National Post (National Edition)
New chair, no excuses for infrastructure bank
Catherine McKenna's reboot of the Canada Infrastructure Bank (CIB) is almost complete and she has recruited a heavyweight chair to replace Michael Sabia, who gave up oversight of the star-crossed institution when he was named deputy minister of finance in December.
Tamara Vrooman, chief executive of the Vancouver Airport Authority, has agreed to lead CIB's 10-member board of directors, ensuring that leadership will no longer be an excuse for failure going forward. McKenna, who took over as infrastructure minister at the end of 2019, is scheduled to make the official announcement on Thursday.
The appointment is a coup for McKenna. Vrooman, who led British Columbia's finance ministry in the mid-2000s when the province achieved a AAA credit rating, was on several shortlists for federal appointments.
It can be difficult to find accomplished women in finance, and, these days, it's difficult for Liberals to find accomplished Western Canadians willing to work with them.
In those regards, Vrooman is a godsend. She comes from a small pool of Canadian executives still in the prime of their careers who have leadership experience in both government and the private sector. She became the youngest deputy minister of finance in B.C.'s history when she was promoted in 2004, then became the first to take maternity leave. Vrooman left government in 2007 to lead Vancity, just in time to shepherd one of the country's largest credit unions through the 2008-09 financial crisis.
“She has the background that is really important for this time,” McKenna said in an interview. “What does that mean? We need to deliver.”
In other words, no more excuses. CIB, which was seeded with $35 billion in 2017 to partner with other deep-pocketed investors on longer-term projects that typically struggle to attract funding, has looked better on paper than it has as an actual financial institution. The bank spent only $1.7 billion in its first three years, and most of that was on a single light-rail project in Montreal.
Like Sabia, the former head of Caisse de dépôt et placement du Québec who got his start in Ottawa in the 1980s, Vrooman is an accomplished business executive with roots in public service. That should allow her to triangulate the priorities of bureaucrats and politicians with those of the institutional investors that CIB hopes to partner with in financing game-changing infrastructure projects, such as irrigation to boost competitiveness in agriculture and trade corridors that speed exports.
“I speak both languages,” Vrooman said in a separate interview, referring to her experience in both the public and private sectors. “There's a clear plan in place. There's a CEO with experience. We're well-positioned to execute.”
CIB's initial plan was less than clear. In effect, McKenna inherited a beta version of a new Crown corporation that was not ready for prime time, so part of the former environment minister's new job became fixing the infrastructure bank.
McKenna and her staff looked at governance, wondering if operational bugs were impeding performance. She recruited Sabia, who had retired from the Caisse after turning it into one of the world's biggest and most-respected pension funds, to put the weight of his reputation behind an overhaul of CIB's mission. Finally, in October, Ehren Cory, the well-regarded head of Infrastructure Ontario, was drafted to execute a new game plan.
“After a slow start, things have picked up,” Vrooman said. “Focus is key.”
High expectations explain some of the negativity that now hangs over CIB. As Vrooman said, “everyone wants infrastructure yesterday.” Prime Minister Justin Trudeau did too little to explain to the public that it takes time to build new Crown corporations from scratch, which was a costly mistake. CIB emerged as a political liability, an example of Trudeau's alleged weakness as a manager.
The Conservatives promised during the 2019 election campaign to kill the infrastructure bank, a pledge that helped them win the most votes, although not the most seats. The political controversy probably made it even harder to get money out the door, as it's unlikely investors were keen to partner with an institution that was only an election away from death.
But the bigger issue was governance. That is, the infrastructure bank was inserted into a system that was far too bureaucratic for an entity meant to work at the speed of international business. The bank had to submit a list of projects to the minister, and the minister then had to send that list to the Treasury Board for approval.
McKenna said she's close to signing off on a far more efficient process. The infrastructure bank would be given written instructions on the kinds of investments the government expects, and then the board of directors and chief executive will decide on their own how to deploy the money. Vrooman and Cory will be held accountable to the government and Parliament through an annual report.
That should work, provided politicians can discipline themselves to stay out of the way. McKenna suggested she's willing to do just that. “You don't want the government weighing in on every investment decision,” she said.
Vrooman's success will depend on it. “Accountability is now where it belongs,” she said.