Mayor John Tory ‘thrilled’ to have new federal bank in Toronto

Mayor welcomes move to set up the new infrastructure bank in Toronto, while Opposition MPs slam the project for corporate influence

Thestar.com
May 8, 2017
By Alex Ballingall

Mayor John Tory welcomed the federal government’s decision Monday to set up its new infrastructure bank in Toronto, while the proposed institution was panned by opposition MPs for being unduly influenced by the Liberals’ corporate advisers.

The aim of the bank is to fund infrastructure projects - such as new roads and transit lines - with a mixture of public money and private investment. Infrastructure Minister Amarjeet Sohi said Monday that the bank, which will start up with $35 billion from Ottawa, could open its doors by the end of this year.

“The location of the bank is important but the real value from the bank is the projects that we will fund, the projects that will be throughout the country, across this nation,” Sohi said in his announcement at Union Station, adding that Toronto has the “right expertise” to help the bank succeed.

Tory told the Star he was “thrilled” by the decision to open the bank in Toronto, which represents a “real vote of confidence” in the city’s financial sector. The mayor had written to Prime Minister Justin Trudeau on April 3, urging him to set up the bank in Toronto because of its global connections through the banking and infrastructure industries.

“To me it is an opportunity for us to make sure we exploit that pool of talent, those pools of money, that experience, for the benefit of the entire country,” he said.

Tory said he is now working to identify transit and infrastructure projects in Toronto that could work with the bank, but said it’s too soon to say which ones could provide the revenue streams needed to attract private investment.

“We’re in a bit of a hole on (the transit) front, so I’ll be looking,” Tory said.

Jan Da Silva, president and CEO of the Toronto Region Board of Trade, also applauded the news as a “positive step” for the city.

Other cities, such as Montreal, were also hoping to become the new bank’s home. In a statement Monday, the president of the Chamber of Commerce of Metropolitan Montreal, Michel Leblanc, said he is “extremely disappointed” by the government’s decision to establish the bank in Toronto. Leblanc said all Quebec MPs should question their work on this issue.

In Ottawa, the bank’s planned mixture of public and private investment has come under fire, particularly after a report in the Globe and Mail revealed how the Liberals worked closely with officials from BlackRock, the world’s largest investment management firm, on how to pitch its bank to wealthy asset managers and pension funds.

The report also outlined how members of Morneau’s economic advisory council, which recommended the creation of a public-private bank for infrastructure, includes a high-ranking BlackRock executive and the head of Quebec’s pension fund that is seeking federal money for a transit project in Montreal.

Conservative interim leader Rona Ambrose was one of several Tory and NDP MPs to slam the government during question period Monday. Ambrose accused the government of working on behalf of the “rich” and said the work with corporate advisers represents a “blatant” conflict of interest.

“The problem is that these same wealthy and well-connected one percenters are the ones actually helping set up the bank,” she said.

“(BlackRock) is in the room to actually represent its clients. Why can’t the prime minister see this for the conflict that it is?”

Trudeau responded that the government plans to spend $180 billion on infrastructure, and that “drawing in on different sources of capital so people can get to work and home on time, so people can get their goods to markets, and creating good middle-class jobs is a priority for us.”

Sohi defended the bank, too, telling the House of Commons that the government also consulted municipalities, and unions and provincial and territorial governments about the bank - not just the private sector.

“By engaging private capital, we will free up federal government resources to build more affordable housing, to build more child-care facilities,” he said.

Sohi added that the bank will be accountable to Parliament and to the Canadian people. It would be set up like an arm’s length Crown corporation, and subject to audits by the auditor general and a government review every five years, according to the infrastructure ministry.

Now that the location has been announced, the next step for the bank is to recruit a board of directors and chief executive officer.

Legislation to create the bank is included in the Liberal’s omnibus budget Bill C-44, which is currently in its second reading in the Commons.