OTTAWA — The Trudeau cabinet will have a say in approving infrastructure projects evaluated by a new agency designed to merge billions in public and private cash — even though it’s supposed to operate at arm’s-length from government.
The government’s goal is to make the soon-to-be-launched infrastructure bank as independent as possible when it comes to the governance and management of projects, Finance Minister Bill Morneau said Monday.
But Morneau said it’s also important that the government be able to protect the best interests of Canadians when huge projects are taken into consideration.
“We will always need to have some level of oversight,” Morneau said in Ottawa.
“We will need to have approval to make sure those projects make sense for Canadians, of course — but that the organization, the financing and the management of those projects will be left to the Canada Infrastructure Bank to execute.”
The infrastructure bank is central to the Liberal economic growth strategy and is designed to use $35 billion in public dollars as leverage to attract billions more in private investment for large projects — such as roads, bridges and public transit.
The bank, which will seek to entice private capital by offering investors steady returns through reliable funding mechanisms like user fees or tolls, has also come under fire from political opponents.
Rivals have heavily criticized the proposed Crown corporation, warning the agency will likely force Canadians to pay twice for their infrastructure — first through the public treasury and then through user fees that will generate corporate profits.
On Monday, Liberal ministers were grilled repeatedly about whether taxpayers would be forced to absorb losses from any bad loans through the bank.
“Why is the government taking billions of dollars of risk off the shoulders of wealthy billionaires and putting it onto the backs of Canadian taxpayers?” Tory MP Pierre Poilievre asked Infrastructure Minister Amarjeet Sohi during question period.
Poilievre grilled Morneau earlier in the day during a parliamentary committee hearing on who would repay taxpayer-funded loans if an infrastructure company were to go bankrupt.
Morneau pointed to Business Development Canada and Export Development Canada as examples of government organizations that have been successful in providing loans that have also generated returns for Ottawa.
“We’ll be relying on the expertise of this agency in order to make sure that they do this on commercially successful terms.”
The Liberals’ opponents have also accused them of giving global investors too much power over the agency’s blueprint — and, in particular, they have pounced on BlackRock Inc.’s involvement in the design process. BlackRock is the world’s largest asset manager.
Conservatives and New Democrats have been trying to frame BlackRock’s role as evidence that Ottawa’s new bank will put the priorities of wealthy investors ahead of taxpayers.
Reports last week said the government consulted BlackRock extensively about its plans for the bank, including whether or not the concept would resonate with its investors.
In November, Prime Minister Justin Trudeau participated in a summit hosted by the federal government that brought together some of the world’s most powerful institutional investors. They had a combined $21 trillion at their disposal.
Ottawa engaged BlackRock to invite its clients to the event as it tried to promote Canada as an attractive place to invest.
The Liberals have insisted BlackRock was among a broad range of stakeholders that were consulted, including municipalities, provinces, unions and industry.
A BlackRock spokeswoman said in a statement last week that any investments that may ultimately result from the summit’s talks would likely be made directly by an investor and wouldn’t necessarily include BlackRock or a BlackRock-advised fund.