Commons committee calls for CIB to be scrapped
The Canada Infrastructure Bank is coming under fire, with calls to fold the organization coming from several sources.
In a report tabled on May 3, the House of Commons Transportation Committee called on the government to cancel the Bank altogether. The report concluded that the Bank has failed in its mandate.
The Commons committee heard testimony from stakeholders directly involved in infrastructure projects across the country, and was told that the Bank was plagued with problems around inefficiency, lack of transparency and the inability to secure funding from the private sector.
“The Liberal government, cabinet ministers, and even the CEOs of the Bank have all made amazing claims that the $35 billion of taxpayers money at the Infrastructure Bank would be able to unlock two times, four times, even seven times the investment from the private sector,” said Andrew Scheer, the Conservatives’ shadow minister for infrastructure. “Yet, despite these claims, the Parliamentary Budget Officer has confirmed that the Canada Infrastructure Bank has received no private sector investment. It has completed zero projects, paid out massive bonuses to failed CEOs and is a complete waste of money.”
The Canadian Union of Public Employees also seized on the report to call for the Bank’s folding. The union has warned in the past that the work of the Bank would ultimately lead to the privatization of federal infrastructure, something it says would drive up costs and create unnecessary risks.
“From day one, CUPE has pushed the Liberal government to tear the CIB down to the studs and build a bank that works for communities, not corporations,” said CUPE National President Mark Hancock. “The committee confirms what we’ve been saying all along: privatization costs more, delivers less, and harms the public services we all count on. It’s time to build a fully public bank.”
A public bank, says CUPE, would lend money at lower interest rates than the private sector, support projects that communities need, and would not come with a requirement to privatize through public-private partnerships or other schemes. The union adds that operations would be open and transparent. By law, the CIB bars people who work for any level of government from sitting on its board.
In April of last year, the Parliamentary Budget Officer (PBO) released an analysis of the CIB’s spending and investment commitments since its inception in 2017.
At the time, which was four years into the bank’s mandate, the PBO found the bank was dispersing funding much slower than planned. The PBO concluded that the CIB was unlikely to disburse $35 billion within its 11-year mandate, forecasting a shortfall of $19 billion.
“CIB has been spending much slower than planned, but funding delays are common for public-private infrastructure investment projects,” said PBO Yves Giroux. “Based on our analysis of comparable organizations, the CIB’s spending is progressing somewhat below the average rate.”
The PBO also suggested that the CIB’s funding delays may be due in part to policy choices. Nearly half of project submissions received by the bank were judged to be too small, lack a private or public sponsor, or are not in one of the Bank’s priority areas.