Tab B: INFC Topics

• Canada Infrastructure Bank Mandate and Authorities
• Canada Infrastructure Bank Governance and Role
• Canada Infrastructure Bank Operations and Finance
• Canada Infrastructure Bank Projects
• Canada Infrastructure Bank's Three Year Growth Plan
• P3 Models and Privatization

Canada Infrastructure Bank Mandate and Authorities

Topic

The CIB was incorporated pursuant to the CIB Act and leverages innovative financing structures to make public dollars go further.

Responsive Lines

• The CIB model is about thinking big and working with other levels of government over the short to long term to deliver more infrastructure for Canadians, and to reduce the burden on taxpayers.
• The CIB helps public dollars go further by using federal support to mobilize private-sector investment, allowing more projects to be built.
• The CIB is operating within its legislated mandate and is aligned with government priorities articulated in authorities such as Statement of Priorities and Accountabilities Letters from the Minister of Infrastructure and Communities, and its Government-approved corporate plans.

Background

The Canada Infrastructure Bank Act requires that the CIB work with other governments across Canada to attract investment from private sector investors like pension funds in revenue generating infrastructure projects that are in the public interest, such as those that support economic growth or sustainability.

The CIB executes its mandate through three business lines: advisory; investments; and data & information. The advisory and data & information functions are mutually reinforcing and intended to support the CIB's investment activities.

• The CIB fulfills its accountability requirements to its portfolio minister, and to Parliament. The Government approves its corporate plan, and its operating and capital budgets.
• The CIB provides the documents required of Crown corporations in the annual reporting cycle, like its corporate plans and its annual report and quarterly financial reports.

The CIB is primarily subject to the Canada Infrastructure Bank Act, Part X of the Financial Administration Act, other key legislation, including the Official Languages Act and Access to Information and Privacy Acts.

Additional key authorities include Ministerial letters, including formal Statements of Priorities and Accountabilities, government Budgets, Speeches from the Throne, and less formal guidance or expectations that may be conveyed from government from time-to-time.

As with all federal entities, the CIB must uphold the Honour of the Crown when dealing with Indigenous peoples, including exercising the Duty to Consult where required.

Canada Infrastructure Bank Governance and Role

Topic

The CIB is governed by an independent Board of Directors who oversees its activities and makes investment decisions.

Responsive Lines

• The Canada Infrastructure Bank is an arm's length Crown corporation that leverages federal dollars to collaborate with private sector investors to deliver complex revenue-generating infrastructure projects in the public interest.
• The CIB is governed by an independent Board of Directors that oversees its activities and that is responsible for making final investment decisions.
• As part of the Government's broader efforts to support the Canadian economy and accelerate infrastructure delivery, the CIB's recent Corporate Plan reinforced the Board, which is responsible for making investment decisions, while still ensuring they align with government priorities.

Background

Crown corporations operate at arm's length from the Government of Canada and have the flexibility to fulfill their commercial mandates, while adhering to applicable policies and guidance.

The Canada Infrastructure Bank is overseen by a Board of Directors consisting of a Chairperson and between eight and 11 other Board Members. 

The Board appoints a CEO to lead and manage the CIB's operations. The CEO and the executive team propose strategic plans and investment proposals to the Board for review. The Board renders all final investment decisions, independent from the federal government.

Although the Board makes investment decisions, the CIB and government collaborate closely, both through and outside of the corporate planning process, to ensure any and all contemplated investments are aligned with the CIB's authorities and government's expectations.

Like other federal Crown corporations, the CIB is accountable to Parliament through the Minister of Infrastructure and Communities and abides with the Government of Canada's rigorous reporting and accountability framework for Crown corporations.

Canada Infrastructure Bank Operations and Finance

Topic

The CIB is expected to manage its operating expenses and investment budget through its $35 billion in statutory appropriations.

Responsive Lines

• The Canada Infrastructure Bank's operating costs support activities that include assessing and structuring investments, project development and advisory services, and acting as a center of expertise on alternative finance.
• As an arm's length Crown corporation, the Bank is responsible for costs related to its administration, human resources, information technology, professional fees and premises.
• Operating expenses at March 31, 2020, were $24.6 million, an increase of 54% from the previous year as the CIB builds capacity across the organization in order to advise on projects and undertake due diligence on potential investments.

Background

The Canada Infrastructure Bank Act provides the CIB with the authority to utilize a broad range of financial instruments deployed on a case by case basis to make investments of $35 billion.

Within the $35 billion, the CIB has access to a maximum fiscal expense of $15 billion to cover investment losses (concessional capital) and operating expenses.

The 2020-21 Supplementary Estimates C under Finance Canada have appropriations for the CIB of $2.252 billion.

The total outlay for CIB's investment and operating activities since its inception is $1.35 billion:

• Investments - $1.283 billion (Réseau express métropolitain)
• Operating expenses (2017 to Sept 30, 2020) - $64.5 million
• Corporate Assets/Leaseholds (2017 to Sept 30, 2020) - $1.6 million

CIB operating expenses include compensation, professional fees, premises and equipment, communication, travel, information technology and administration. Corporate Assets/Leaseholds include payments for office space and equipment.

The operating expenses the CIB has incurred to date – $64.5 million – represents less than 0.25% of its $35 billion fiscal envelope, and a large part of these expenses were for its $55 million commitment to support VIA HFR.

The three largest elements of the CIB's operating expenses are:

• VIA HFR, 55%, includes advisory services for CIB's advisory role on the VIA HFR project (a total commitment of $55 million over 3 years from the CIB).
• Compensation, 27%, includes salary, short-term and long-term incentives, benefit costs and taxes for directors.
• Professional fees, 12%, includes employee and other costs for due diligence, such as deal-consulting fees, investment and deal-closing fees, on potential investments.

The Government has been fully transparent about the salary range of the [Chair/CEO] and this information is published as part of the Order in Council approving their appointments.

• Remuneration for the Chairperson of the CIB Board is between $85,000 and $100,000 per annum, and for a Board Director is $50,000 per annum.
• The remuneration framework for the CEO has a base salary range of $510,000 - $600,000 along with annual short-term and long-term incentive awards set against performance.
• The specific compensation paid to any employee is protected under the Privacy Act.

As of December 31, 2020, the CIB's staff complement was 64 full-time employees, up from 49 full-time employees as of March 31, 2020, and approaching the CIB's plans for 2020-21 of 81 full-time employees.

If questions about the CIB's operating costs are raised:

• The CIB is building up the internal structure it needs to create long-term net positive value for Canadians.
• The Government is working closely with the CIB to establish it as a credible and compelling partner in complex infrastructure arrangements. Sufficient resources, diverse and successful strategies, and deep expertise are required to achieve this.

Canada Infrastructure Bank Projects

Topic

The CIB is building a pipeline of projects in 5 priority areas: trade and transportation, public transit, clean power, green and broadband infrastructure.

Responsive Lines

• The CIB has announced its involvement in 13 projects, including investments in 4 projects valued at almost $4 billion, as well as advisory roles in another 9 projects, including hydro and electrical intertie projects.
• The $10 billion Growth Plan is a short-term plan designed to support Canada's economic recovery and the CIB has already announced two projects. CIB is ready to respond to projects – both short-term and long-term – brought forward by PTM and public partners.
• Large, transformative projects take time to develop and need the expert advice and support of the CIB.

Background

The CIB's announced investments include:

• A $1.28 billion investment in Réseau express métropolitain (REM) light rail in Montréal;
• An up to $2 billion investment in GO Expansion – On Corridor electric rail in Greater Toronto Area; and
• An up to $300 million investment in construction of a new container terminal in Port of Contrecoeur outside Montréal.
• A $407.5 million investment in Alberta irrigation to develop modern irrigation infrastructure and significantly expand irrigable land opportunities within eight irrigation districts.

CIB has announced Memorandums of Understanding and advisory engagements on seven projects:

• VIA High Frequency Rail: A Joint Project Office between CIB and VIA Rail to facilitate and oversee the conduct of pre-procurement, planning, due diligence and de-risking activities for VIA High Frequency Rail project between Ontario and Quebec – a Government commitment of $71.1 million (including $55 million from the CIB);
• Lulu Island District Energy: A Memorandum of Understanding formalizing collaboration between CIB and Lulu Island Energy Company to develop a new district energy project in Richmond, BC was signed on August 1, 2019;
• Taltson Hydroelectric: Advisory services engagement with Government of Northwest Territories to assist in developing a new 60 MW clean energy hydroelectric facility and 270 km of transmission lines to reduce reliance on diesel, and facilitate a more flexible and balanced electricity load in the region on August 28, 2019;
• Pirate Harbour Wind Farm: A Memorandum of Understanding formalizing the collaboration between CIB and project proponents on the potential Pirate Harbour Wind Farm in Nova Scotia on December 1, 2019;
• Kivalliq Hydro-Fibre Link between Manitoba and Nunavut: A Memorandum of Understanding with Kivalliq Hydro-Fibre Link project proponents to work on planning and development of proposed construction of a new 1,200-kilometre, 150-megawatt transmission line between Nunavut and Manitoba as well as fibreoptic cable on February 5, 2020;
• Calgary-Banff Passenger Rail: A Memorandum of Understanding with the Province of Alberta for a passenger railway between downtown Calgary and Banff. A potential connection to the Calgary airport is being explored as well but has not been formally studied at this stage on June 9, 2020; and
• Oneida Energy Storage: A Memorandum of Understanding for the project which includes development of a 250 megawatt / 1000 megawatt-hour energy storage facility in Southwestern Ontario on January 12, 2021.

The CIB also announced project acceleration funding to two projects in 2021:

• New Westminster Rail Bridge: Issued an RFP for work related to examining the transportation needs of Asia-Pacific Gateway transportation network, including New Westminster Rail Bridge; and
• Highway 697 Toll Bridge: A Memorandum of Understanding with Alberta Transportation to undertake a review of the proposed Highway 697 Toll Bridge.

The CIB's investments are also leveraging private sector investment:

• $2.95 billion from CDPQ Infra, a wholly owned subsidiary of Caisse de dépôt et placement du Québec In REM; and
• $163 million in investment from the private irrigation districts.

The CIB is also working alongside a number of private sector participants in projects including:

• Sakku Investments Corporation, Anbaric Development Partners and Ontario Teachers' Pension Plan on the Kivalliq Hydro-Fibre Link;
• NRStor Inc. in collaboration with the Six Nations of the Grand River Development Corporation on the Oneida Battery Park; and
• Port Hawkesbury Paper and IFE in the Pirate Harbour Wind Farm in Nova Scotia.

Other private sector investors across the priority areas will be identified, in many cases, through the procurement process.

Canada Infrastructure Bank's Three Year Growth Plan

Topic

What are the key elements of the CIB's Growth Plan and how will it deliver benefit to Canadians?

Responsive Lines

• CIB's $10 billion Growth Plan aims to create jobs and promote economic growth by making infrastructure investments across the Bank's five priority investment areas:
  • Green – $2 billion through energy efficient retrofits
  • Public transit – $1.5 billion in zero-emission buses
  • Trade and transportation – $1.5 billion in agriculture irrigation projects
  • Broadband – $2 billion for connecting underserved communities
  • Clean power – $2.5 billion for renewable generation and storage and transmitting clean electricity.

If Pressed:

• The projected employment figure of 60,000 jobs is based on Statistics Canada's Infrastructure Economic Account model and reflects investment in infrastructure in Public transit, clean power, Green infrastructure, Broadband, Trade and Transport (agriculture), and in accelerating existing projects.
• The methodology for these estimates comes from Canada's system of macroeconomic accounts at Statistics Canada and includes direct jobs in construction of the infrastructure project, and the indirect jobs related to suppliers providing inputs to projects.
  

Background

Growth Plan

The Canada Infrastructure Bank (CIB)'s $10 billion Growth Plan aims to stimulate jobs for Canadians and strengthen Canada's economy through new infrastructure investments. By increasing levels of public and private investment in infrastructure, the CIB's Growth Plan will contribute to Canada's competitive, connected and resilient economy.

CIB plans to incentivize the building of new infrastructure that connects more households and small businesses to high speed internet, strengthen Canadian agriculture and help build a low-carbon economy. These investments will help Canadians get back to work.

The Growth Plan will invest in five major initiatives:

• $2.5 billion for clean power to support renewable generation and storage and to transmit clean electricity between provinces, territories, and regions, including to northern and Indigenous communities.
• $2 billion to connect approximately 750,000 homes and small businesses to broadband in underserved communities, so Canadians can better participate in the digital economy.
• $2 billion to invest in large-scale building retrofits to increase energy efficiency and help make communities more sustainable.
• $1.5 billion for agriculture irrigation projects to help the agriculture sector enhance production, strengthen Canada's food security, and expand export opportunities.
• $1.5 billion to accelerate the adoption of zero-emission buses and charging infrastructure so Canadians can have cleaner commutes.

To accelerate the delivery of projects in which the CIB intends to invest, it will also allocate $500 million for project development and early construction works.

2021 Statement of Priorities and Accountabilities

The updated Statement of Priorities and Accountabilities sent to the CIB on February 3, 2021 asks the CIB to target at least $1 billion in Indigenous infrastructure projects across its five priority investment areas. 

Growth Plan – Projected Impact on Jobs

The Growth Plan developed by the CIB is expected to create 60,000 jobs across the country.

Based on Statistics Canada's Infrastructure Economic Account model, an estimated 57,890 jobs are associated with a $10 billion investment in infrastructure in Public transit, Clean power, Green infrastructure, Broadband, Trade and Transport (agriculture), and in Accelerating existing projects.

The model does not account for labour market conditions, whether at the national level or more local levels.

P3 Models and Privatization

Topic

What is the public-private partnerships (P3) model? How is it different from privatization?

Responsive Lines

• A P3 is a long-term, performance-based approach to procuring public infrastructure where the private sector assumes a major share of responsibility for risk and financing, and the delivery and the performance of the infrastructure, from design and structural planning, to long-term maintenance.
• Privatization of public assets concern the sale of existing infrastructure assets.
• P3s are not privatizations. They are a long-term, performance-based approach to procuring public infrastructure where the private sector assumes a major share of responsibility for risk and financing, and the delivery and the performance of the infrastructure, from design and structural planning, to long-term maintenance.
• In P3s, the public sector retains ownership of the asset while benefitting from the experience, expertise and investment of the private sector. The public sector still controls the regulations and policies around assets.

Background

There are a variety of different P3 models that exist. Under a full lifecycle P3 model, the private sector is engaged to design, build, finance, operate and maintain an infrastructure project based on well-defined performance criteria over a fixed term. The public sector retains ownership of the asset.

P3s are not for every project. They are one of many tools in the public sector's tool box for delivering and managing major infrastructure projects. P3s work best for large, complex projects that appropriately transfer project risks to the private sector in a manner that delivers positive Value for Money.

A Value for Money analysis is a comparison of the present value of the estimated total cost of delivering a public infrastructure project using a traditional delivery model compared to the cost of delivering the project using a P3 delivery model. Using past projects as benchmarks, this analysis requires a detailed assessment of the various risks linked to the asset and identifies who is best placed to manage these risks – the public or private sector.

The P3 model was an important building block in the formation of the Canada Infrastructure Bank (CIB). The CIB is taking elements of the P3 model further by using revenue and user charges to fund the asset, in whole or in part, and transfer more revenue, usage and ownership risks to the private sector. This allows for equity to be shared with the private sector for a risk-adjusted rate of return.