News   Oct 16, 2019
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Globe: Federal Infrastructure Bank to Call Toronto Home

am29

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http://www.cp24.com/news/new-federal-infrastructure-bank-to-call-toronto-home-1.3403348

"
OTTAWA - Canada's largest city is getting itself a new resident this year: the headquarters of the federal government's new infrastructure financing agency.

Putting the bank in Toronto will give its members easy access to investors in the city's financial district whose dollars the Liberals need to make the agency a success.

Quebec Liberal MPs lobbied privately and publicly to have the bank's offices located in Montreal, home to a light rail project being financed by the province's pension fund which could be an early candidate for funding from the federal agency.

But the Liberals appeared set on Toronto weeks before Monday's announcement after private consultations kept leading back to the investors along Bay Street.

“We believe that the right expertise that is needed for the bank is present in this city,” Infrastructure Minister Amarjeet Sohi said at a press conference at Toronto's Union Station.

“The location of the bank is important, but the real value for the bank is the projects that it will fund, the projects that will be throughout the country. . . . That's where the job growth will happen, that's where the opportunities exist.”

The Liberals are also starting a search to find a chair for the agency's board of directors, the directors themselves and the chief executive officer. Anyone is able to apply for one of the appointments, but there are few people internationally with the expertise and job experience for the positions.

Sohi said the government wants to select the right talent.

The government expects the agency to be up and running by the end of the year.

The proposed bank would take $35 billion in government funding to entice private investment in projects like public transit systems, highways and electrical grids that generate revenues through user fees or tolls. Approximately $15 billion of that will be cash, with the remaining $20 billion in the form of repayable loans or equity stakes that the Liberals say won't affect the government's bottom line.

The Liberals predict they can leverage three or four times the federal investment in private dollars for projects in three key areas: trade corridors, green infrastructure and public transit. Any project selected for the bank would have to generate revenue and be in the public interest.

The agency will focus on building new infrastructure, not selling off existing assets, Sohi said.

The plan to create the bank has come under increasing scrutiny from outside experts and the opposition parties, who question how much control private investors are being given over the creation of the bank and why the Liberals would let revenue generated by projects flow to private investors, some of whom may be overseas, instead of public coffers.

Sohi defended the government's plan, saying federal money going to the bank is a fraction of the overall spending infrastructure plan. He also said that cities, provinces and territories will have the option of using the bank.

“We need to build even more infrastructure in this country and the bank is one way to do this,” he said. “The bank is one additional tool we are putting in our infrastructure tool kit.

“The vast majority of infrastructure will continue to be delivered by traditional funding tools.”

The Liberals plan to spend $81.2 billion on their infrastructure program over the next 11 years, including the money for the bank."
 

jje1000

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I thought it would have been a more decentralized thing, with offices in every major Canadian city and maybe a slightly larger office in Ottawa.

Not that the way it stands now would be bad for us.
 

Filip

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I thought it would have been a more decentralized thing, with offices in every major Canadian city and maybe a slightly larger office in Ottawa.

Not that the way it stands now would be bad for us.
You'd think. But the level of saltiness displayed by officials in Calgary and Montreal tells me this was a pretty big win/deal...
 

kEiThZ

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Given the way it is structured, who wouldn't want to be in a position to direct a pot of "arms length" money ostensibly meant for infrastructure/new builds?

AoD
Ugh. I would have thought the Conservatives would like the idea. It seems to totally align with them. Private capital investing in infrastructure. But now Bernier is proposing to kill it. We'll see what happens when they inevitably make it back to power.

On the other hand, were the NDP ever to gain influence or power, the bank would be limited to public capital, making it as good as dead since they'd effectively face borrowing limits.

The bank needs a quick win. And it can't be on a project that's local. I know they were thinking of REM first. But I think the bank would be far more defensible as an institution if they deliver VIA HFR. Especially if it goes west till London.
 

kEiThZ

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I thought it would have been a more decentralized thing, with offices in every major Canadian city and maybe a slightly larger office in Ottawa.

Not that the way it stands now would be bad for us.
Banks have to be where their investors are/capital is. They could still open field offices elsewhere. But that would be pointless. It's not a retail bank. It's essentially an investment bank. They only need to fly out a few times to review each major project proposal and do some ground research before financing a project. The field offices would be pointless. That said, I could see them opening some to pacify concerns about them being too Toronto centric. Vancouver, Calgary, Montreal and Halifax. Stick 5-10 staffers in each one and call it a day.
 

BurlOak

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With the federal Liberal record of corruption from the adscam days, and the complete mismanagement, waste and kickbacks displayed be the Provincial Liberals, whose people are charge of this, is there anyone who doesn't think this will be a slush fund and giant boondoggle?
 

AlvinofDiaspar

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With the federal Liberal record of corruption from the adscam days, and the complete mismanagement, waste and kickbacks displayed be the Provincial Liberals, whose people are charge of this, is there anyone who doesn't think this will be a slush fund and giant boondoggle?
Kind of like the G20 pot of gold from Tony Clement, you mean?

AoD
 

kEiThZ

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With the federal Liberal record of corruption from the adscam days, and the complete mismanagement, waste and kickbacks displayed be the Provincial Liberals, whose people are charge of this, is there anyone who doesn't think this will be a slush fund and giant boondoggle?
Be less of a boondoggle than Harper's economic stimulus which had no strategic priorities and simply aimed to largely blow cash in conservative held ridings.

Here's the thing. Investors care about maximizing returns and minimizing risk. They won't jump on to something without a business case. So other than VIA HFR, I largely see them doing utility work (water, electricity, wastewater).
 

MisterF

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Ugh. I would have thought the Conservatives would like the idea. It seems to totally align with them. Private capital investing in infrastructure. But now Bernier is proposing to kill it. We'll see what happens when they inevitably make it back to power.
For close to 50 years now prime ministers have tended to last at least two terms before the tide of public opinion starts to turn against them. Harper, Chretien, Mulroney, and Trudeau were each in office for a decade, give or take. Based on that history alone, Justin Trudeau will probably be in charge until well into the 2020s. As far as infrastructure goes, it's the provincial situation that concerns me more than the federal one.
 
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