A 300 page omnibus budget bill, which contains the new Canada Infrastructure Bank Act, is being rammed through Parliament, with the Committee being given only two hours to study and review this Bill.
Trudeau, who lampooned Harper for his undemocratic and multifarious omnibus bills, is showing his hypocrisy as, this bill, titled Bill C-44, is making many amendments, implementations and provisions that are lumped in with this new creation of a Canadian Infrastructure Bank (CIB), which will be allocated $35 billion dollars out of the Consolidated Revenue Fund.
This new bank is facing controversy for its conflicts-of-interest and the unfair protection granted to private investors.
From the Globe and Mail:
Legislation to create a $35-billion Canada Infrastructure Bank is scheduled to receive just one day of dedicated committee scrutiny as the federal government rushes to complete all hearings on the budget bill before the end of next week.
Conservative MP Dianne Watts, a former mayor of Surrey, B.C., said it is “laughable” that the Liberals are setting aside about two hours to study an issue as complex as the infrastructure bank.
“It needs more than a day,” she said. Ms. Watts said a proper study would include a review of potential conflicts of interest, the impact of the bank on existing infrastructure programs and how taxpayers would be affected when a project fails. Ms. Watts is also concerned about the legislation’s limited transparency provisions for the bank in terms of reporting to Parliament and access-to-information exemptions.
“You’re shovelling $35-billion into this bank. It really needs to be studied,” she said. “For two hours, they’re going to study this. I mean, it’s laughable.”
Essentially, the CIB, seeks to attract private investments for new infrastructure projects throughout Canada.
Critics argue that these infrastructure projects, which generally generate high returns with low risk, should be put back into the pockets of the public sector, instead of private investors – who seek to fund these projects with the underlying intent of generating the most profit.
The new bank, with a stimulus of $35 billion dollars, will provide leverage for private investments at a ratio of four dollars to one.
The idea for the bank was created October of last year, after a report made by the Advisory Council On Economic Growth recommended its creation. The ACEG is a group of private investors, CEO’s and other financiers, handpicked by Finance Minister Bill Morneau.
Internal documents have revealed that government ministers spent months working with groups like BlackRock who provided policy advice on how the government should structure the bank, as well helping to design the presentation to potential BlackRock investors during a seminar on November 14, before the Bill was introduced to the House. This raises serious conflict-of-interest concerns; as the very company (in BlackRock) who helped design the format of the bank, along with ways to attract investors, will also, be investing in it.
Furthermore, many are criticizing the fact that should the infrastructure projects fail, the $35 billion dollars will be used as a hedge to shortfall any risks. This means that, not only will trillion dollar fund managers like BlackRock be making returns of around 5-10% on their investments, but also, taxpayer dollars are hedging the risk should failure occur.
Although infrastructure is necessary for Canada to help supplant its population and economic growth, Randall Bartlett, Chief Economist at the Institute of Fiscal Studies and Democracy, one of Canada’s leading think tanks on public finance, asks why “the federal government doesn’t just borrow the funds for these investments. With yields on 30-year Government of Canada bonds currently sitting around 2.2%, the federal government can almost literally get ‘money for nothing’. Nobody in the private sector can borrow at this rate over 30 years.”
He continues in a blog post saying,
“It is important to note that investors are most likely to prioritize those projects with the highest return and lowest risk, as one would expect. Therefore, it is the higher-value assets which are most likely to be subject to private ownership. Since it is Canadian taxpayers that will pay for these assets regardless of whether they are publically or privately owned, this does beg the question: Why would taxpayers sell their most valuable assets to the private sector, thereby transferring these high risk-adjusted returns from the public sector to the private sector? To date, this question remains unanswered.”