Infrastructure bank will weigh risk: Sohi

PROJECT REVIEWS

questions about the agency and just how much public money will be on the line for transport, energy, and transit projects that could cross municipal, provincial and international borders.

“That is the review that the bank will do: is it too risky for the government to get involved? Maybe the government will not get involved,” Sohi said.

The Liberals see the bank as a way to use public dollars to leverage private funding for projects that are either too expensive or too risky for Ottawa or the private sector to go it alone. The government plans to fund the bank with $15 billion in cash from its long-term infrastructure plan and a further $20 billion in financing, the costs of which would be defrayed through project user fees or other revenue streams.

The bank is not exactly what the Liberals promised during the 2015 election.

The party’s campaign platform proposed using the government’s “strong credit rating and lending authority” to provide low-interest loans and “small capital contributions” to help provinces and cities build projects that lacked the necessary capital.

Sohi said the Liberals changed the concept of the bank because provinces didn’t want Ottawa to compete with or duplicate their own lending agencies that provide financing to municipalities.

Instead, the Liberals looked to woo private investors for financing help, enlisting the help of investing giant BlackRock to bring together deep-pocketed international investors last year. The government has refuted opposition charges that private investors have too much say in how the bank is being designed.

The auditor-general this week warned about the risk of outstanding federal loans, including $1.9 billion in loans, loan commitments and loan guarantees from Export Development Canada that taxpayers could be on the hook for if the loans are ultimately not repaid.

Sohi said the government wants to make sure deals are structured in a way to protect the public interest. If the project is unnecessary or not in the public interest, the government won’t fund it through the bank, he said.