New in­fra­struc­ture fi­nanc­ing agency to call Toronto home

The Hamilton Spectator - - BUSINESS -

OT­TAWA — Canada’s largest city is get­ting it­self a new res­i­dent this year: the head­quar­ters of the fed­eral gov­ern­ment’s new in­fra­struc­ture fi­nanc­ing agency.

Putting the bank in Toronto will give its mem­bers easy ac­cess to in­vestors in the city’s fi­nan­cial dis­trict whose dol­lars the Lib­er­als need to make the agency a suc­cess.

Que­bec Lib­eral MPs lob­bied pri­vately and pub­licly to have the bank’s of­fices lo­cated in Mon­treal, home to a light rail project be­ing fi­nanced by the prov­ince’s pen­sion fund which could be an early can­di­date for fund­ing from the fed­eral agency.

But the Lib­er­als ap­peared set on Toronto weeks be­fore Mon­day’s an­nounce­ment, af­ter private con­sul­ta­tions kept lead­ing back to the in­vestors along Bay Street.

“We be­lieve that the right ex­per­tise that is needed for the bank is present in this city,” In­fra­struc­ture Min­is­ter Amarjeet Sohi said at a news con­fer­ence at Toronto’s Union Sta­tion.

“The lo­ca­tion of the bank is im­por­tant, but the real value for the bank is the projects that it will fund, the projects that will be through­out the coun­try ... That’s where the job growth will hap­pen, that’s where the op­por­tu­ni­ties ex­ist.”

The Lib­er­als are also start­ing a search to find a chair for the agency’s board of di­rec­tors, the di­rec­tors them­selves and the chief ex­ec­u­tive of­fi­cer. Any­one is able to ap­ply for one of the ap­point­ments, but there are few peo­ple in­ter­na­tion­ally with the ex­per­tise and job ex­pe­ri­ence for the po­si­tions.

Sohi said the gov­ern­ment wants to se­lect the right tal­ent.

The gov­ern­ment ex­pects the agency to be up and run­ning by the end of the year.

The pro­posed bank would take $35 bil­lion in gov­ern­ment fund­ing to en­tice private in­vest­ment in projects like pub­lic tran­sit sys­tems, high­ways and elec­tri­cal grids that gen­er­ate rev­enues through user fees or tolls. Ap­prox­i­mately $15 bil­lion of that will be cash, with the re­main­ing $20 bil­lion in the form of re­payable loans or eq­uity stakes that the Lib­er­als say won’t af­fect the gov­ern­ment’s bot­tom line.

The Lib­er­als pre­dict they can lever­age three or four times the fed­eral in­vest­ment in private dol­lars for projects in three key ar­eas: trade cor­ri­dors, green in­fra­struc­ture and pub­lic tran­sit. Any project se­lected for the bank would have to gen­er­ate rev­enue and be in the pub­lic in­ter­est.

The agency will focus on build­ing new in­fra­struc­ture, not sell­ing off ex­ist­ing as­sets, Sohi said.

The plan to cre­ate the bank has come un­der in­creas­ing scru­tiny from out­side ex­perts and the op­po­si­tion par­ties, who ques­tion how much con­trol private in­vestors are be­ing given over the cre­ation of the bank and why the Lib­er­als would let rev­enue gen­er­ated by projects flow to private in­vestors, some of whom may be over­seas, in­stead of pub­lic cof­fers.

Sohi de­fended the gov­ern­ment’s plan, say­ing fed­eral money go­ing to the bank is a frac­tion of the over­all spend­ing in­fra­struc­ture plan. He also said that cities, prov­inces and ter­ri­to­ries will have the op­tion of us­ing the bank.

“We need to build even more in­fra­struc­ture in this coun­try and the bank is one way to do this,” he said.

The Lib­er­als plan to spend $81.2 bil­lion on their in­fra­struc­ture pro­gram over the next 11 years, in­clud­ing the money for the bank.

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