Earlier in April, the federal government announced several changes to the leadership of the Canada Infrastructure Bank (CIB). Michael Sabia, the Director of the Munk School of Global Affairs and Public Policy and former CEO of Caisse de dépôt et placements du Québec (CDPQ), is now Chair of the Board.
The bank’s leadership changes, in the midst of the COVID-19 pandemic, signal a renewed orientation to privatization from the Canada Infrastructure Bank. Michael Sabia was involved in shaping the CIB’s privatization agenda, as part of Finance Minister Bill Morneau’s Advisory Council on Economic Growth, which advised on the formation and structure of the bank. Most recently, Sabia served as the CEO of CDPQ, which was the recipient of the first project that the CIB funded. Sabia was on the Advisory Council in the period that this deal was finalized.
The infrastructure deficit in Canada is significant and municipalities across the country have been calling for federal support for years. Addressing this gap presents an opportunity to revive the economy after COVID-19 through public investment in green projects like public transit, water and electricity, and support the transition to a low-carbon economy.
The federal Liberals promised to close the infrastructure gap in Canada through federal funding and low-cost borrowing and created the Canada Infrastructure Bank (CIB). However, instead of providing loans to chronically underfunded municipalities, provinces or Indigenous communities, the bank’s mandate focuses on attracting private investors in critical infrastructure projects through public-private partnerships.
“The COVID-19 pandemic has laid bare the damage of decades of gutted public services and privatization on our collective health and well-being,” said Council of Canadians Chairperson John Cartwright. “The government must learn from these mistakes and embrace public investments that will help workers and our economy get back on track.”
“Public-private partnerships are not the way forward,” said Vi Bui, Campaigner with the Council of Canadians. “These models ultimately end up costing taxpayers more by offloading risks onto municipal or provincial governments, cutting workforce and raising user rates.”
The CIB was established in 2017 with a $35 billion budget and a mandate to attract private investments to finance infrastructure projects. The bank has announced funding for nine projects, including public transit, regional rail, water, electricity and broadband. These projects include a loan from the CIB and involve private companies in the financing, construction and operation of major infrastructure projects.