Buried deep within a 300 page omnibus bill affecting 30 different statutes lies the new monstrosity known as the Canada Infrastructure Bank.
For those unaware, the CIB, is a new privatized bank, being injected with $35 billion dollars of capital – on behalf of the taxpayer – in order to attract private investors who might be looking to invest in new infrastructure within Canada.
Of course, infrastructure is extremely necessary in Canada. The country has stagnated on development and new infrastructure is desperately needed to supplant our growing economy and population.
Saying all this however, with Trudeau looking to privatize infrastructure; we would be essentially selling off the sovereignty of our country to private billionaire investors – some of whom have been colluding with the government behind closed doors.
Indeed, deep within Bill C-44, lies this new development, which, at behind closed-door meetings, the Infrastructure Minister, and other members of the Cabinet, met with BlackRock faculty, who worked together to create the structure of this bank. Internal government documents reveal the extent of this collusion, and it was found that BlackRock, the largest asset managers in the world, were given unprecedented control over the intricacies of development regarding this new bank. The problem with this arrangement is that BlackRock themselves, are looking to invest into this newly created bank, spurring a serious conflict-of-interest.
Matthew Dube, NDP Critic for Infrastructure and Communities argued that,”It is a conflict-of-interest to allow private corporations, who will be the largest beneficiaries of the CIB, to participate in the planning and development of this bank.” There has been no direct response from the Liberal government concerning this insinuation.
Moreover, the bureaucracy goes even deeper as it appears that appointees from the private sector will be allowed to sit on the Board of Directors – no federal, provincial or municipal representatives will be allowed to sit on the Board, who would ensure that the public’s interest is held above all else. Indeed, it is important to get public representation, considering $35 billion dollars of taxpayer money is put into this bank’s development.
At least this Bill will be held under close scrutiny in the House of Commons to ensure we receive proper analysis and any recommendations for amendments, right?
Wrong. Trudeau is only allotting two hours of time to the Committee in the House of Commons, and is trying to ram this Bill as quickly as possible through Parliament. Our government is only allowing two hours of review on the bank and the giant omnibus bill; while BlackRock officials were given three months of time to work on the design of the CIB.
If this wasn’t enough to rouse a little apprehension; here are some more unsettling points, which are very much important to mention.
Firstly, let’s not forget that the Liberals campaigned on the promise of eliminating omnibus bills and ensuring transparency in government. With the advent of this new development, it seems Trudeau is doing the exact opposite he promised.
Secondly, the Government of Canada has the ability to borrow money necessary for funding infrastructure projects at 1-2%. At such low rates, we would be able to own our own infrastructure and put the money earned through various tolls and fees back into the public purse. Instead, the tolls and fees will be going into the pockets of wealthy financiers.
To add this to this point, Randall Bartlett, head of the Institute of Fiscal Studies and Democracy wrote a scathing review of the bank, mentioning that ‘private investors looking to invest will not be funding ‘greenfield’ investments, like roads or bridges, as these are unprofitable ventures, but rather in ‘brownfield’ investments, which are more profitable endeavours.’ Pension fund owners and private investors have also stated they wanted a return of 7-9% on investments over $500 million dollars. The only way to do this would be through projects that incorporate fees and tolls – meaning that taxpayers will be paying twice, once through their tax dollars and twice through potentially expensive fees.
Bartlett also goes on to say that Canada has failed to do sufficient analysis or review regarding our infrastructure needs, essentially saying that because we don’t have the necessary information instructing us on which infrastructure would be most beneficial, where we need it, and/or how we can get the highest returns, we would be taking a huge risk investing money into this bank, as it leaves the door open for inefficient infrastructure investments and misallocation of public funds, which would defeat the purpose of making these investments in the first place. Furthermore, projects built by private investors will be built with the intent of generating the highest returns for them, rather than generating the most efficient and effective system for Canadians.
Furthermore, should repairs be necessary, it will of course be taxpayers footing the bill, once investors realize that the crumbling infrastructure has lost its value.
Already Ontario has had a horrible experience with PPP’s (Private-Public Partnerships) like these. In her Annual Report, the Auditor General of Ontario found that PPP’s have costed taxpayers an extra $8 billion dollars.
“For 74 projects that were either completed or under way under Infrastructure Ontario, tangible costs, such as construction, finance and professional services, were estimated to be nearly $8 billion higher under the Alternative Financing and Procurement (AFP) approach than they were estimated to have been if the projects had been delivered by the public sector,” Lysyk said following the release of the Report. “About $6.5 billion of this is due to higher private-sector financing costs.”
In her follow-up report, Lysyk also highlighted the possibility of $36.6 billion dollars in long term PPP liabilities and commitments that the present and future governments will face.
Furthermore, according to CUPE Research, the Provincial Auditor of Quebec found:
“that the McGill University Health Care Centre (MUHC) P3 cost more than the public option, and that the analysis used to compare the P3 model to a conventional public model was extremely faulty. Instead of the P3 model saving $33 million, the provincial auditor found that the public model would have saved $10 million. The auditor’s special report to the National Assembly also found that there was a cost overrun of more than $108 million, on top of the original price tag of $5.2 billion.
Not only that, a number of the key people involved in the McGill University hospital P3, such as Arthur Porter and the former CEO of SNC Lavalin, have been charged with corruption associated with this project.
Recently two researchers from Montreal calculated that the government of Quebec would save up to $4 billion if it bought back the two super hospitals from the P3 consortium.
It is clear that this Bill is a bad idea – for many reasons. First and foremost Trudeau should separate the CIB from his omnibus bill and allocate more time for review – as $35 billion dollars of taxpayer money is a hefty sum; and one that should not be thrown around with frivolous whimsicality. It appears Trudeau has no regard for this reasonable request, as he is already courting executives to lead the new bank; even before the Bill has received royal assent from the Governor-General.
Infrastructure is necessary, especially in Canada’s case; however, we need to make sound decisions before we decide to make hasty choices and investments in the country that could potentially have lasting effects on Canada, the citizenry, the economy and our children for years to come.