • Pierre Lavallée (May 2018–April 2020) • Annie Ropar (Interim) (April 2020–October 2020) • Ehren Cory (October 2020 – present) ==Reception==

Since its inception, the bank has received sharp criticism from public-sector unions such as the Canadian Union of Public Employees (CUPE), which characterized the CIB as a "Bank of privatization" and a "Jackpot for corporations". Both the Conservative Party, led by Andrew Scheer, and the New Democratic Party (NDP), led by Jagmeet Singh, promised to wind down the CIB if they were elected to form government in the 2019 Canadian federal election. == Projects ==

Cancelled waste and wastewater infrastructure project in Mapleton, Ontario On July 15, 2019, the CIB made a $CDN20 million investment commitment in a water and wastewater project in the township of Mapleton, Ontario. Mapleton, with a rural population of 11,000, has been seeking a public-private 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". The CIB said that the project is a potential pilot and model that could demonstrate to Canadian municipalities—including smaller communities—with water and wastewater challenges how the CIB can assist them in attracting private-sector capital for financing to improve publicly owned water and wastewater systems. While the water and wastewater systems will continue to be publicly owned, concerns have been raised by organizations, such as the Canadian Union of Public Employees (CUPE), that smaller communities may become locked into lengthy agreements with private financiers that result in higher user fees for water and wastewater services. The proposal attracted international attention due to the project's unique financing model. However, in August 2020, after reviewing financial analyses of the main proposals, the township opted to cancel the project. A report showed that self-financing the project would be more advantageous for Mapleton than using the CIB's model. ==Acts==

The CIB was established by the Canada Infrastructure Bank Act (CIB Act), an Act of Parliament on June 22, 2017. ==References==