Feds give Montreal rail project loan

INFRASTRUCTURE AGENCY HANDS $1.28 BILLION LOAN

A nascent federal agency designed to find new ways to finance construction of transit systems is making its first investment in a multibillion-dollar electric rail system in Montreal.

The Canada Infrastructure Bank will provide a $1.28-billion loan to help build the $6.3billion system largely managed and funded by Quebec’s pension regime, with interest rates rising from one per cent to three per cent over the 15-year term.

The loan frees up previously pledged federal money for the project, which can now be put towards other Quebec infrastructure plans.

The transit project, best known by its French acronym REM, had been singled out by the Trudeau Liberals as a potential early win for the financing agency, which was created last year to hand out $35 billion in federal financing in the hopes of prying much more than that from private backers to fund construction work.

About $15 billion may not be recovered, while the remaining $20 billion is in loans the government expects to recoup. The federal finance minister has to sign off on any financing requests.

The infrastructure bank’s first announcement has been many months in the works, even as critics have complained that the agency — and the government’s infrastructure funding more generally — have been slow to get off the ground.

The agency has yet to publish a list of projects it believes are ripe for private backing, but government documents show officials planned to work with provinces, territories and cities to form the list that would provide a five-year time horizon.

“What we said from the beginning is that the infrastructure bank would allow (us) to do more for Canadians and this is what we’re doing,” Infrastructure Minister Francois-Philippe Champagne told reporters at a cabinet retreat in Nanaimo, B.C.