Infrastructure bank deals need input from Ottawa, says Borden
The man who played a lead role in drawing up the blueprint for Canada’s proposed infrastructure bank says the agency should not be completely independent of political oversight.
Cabinet needs to have a say in the selection of projects supported through the bank, which is designed to merge public and private cash for infrastructure, said Dominic Barton, chair of the government’s influential economic growth council.
The infrastructure bank is a key tool in the Liberals’ economic growth strategy. It’s designed to use $35 billion in public funds as leverage to attract billions more in private investment for large projects, such as rail lines, bridges and transit systems.
Last week, Finance Minister Bill Morneau said the federal cabinet will have powers when it comes to the approval of projects under evaluation by the bank. It’s important, he said, for government to protect the interests of Canadians when huge, multibillion-dollar projects are under consideration.
Barton, hand-picked by Morneau to lead the council, said the bank must also strike a balance between government and the market.
“I think the cabinet has to clearly play a role in saying, ‘OK, we like these priority areas,’ ” Barton, the global managing partner of consulting giant McKinsey & Co., said in an interview with The Canadian Press.
“But then in terms of how the actual projects are structured and set up, they can’t play a role in that. That’s got to be done on a market basis ... if we want to get some of the private capital to come in and help us be able to do more.”
Following Morneau’s remarks, the head of the infrastructure group for one of Canada’s biggest pension funds said he’s worried about the prospect of cabinet needing to sign off on some projects.
Andrew Claerhout of the Ontario Teachers’ Pension Plan told a Senate committee hearing this week that private investors like his fund will want to know whether they’re negotiating with the bank or cabinet ministers.
“That’s probably the thing that’s given me the most pause,” said Claerhout, whose fund holds about $18 billion worth of infrastructure investments around the world.
“I think there needs to be more clarity on what is desired with that because if it is that cabinet gets a final look, that’s very negative, in my view.”
He added he could probably “live with” a design that would give cabinet a first look at a project proposal and allow it to decide early on whether it will approve it, before negotiations begin.