VIA Rail

[rbt]

Aaand the rationale for forming an investment bank to borrow money at somewhat higher rates to be used for the same purpose is ......... ??????

That's a great question actually.

I've been assuming it's the same rationale as Green Bonds in Ontario; debt by any name is still debt and accounting treats it the same as any other BUT sometimes calling it something different can work as a sales pitch to the general public.

 

[TOareaFan]

That's a great question actually.

I've been assuming it's the same rationale as Green Bonds in Ontario; debt by any name is still debt and accounting treats it the same as any other BUT sometimes calling it something different can work as a sales pitch to the general public.

Bingo!

 

[steveintoronto]

It seems to me you were so desperate to reach for sarcasm you made a point which is not even slightly true.

If what you meant was commuter services, you should acquaint yourself with train 651.

And what point is that exactly? That there's presently no service from Kingston in the morning that returns to Kingston in the evening that allows a day in Toronto for Kingstoners? The latest train one can take to return to Kingston leaves Toronto at 18:40.

Allow me to quote Kingston's Mayor Paterson (again):

[...]
The core of this plan is a new passenger dedicated rail line, and although this new rail line won’t run through Kingston, the overall effect on our city’s rail service will be significant. With this new rail line Kingston will be transformed into a regional hub for rail service in Eastern Ontario. Kingston is currently a midway stop between Toronto and Montreal, Toronto and Ottawa, and that means limited train schedules. Right now you can’t catch an early morning train from Kingston to Ottawa or a late evening train from Toronto to Kingston.

However, with Kingston as a regional rail hub, trains would start and end here, meaning far more convenient train schedules. For example, if you are in Kingston, you could catch an early morning train to Toronto, Ottawa or Montreal and then catch an evening train back. If you are in Toronto, Ottawa or Montreal, the same options of early morning and late evening trains would be available. Whether coming into Kingston or leaving, travel options by train would be significantly better.
[...]

https://mayorpaterson.com/2017/07/

Feel absolutely free to point out how the Mayor and the entire Council have this wrong.

 

[steveintoronto]

That's a great question actually.

I've been assuming it's the same rationale as Green Bonds in Ontario; debt by any name is still debt and accounting treats it the same as any other BUT sometimes calling it something different can work as a sales pitch to the general public.

Except for the assumption that the IB will be transacting in loans. It won't. It will be transacting in deals in which the Feds have a roughly 1:4 investment, and legislation that *shapes* the nature of the investment and the terms that go with it.

The Infrastructure Bank isn't to lend or borrow money. It's to partner in investments in infrastructure. It's a known and successful way of building infrastructure, and is active in many nations, the UK, US and Australia just to name a few, and Cdn Pension Funds are one of the largest participants.

As part of the Government of Canada's historic Investing in Canada plan, the Canada Infrastructure Bank is a new tool that our partners will be able to use to build more infrastructure in communities across Canada.

The additional projects the bank invests in will contribute to our long-term economic growth and support the creation of good, well-paying jobs for the middle class. These investments will also help us achieve our goals of lowering GHG emissions and building communities that are socially inclusive.

The Bank will be an additional tool to build new infrastructure development by attracting private sector and institutional investors to support the transformational infrastructure that Canadian communities need.

From green energy transmission to trade and transportation and beyond, the Bank will help public dollars go further by enabling us to invest in projects that deliver a return. This will keep our grant dollars for those projects, like affordable housing and community centres that require public dollars.

The Bank will invest $35 billion from the federal government into transformative infrastructure projects. $15 billion will be sourced from the over $180 billion Investing in Canada infrastructure plan, including:

• $5 billion for public transit systems;
• $5 billion for trade and transportation corridors; and,
• $5 billion for green infrastructure projects, including those that reduce greenhouse gas emissions, deliver clean air and safe water systems, and promote renewable power.

Specifically, the Bank will:

• Invest in infrastructure projects that have revenue-generating potential and are in the public interest;
• Attract private sector and institutional investors to projects so that more infrastructure can be built in Canada;
• Serve as a centre of expertise on infrastructure projects in which private sector or institutional investors are making a significant investment;
• Foster evidence-based decision making and advise all orders of government on the design of revenue-generating projects; and
• Collect and share data to help governments make better decisions about infrastructure investments.

The Bank will be accountable to Parliament through its responsible Minister. Specific accountability measures will include:

• Requiring the Bank to seek the Government's approval of its Corporate Plan annually, and tabling the plan as well as its annual report in Parliament;
• Audits by the Auditor General as well as a private sector auditor appointed annually by the Government, which is the highest standard of accountability required of Crown corporations; and,
• A review of the operation of the Bank by the responsible Minister and Parliament every five years.

As an arm's length Crown Corporation, the Bank will be led by a Chief Executive Officer and governed by a Chairperson and Board of Directors.

Frequently Asked Questions
1. Why are you setting up the Canada Infrastructure Bank? 2. What will the Canada Infrastructure Bank do? 3. How does the Bank fit into the Investing in Canada plan? 4. What types of projects will the Bank support? 5. What financial tools will the Bank have available to it? 6. How will the Bank support provinces, territories and municipalities? 7. How will the Bank be governed? 8. When will the Bank be operational?

http://www.infrastructure.gc.ca/CIB-BIC/index-eng.html

In the event, there's no guarantee that the funding for HFR will come through the IB, albeit special dispensation is *stated* to be in the works for that even before the bank is set-up. There's a clear possibility that investment will be offered (and a good chance by off-shore capital) to build the HFR RoW before the IB even gets a chance to fully vet and propose an investment shell in which they have influence. The concept isn't to borrow money to do this, it's to find partners to share in the cost, to the approx degree of 4:1, private to public.

This is the basic model presently used very successfully in other nations. From the FinPost:

Canadian pension funds urge Trudeau to think big on infrastructure: 'We're looking for projects of scale'
The funds say they need large projects like airports, toll roads and ports to justify their time and investment with so many global assets competing for their cash

Bloomberg News

March 16, 2016
12:52 PM EDT

Canada’s largest pension funds have advice for Justin Trudeau’s government as it prepares to double its infrastructure investments over the next decade: follow the Australian model and think big.

The funds, which manage more than $760 billion in combined assets, say they need large projects like airports, toll roads and ports to justify their time and investment with so many global assets competing for their cash.

“What are we looking for? We’re looking for projects of scale,” said Mark Wiseman, chief executive officer of Canada Pension Plan Investment Board, the country’s largest pension fund with $283 billion in assets.

The Canadian government isn’t expected to provide extensive details of its infrastructure plan in the March 22 budget because it’s still developing a long-term strategy. Federal officials have said an extra $10 billion will be made available over the next two years while it crafts a broader strategy to deploy an additional $20 billion to each of three silos over the next decade: public transit, green infrastructure, and social infrastructure.

The country’s largest pension funds, including Canada Pension Plan, Caisse de Depot et Placement du Quebec, and Ontario Teachers’ Pension Plan, are encouraging the federal government to be ambitious for the longer-term strategy.

Canadian pension funds and money managers have become global leaders by investing in ports, toll roads, power plants and other infrastructure, deploying billions annually as they reduce risk in their portfolio through geographic diversification.

http://business.financialpost.com/n...cale/wcm/7ad412cb-5bcc-4294-8a38-be48f8bf525c

There's a cautionary note to all of this: Just as Caisse has foregone tendering for REM* in Montreal (and the Feds have already granted a large chunk towards the investment) and handed it to Bombardier Rail, in which they have a sizable ownership, so can off-shore investors do same with HFR if they beat the IB to the punch. They can dictate that it be built with material from their own off-shore suppliers (albeit final fabrication in Canada might be required under Cdn content rules). And the Chinese, for instance, already have such a factory for the purpose in New Brunswick.

So what will Cdns say when faced with a gift horse? "No"? This is going to be proven interesting...

*REM:

Trudeau confirms $1.283 billion in federal cash for REM train
Jason Magder, Montreal Gazette
More from Jason Magder, Montreal Gazette
Published on: June 15, 2017 | Last Updated: June 15, 2017 8:12 PM EDT

http://montrealgazette.com/news/loc...ves-rem-closer-to-funding-6-million-price-tag

 

[kEiThZ]

Aaand the rationale for forming an investment bank to borrow money at somewhat higher rates to be used for the same purpose is ......... ??????

- Paul

That's a great question actually.

I've been assuming it's the same rationale as Green Bonds in Ontario; debt by any name is still debt and accounting treats it the same as any other BUT sometimes calling it something different can work as a sales pitch to the general public.

Exactly. The purpose of the bank is to provide political cover for:

1) Increase in liabilities for the federal government. Depending on the deals are structured, there could be significant increases in liabilities for the feds. They need another level of insulation. And without it, there's just no cover for higher spending. The Liberals would get lambasted at the next election for their massive deficits (though to be fair, some of it is deserved since not a lot is going to infrastructure....).

2) Increased participation of private and institutional capital. This is Canada. Where privatization is often a really, really bad word. In due course, many of these projects will be labelled as built by the CIB not the federal government per se. So that the feds get cover when investors maximize revenue. But those revenue opportunities need to be there to get significant institutional capital repatriated from the pension funds in particular. I don't think the Feds care about other foreign capital coming in, yet (for public sector projects...). The Chinese, for example, will never invest here. This isn't Africa where government sweeps aside all kinds of regulatory screening and human rights considerations for some infra investment.

3) Proper pricing of infrastructure. One major issue with government building anything is that people then expect to use that piece of infrastructure at very low cost. Often at costs below replacement even. Roads are a great example of this. Water, sewage, power infrastructure too. Setting aside privatization concerns, one huge issue is underpricing. I believe the CIB will have policies to address this, even where there isn't significant amount of private capital seeking a return.

 

[steveintoronto]

The Chinese, for example, will never invest here.

Chinese Investors To Spend $1 Trillion On Real Estate In Next Decade: Report
Toronto and Montreal have surpassed Vancouver as the biggest targets for Chinese buyers in Canada.
07/13/2017 13:07 EDT | Updated 07/14/2017 10:38 EDT

[...]The company predicts that Chinese investors will pour some $1 trillion (C$1.27 trillion) into real estate around the world over the next decade, of which a considerable amount is likely to land in Canada. The country is the fourth-largest destination for Chinese real estate investment, behind the U.S., Australia and Hong Kong.[...]

http://www.huffingtonpost.ca/2017/0...rillion-on-real-estate-in-next-de_a_23028408/

Canada welcomes Chinese investment in oilsands, minister tells Beijing conference
Natural Resources Minister Jim Carr says proposals would be considered on a case-by-case basis

The Canadian Press Posted: Jun 08, 2017 3:48 PM MT Last Updated: Jun 11, 2017 11:28 AM MT
As Natural Resources Minister Jim Carr explores avenues in China to expand foreign investment in the oilsands, his government is being accused of allowing Chinese takeovers of Canadian firms with little regard for national security.

Carr is on a five-day trade mission to China, pursuing partnerships and new markets for the energy and forestry sectors. The trip comes as the two countries pursue exploratory free trade talks, and the federal Liberals adjust their foreign policy to confront the headwinds of Donald Trump's "America First" doctrine.

• Canada pursues possible trade deal with China as softwood lumber dispute with U.S. heats up

Carr's message? Canada welcomes Chinese investment, including in the oilsands, he told a conference call from Beijing — a departure from the previous Conservative policy of keeping state-owned-enterprises (SOEs) out of Canada's energy sector.[...]

http://www.cbc.ca/news/canada/calgary/china-investment-oilsands-jim-carr-1.4152520

CRRC to build plant in Canada
By ZHONG NAN in Beijing and LIU MINGTAI in Changchun | China Daily | Updated: 2017-05-05 07:42

Workers assemble subway trains at CRRC Changchun Railway Vehicles Co in Changchun, Jilin province. WANG HAOFEI / XINHUA

China Railway Rolling Stock Corp, the country's railway vehicle and equipment manufacturer and exporter, announced on Thursday that it will build a plant in Canada to further expand its marketing channels in North America.

The train maker said in a statement that the new facility, located in Moncton in New Brunswick, will create more than 200 jobs in the first phase and generate more than $1 million in tax revenue for the local government annually. The plant is capable of manufacturing heavy load, special railway vehicles and railway vehicle brakes.

The plant was jointly set up by Sichuan-based CRRC Meishan Co Ltd, a freight train maker under CRRC, Moncton-based ARS Canada Rolling Stock Inc, a local railcar manufacturer and service supplier, and a CRRC subsidiary in Hong Kong. They gained approval from the Canadian government in June 2016.[...]

http://www.chinadaily.com.cn/business/2017-05/05/content_29211728.htm

I'd say the train has already left the station on Chinese investment into Canada...

 

[kEiThZ]

I guess some don't understand the difference between public sector and private sector investment. There's a reason they're complaining about our regs:

https://www.theglobeandmail.com/rep...astructure-regulations-envoy/article35585869/

It's hilarious that they think we'll cut those regs because of some belly-aching.

 

[steveintoronto]

I guess some don't understand the difference between public sector and private sector investment. There's a reason they're complaining about our regs:

https://www.theglobeandmail.com/rep...astructure-regulations-envoy/article35585869/

It's hilarious that they think we'll cut those regs because of some belly-aching.

[...]
Canada and China are engaged in exploratory talks towards a free-trade agreement and Lu expects any future deal would ease restrictions on bilateral investment.

China’s most-powerful business leaders have raised concerns about Canada’s regulations in the past.

Several members of the exclusive China Entrepreneur Club – often described as “the billionaires club” – have called on Trudeau to open up Canadian trade and investment even wider to the Asian superpower. [...]

You'll note that the major Chinese investor behind Moose Rail was in the pic with Trudeau's exclusive dinner engagement that raised hackles on the Opposition bench.

China-focused firm invests in Ottawa-area commuter rail plan
Bill Curry

OTTAWA — The Globe and Mail (includes correction)
Published Sunday, Jul. 16, 2017 8:11PM EDT


A Toronto-based condo developer that specializes in attracting Chinese capital for Canadian real estate is investing in a controversial proposal for a privately run commuter rail network throughout the National Capital Region.

Toronto’s LeMine Investment Group – which has developed condos in Toronto and Ajax – has agreed to spend $5-million on a 120-day study of the merits of a proposed 400-kilometre regional rail network that would connect several small communities outside Ottawa and Gatineau to the downtown core.

In an interview, LeMine chief executive officer Thomas Liu said what impressed him about the project is that it would provide supporting infrastructure that would benefit the public and be financed through the rising property values that would result from putting trains stations in outlying communities.

Related: Transport Canada reviewing studies on multibillion-dollar Via Rail expansion

“It’s a perfect combination,” he said. “That’s what’s amazing about this project.”

Mr. Liu has described his company as having a mandate to be the international investment platform for Chinese capital. Moose Consortium Inc. – the group behind the rail plan – expects major international capital will follow if the study goes well.

Mr. Liu’s name came up on the floor of the House of Commons in November, when the NDP raised his attendance at a small $1,500 Liberal Party fundraiser in Toronto to meet with Prime Minister Justin Trudeau. The questions were in the context of the cash-for-access controversy that led the Liberals to introduce reforms for campaign fundraising. Mr. Liu declined to discuss the fundraiser in an interview last week.

Mr. Trudeau and his government are actively encouraging large-scale foreign investment in Canadian infrastructure. [...]

https://www.theglobeandmail.com/new...tawa-area-commuter-rail-plan/article35703736/

[...]
The Globe and Mail has learned that wealthy Chinese businessman Zhang Bin who, with a partner, donated $1-million to the Pierre Elliott Trudeau Foundation and the University of Montreal Faculty of Law weeks after the fundraiser, also attended the event. Mr. Zhang is a political adviser to the Chinese government in Beijing and a senior apparatchik in the network of Chinese state promotional activities around the world.

Chinese Business Chamber of Commerce chair Benson Wong played host to Mr. Trudeau and 32 other people at his Toronto home. Among the donors was insurance tycoon Shenglin Xian, the founder of Wealth One Bank of Canada, and several Chinese billionaires.

At the time, Mr. Xian, president of Toronto-based Shenglin Financial Group Inc., was waiting for final approval from federal bank regulators for his Schedule 1 bank to start business in Canada. Schedule 1 banks are domestic, not foreign, and authorized to accept deposits in Canada.
[...]

https://www.theglobeandmail.com/new...er-with-chinese-billionaires/article32971362/

No security risks in Chinese takeover of Canadian satellite firm, Trudeau says

The deal has created unease among opposition MPs and congressional representatives in the U.S. about allowing Chinese firm Hytera Communications Co. Ltd. to have access to sensitive defence technology.[...]

https://www.thestar.com/business/20...-of-canadian-satellite-firm-trudeau-says.html

 

[kEiThZ]

I guess some don't understand the difference between public sector and private sector investment.

Unfortunately bears repeating. I don't get why people think real estate, resource sector or investment in an aerospace company constitutes public sector investment.

 

[steveintoronto]

Unfortunately bears repeating. I don't get why people think real estate, resource sector or investment in an aerospace company constitutes public sector investment.

Perhaps because the Infrastructure Bank and Canada in general are looking for private capital? Specifically, HFR for the RoW.

VIA Rail looks to private investment for $3-billion dedicated track plan
Eric Atkins
The Globe and Mail
Published Thursday, Jun. 04, 2015 6:38PM EDT

The head of Via Rail Canada Inc. brought his pitch for private investment to Toronto on Thursday, promoting a chance to reshape the money-losing passenger-train service.

Yves Desjardins-Siciliano told a room full of bankers, pension-fund managers and developers the $3-billion proposal to buy and build dedicated passenger train tracks in the busy Toronto-Ottawa-Montreal corridor could bring double-digit returns to a consortium of investors in the Crown corporation.

“We are striving to make Via Rail more relevant to Canadians … while not over overburdening Canada’s taxpayers,” Mr. Desjardins-Siciliano said. “A corollary to that may be a way for the private sector to put its shoulder to the wheel.” [...]

https://www.theglobeandmail.com/rep...billion-dedicated-track-plan/article24814969/

 

[kEiThZ]

The CIBs priority is probably repatriating Canadian pension funds home. They are some of the world's largest institutional infrastructure investors. Giving them opportunities at home is logical from the government perspective. Remains to be seen if they agree with that viewpoint.

Next on the list is probably firms like Blackstone. Heck, the Liberals consulted Blackstone. No known record of anybody seeking the opinion of the Chinese on setting up the CIB.

It'll be interesting to see if the Chinese are interested at all in public sector projects in Canada. They haven't invested much in European public sector projects either. They tend to prefer countries that are willing to treat regulations as flexible, for dollars. First world governments aren't exactly candidates there. Not to mention the quid pro quos often involved in megainfrastructure investment with the Chinese....

 

[waterloowarrior]

https://twitter.com/VIA_Rail/status/897518666870337536

@VIA_Rail
VIA_Rail Retweeted EOWC

Thanks @EOWC_ON for the discussions on #viarail plans for #HighFrequencyRail & better #rail connections across Eastern #ontario
@EOWC_ON
https://twitter.com/EOWC_ON/status/897453521502687236
Meeting @VIA_Rail President/CEO along w/ @cityofkingston to discuss proposed high-frequency rail project – great project for Eastern Ontario

 

[kEiThZ]

Man. VIA is really getting hopes up in Kingston. I am guessing they promised them some kind of DMU service long term. I hope they are making promises they can keep.

 

[cplchanb]

kingston in the grand scheme of this HFR plan means very little. They should be getting Ottawa, Montreal and Toronto FIRMLY on board with irrevocable cash to contribute until the completion of the project

 

[dowlingm]

And what point is that exactly? That there's presently no service from Kingston in the morning that returns to Kingston in the evening that allows a day in Toronto for Kingstoners? The latest train one can take to return to Kingston leaves Toronto at 18:40.

Allow me to quote Kingston's Mayor Paterson (again):

https://mayorpaterson.com/2017/07/

Feel absolutely free to point out how the Mayor and the entire Council have this wrong.

18.40 is the best option but for most people it is sufficient to do their business. Whether you think it is enough is your opinion. VIA scheduled 650 and 668 to carry home commuters - that's where they think the money is, clearly.

As for Mayor Paterson, I wasn't privy to the nature of the briefing VIA gave him. All I know is that the guy drew a straight line from Kingston to Ottawa. I'd love to see trains use a corridor from Kingston to Smiths Falls rather than use the Brockville route - I just don't see anyone planning to build such a thing.