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Building the bank

Posted on April 6, 2017

As early details begin to roll out on the establishment of the Canadian Infrastructure Bank, an expert panel at GLOBE Capital provided its analysis of what its potential impact could be.

The opportunity to invest in Canadian infrastructure is a welcome one, according to Olivia Steedman of the Ontario Teachers’ Pension Plan. Steedman suggested that OTPP have long wanted to invest more in this country, and the bank has the potential to usher in the “dawn of a new era in infrastructure delivery.”

For Bruce Anderson, managing director for project finance and infrastructure at Manulife Financial, the potential for the bank surrounds the establishment of an infrastructure pipeline. That pipeline could provide the consistent investment climate his company is hoping for in Canada’s infrastructure industry.

On the contractor side, AECON president and CEO John Beck says that he welcomes the idea of an infrastructure bank, especially since it has the potential to be a “complimentary presence to what the provinces are doing today.” He also said that the bank has the potential to fill gaps and add layers to what the provinces are not currently covering, such as binational infrastructure, first nations projects, and asset recycling.

Revenue-generating only?

Moderator Laurie Mahon, managing director and co-head of global infrastructure and power in the global investment banking division of CIBC Capital Markets USA, asked about the suggestion that the bank would only be open to projects with specific revenue-generation attached, providing return on investment for the private funders.

Steedman suggested that since Canadians are used to heavily-subsidized infrastructure, a cost-of-service build up that includes an open dialogue with the consumer could be the best way to engage people on user fees. Anderson wondered if the discussion around user fees would scare away municipalities from engaging the bank, as they do not have the levers to raise the necessary cash for larger infrastructure projects.

The official structure of the bank is yet to be released, but the federal budget suggested that the bank will be operational by the end of the year. In the next few months, the speculation will come to an end, and the infrastructure will finally understand what role the bank will play.

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