Senators discuss removal of infrastructure bank from omnibus budget bill

theglobeandmail.com
By BILL CURRY
May 16, 2017

Senators are privately discussing whether they should split the Liberal government’s omnibus budget bill to spend more time studying the proposed Canada Infrastructure Bank.

Independent Senator Andre Pratte has circulated an e-mail to all senators asking them to consider removing the section creating the bank from the budget bill so that it “can be studied at length, as is justified by its importance.”

Liberal Senator Percy Downe, a former chief of staff to prime minister Jean Chretien, said in an interview Tuesday that he supports the suggestion from Mr. Pratte to split the bill.

“I think the infrastructure bank is a totally different matter [than the budget] and I think he makes a very valid argument that it needs what the Senate is here for: a very detailed study,” he said.

With a growing number of senators sitting as independents, the chamber has become less predictable. Some senators told The Globe and Mail on Tuesday that it was too early to say whether a majority of senators would support splitting the government’s budget bill.

As the senators weighed the issue, a House of Commons committee completed its one-day study of the legislation to create the $35-billion bank. The meeting was the only stand-alone committee study of the government’s plan. It was held in addition to the finance committee’s hearings on the budget bill as a whole.

The committee on transport, infrastructure and communities wrapped up Tuesday after about an hour and 45 minutes of presentations and discussion. The committee heard from four witnesses. Sergio Marchi, president and chief executive officer of the Canadian Electricity Association and a former Liberal cabinet minister, praised the bank and said it could help fund major upgrades of Canada’s electricity grid.

Azfar Ali Khan of the University of Ottawa’s Institute of Fiscal Studies and Democracy said launching the bank should wait until Canada has better data on its infrastructure needs.

Sarah Ryan, a senior researcher with the Canadian Union of Public Employees, said the bank will not be transparent and will end up costing Canadians more in the long run than if projects had been fully funded with public dollars.

Finally, Glenn Campbell, a senior public servant who is executive director of the Canada Infrastructure Bank Transition Office, spoke about the government’s rationale for the bank.

The NDP moved a motion at committee requesting a second meeting Thursday. The motion recommended that MPs hear from BlackRock, the world’s largest asset manager. The company worked closely with government officials to organize a Nov. 14 closed-door summit on infrastructure in Toronto that was attended by Prime Minister Justin Trudeau, senior ministers and BlackRock clients from around the world. The motion also recommended hearing from members of Finance Minister Bill Morneau’s advisory council on economic growth, which supported the Canada Infrastructure Bank in an October report. The Liberal majority on the committee voted to defeat the motion.

Conservative infrastructure critic Dianne Watts, a former mayor of Surrey, B.C., said the single hearing was clearly not enough time to study an entity that will play a major role in delivering infrastructure projects across the country for years.

“It’s ridiculous, because there are a lot of questions that are left unanswered,” she said after the committee meeting ended. “The government is shutting down debate on it. They want this rammed through and they’re hell-bent on just getting it up and running without proper due diligence.”

Liberal MP Vance Badawey, a former mayor of Port Colborne who represents the Ontario riding of Niagara Centre, said he and other members of the committee have municipal experience and understand why the bank is needed.

“We’ve been discussing this for quite some time,” he said, noting that the issue has come up in other committees and MPs can ask questions directly to federal departments. Mr. Badawey said the bank will mean the private sector will take on risks that had previously been entirely on the shoulders of municipal, provincial and federal governments.

In his testimony, Mr. Campbell, the senior government official, said some of the main benefits of the bank will be expertise in structuring loan guarantees and moving long-term debt off of government books and onto private partners, in exchange for a negotiated rate of return.

“The design of the bank is intended to relieve the burden on public balance sheets,” he told MPs. “This is a better way to fund more and different projects than otherwise would have [been built].”