New infrastructure bank CEO says first project will take time

The new chief executive of the federal infrastructure agency says it could be well into 2019 before it will be ready to announce its first investment.

The Trudeau government announced Thursday that Pierre Lavallee, a former senior executive of the Canada Pension Plan Investment Board, will be the first CEO of the Canada Infrastructure Bank.

The bank is a key component of the Liberal government’s longterm economic growth strategy with a mandate to use at least $35 billion in public funds to attract four to five times as much private capital to build revenue-generating public infrastructure projects such as pipelines, electricity grids and transit.

Lavallee said there is no deadline for making the first investment, but a lot has to happen before then.

“This is a startup, a very well funded startup,” he said. “So we need to hire people, we need to put in place the right investment decision-making processes, we need to identify the projects and we need to line up financial partners. All of that will take some time ... nine to 18 months perhaps.”

A spokesperson later clarified some of that work has started.

Lavallee said he has no comment on any particular project options, including the Kinder Morgan Trans Mountain pipeline.

However, if it could be up to a year and a half before the bank is ready to make its first investment announcement, the government won’t likely be able to turn to the bank to save the pipeline project if Kinder Morgan chooses not to go forward next week.

The company has set May 31 as a deadline to make a decision on whether to move on with construction of the $7.4-billion pipeline. The company has investment jitters because of B.C.’s bid to block it.

Finance Minister Bill Morneau said last week the federal government is willing to cover cost overruns caused by political uncertainty, but if Kinder Morgan pulls out, other investors are eager to step in. He did not say who they may be, but many have wondered if the infrastructure bank is an option.

The bank has been criticized by political rivals who argue it will boost corporate profits by forcing Canadians to pay twice for these projects — first through the treasury and then through user fees, such as tolls.

Some opponents have warned the bank will put the priorities of wealthy investors ahead of ordinary Canadians, whom they say will be stuck carrying too much of the risk.