Pearson airport hub a fitting project for Canada Infrastructure Bank: Metrolinx CEO 

TheGlobeAndMail.com
April 9, 2017
Bill Curry
 
Outgoing Metrolinx CEO Bruce McCuaig says Pearson airport’s ambitious plan to become a transportation megahub is the kind of project that Ottawa should consider as it seeks to lure billions in private capital into public transit projects.

Mr. McCuaig recently announced he is leaving Metrolinx after more than six years as president and CEO of the provincial transportation agency. He is taking on a new advisory role with the federal government as it launches a promised $35-billion Canada Infrastructure Bank.
 
In recent months, Pearson airport officials have been promoting a plan to raise billions for regional transit connections, including the possibility of a high-speed rail link through southwestern Ontario. A report that has not yet been released to the public estimates that private capital could help fund more than $12-billion worth of new transit, including a $6-billion high-speed rail line connecting Toronto and Windsor. One option to fund the projects would be to partially privatize the airport.

“What Pearson airport is proposing is a really important way to start to think about how do we build out the connectivity between Pearson, the rest of the transit and transportation network and the Greater Toronto and Hamilton area,” said Mr. McCuaig in an interview with The Globe and Mail. He said he was speaking on behalf of Metrolinx and not making any commitments as to what the infrastructure bank may or may not support. “I would certainly say it is a potential kind of project that would be of interest to look at what is the best way of delivering that so that you’re getting the infrastructure built as quickly as you can build it.”

The federal Liberals have high hopes for the infrastructure bank, which Prime Minister Justin Trudeau has said will be in place before the end of the year. The goal is to attract institutional investors like global pension funds to fund major infrastructure projects in exchange for an agreed-upon return or share of user fees. However, Ottawa has not yet launched a public competition for the CEO position, nor has it introduced legislation to establish the bank or decided on where it will be located.

Legislation is expected be unveiled soon. Once that is in place, the government will move to establish a board of directors for the bank. The goal would be to appoint a leadership team with a mix of banking and public policy expertise that would act at arms length from government.

Mr. McCuaig said he made the decision to leave Metrolinx and advise the federal government on setting up the bank because he was excited by the chance to shape what could be a very important national institution. He declined to say whether he would be interested in the CEO position.

Mr. McCuaig oversaw a major expansion of commuter rail during his time at Metrolinx. He also dealt with controversy over the rail link between Union Station and Pearson, UP Express, which opened to poor ridership in 2015 when it was originally priced to break even. Lower prices brought a major boost in riders, but the service now requires an ongoing public subsidy. Metrolinx has also been engaged in a bitter legal battle with Bombardier over a $770-million order for light-rail vehicles.

Mr. McCuaig will be working at the Privy Council Office with former Ontario Teachers’ Pension Plan CEO Jim Leech, who was appointed in February as a senior adviser. In a brief interview, Mr. Leech said he has no intention of applying to head the bank. He said the search for board members and CEO will begin shortly after the government introduces legislation to create the bank.

A small transition team of about a dozen public servants is currently working at Infrastructure Canada to set up the bank. The team is led by Glenn Campbell, one of several officials who came over from Finance. Responsibility for decisions related to the privatization of airports is currently separate from the transition team. Those decisions are in the hands of Finance Minister Bill Morneau and Transport Minister Marc Garneau.

Both ministers have said that no decisions have been made on whether to support the privatization of airports.

Hillary Marshall, the vice-president of stakeholder relations and communications, told the Globe that Pearson airport is “open to discussing many paths” for funding the megahub plan, including the review of airport ownership and the proposed infrastructure bank.

Mr. McCuaig said he decided to take the federal position because it is a rare chance to influence something that could make a big difference. “It’s a new concept for Canada and it’s a great chance to be in from the start on something that I believe will amplify the investments that are being made in infrastructure across the country,” he said.