44th Parl. 1st Sess.
October 26, 2023 10:00AM
- Oct/26/23 11:13:29 a.m.
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Madam Speaker, today we are debating the Standing Committee on Transport, Infrastructure and Communities' report on the Canada Infrastructure Bank. I am actually surprised that we are debating this today, because the committee released its report on the Canada Infrastructure Bank in May 2022, and here it is, fall 2023. It was tabled quite a while ago, and we had the opportunity to debate it well before now.
That said, there may be one thing worth talking about, and that is the recommendation in the report. That may be one of the reasons the Conservatives wanted to have this debate. In many cases, committees produce reports, study issues and make a number of recommendations. In this case, the report on the Canada Infrastructure Bank contained a single recommendation.
I would like to take this opportunity to mention that the Liberal member for Winnipeg North, who spoke before me and who speaks very regularly in the House, does not seem to have bothered to read the committee's report before giving his speech. He said that the Conservatives were against it, and he is right. However, he also said that the other parties should listen to him before taking a position. Perhaps he did not know that the other parties had already taken a position. If there was a committee report, it is because the parties took a position. If there were any recommendations from the committee, it is because the various parties took a position on this issue.
What I can say is that we produced a strong majority report and that the majority agreed on the only recommendation, which was to abolish the Canada Infrastructure Bank. Votes are secret; they are held in camera. How could we get a majority if the government disagreed? It is probably because all the other parties voted in favour of the recommendation. When the report was produced, everyone agreed that it was necessary to abolish the Canada Infrastructure Bank.
To gain a better understanding of what the Canada Infrastructure Bank is and of its raison d'être from the Quebec perspective, we looked at what cities, provinces and the federal government own, respectively, in terms of infrastructure in Canada. We wondered what role the federal government plays when it comes to infrastructure. In short, 98% of infrastructure does not belong to the federal government. Only 2% of infrastructure belongs to the federal level.
Why, then, is the federal government getting involved in matters of infrastructure? There is a fundamental problem here. Some $35 billion has been invested in the bank, but it is not up to the federal government to decide or to dictate to cities and provinces how they should manage their infrastructure, especially since it owns only 2% of infrastructure. It is our cities and our governments, including the Quebec government, that are in charge of infrastructure, so that is where the money should be going. Because of this basic principle, we thought it made no sense to support a federal infrastructure bank, which is ultimately a blatant intrusion in areas of jurisdiction that are not its own.
Nearly all of the witnesses were very critical of the infrastructure bank. The Liberal member who spoke earlier may not be aware of this, but I did not hear many witnesses praising the Canada Infrastructure Bank. In fact, I cannot name even one.
Perhaps the member knows this, because he has been in politics for several years now, but I want to mention that the Canada Infrastructure Bank was part of the Liberals' 2015 election platform. The Liberals could therefore say that they ran for election and put in place what was in their platform. I would like to take that one step further, however, and specify that the infrastructure bank that was put in place and the infrastructure bank that was in their election platform are a bit different.
On page 15 of the 2015 platform, it says that the Canada Infrastructure Bank would provide municipalities with lower interest rates on loans related to the construction of infrastructure and housing. That is interesting because we are talking about the housing crisis right now. However, we would be searching for a long time to find the word “housing” in the documents of today's infrastructure bank, because it is not there. As for the municipalities, the infrastructure bank also does not finance municipal projects at low rates. The Canada Infrastructure Bank's direction has changed over time.
After it took office, the Liberal government decided to set up the Advisory Council on Economic Growth to provide guidance on how to generate more economic growth in Canada. The advisory council was chaired by none other than Dominic Barton, who is known to be a close friend of the Prime Minister. We know that the Prime Minister likes to appoint friends to key posts, as we saw when he endorsed his buddies from WE Charity. I will come back to that later.
During his career, Mr. Barton has also held other positions. It is worth mentioning that he was head of McKinsey. It is also worth mentioning that the Advisory Council on Economic Growth looked into the idea of an infrastructure bank. In fact, that was one of its main recommendations in its first report.
Let us talk a little more about how the advisory council saw the infrastructure bank. I mentioned that Mr. Barton was chair of the Advisory Council on Economic Growth and that he also headed up McKinsey. I should also note that Mr. Barton surrounded himself with several people, including Michael Sabia, who would later go on to play a role at the infrastructure bank.
A board needs a secretariat, people to do the real work, to take notes and keep things running. However, this particular secretariat was not made up of federal officials. It was McKinsey that provided the employees to work on the advisory council's files on a volunteer basis. It was the McKinsey employees who supplied the discussion papers, who took notes on the discussions and who kept the secretariat running.
In committee, Mr. Sabia told us this about the role of the secretariat led by the McKinsey employees:
[McKinsey] essentially act[s] as a secretariat, on a volunteer basis. The concepts and suggestions came from the board members. As you know, an advisory board needs a secretariat, and McKinsey played that role. So they have been very involved in our reports and our deliberations.
Let us not forget that the McKinsey people were working on a volunteer basis. When he came to testify in committee, I asked Mr. Barton whether these people were volunteering for the government or for McKinsey. I asked him whether these people were paid. He said that they were paid by McKinsey, not by the federal government. However, the report was for the federal government. At the end of the day, they were offering pro bono services while being funded by McKinsey.
Was that work truly pro bono? Could it really be argued that McKinsey had no interest in the matter? For example, did it not have an influence over the direction the government took in terms of future economic growth?
The advisory council was designed to advise the government on economic growth, and it was McKinsey's people who had an opportunity to exert their influence. That is my conclusion, because when looking at the now notorious first report advocating for a Canadian infrastructure development bank, it is clear that they are no longer advocating for the 2015 version of the Canada Infrastructure Bank, but rather an infrastructure bank that takes public money and uses it to benefit the private sector, large multinationals and investment funds. They want us to bring the infrastructure projects to them. They say they will finance them. Basically, they want these big funds to participate so their money is poured into our infrastructure.
Clearly this idea has evolved quite a bit from the original one. It is interesting to see this change of direction. Whether we like it or not, the McKinsey people sort of steered the advisory council in that direction. Could it be that the McKinsey employees knew people who got contracts or money as a result? Was it their area of expertise? I think a lot of people already know the answer to that question.
Practically the only difference I saw between the version promoted by the Advisory Council on Economic Growth and the Government of Canada's version was $5 billion. The Advisory Council on Economic Growth recommended an infrastructure bank funded with $40 billion, whereas the government created one funded with $35 billion. Otherwise, they are almost identical.
Led by Mr. Barton, what the Advisory Council on Economic Growth proposed was quickly implemented. In fact, about a month after that was tabled, we were already reading federal government documents that referred to a future infrastructure bank created roughly in the image of the one proposed by the Advisory Council on Economic Growth. Global Affairs Canada specifically talked about it at the Long-Term Investment Summit.
Was this decision made in the best interest of the public? I do not know. What I do know is that the Canada Infrastructure Bank was a disaster. The Conservatives are talking about it today.
The CIB was founded in 2017 and, in 2020, there were virtually no projects in existence. It had no idea where it was headed. It had a hard time recruiting employees. The board of directors was a shambles. No one there spoke French. It was a madhouse. They did not know what to do with it. The CIB was given $35 billion, but they had no direction.
In a panic, they called up Dominic Barton. As mentioned earlier, he had worked on the Advisory Council on Economic Growth with Michael Sabia. Mr. Sabia was then recruited to become chair of the CIB.
In committee, I asked Mr. Sabia how he was recruited, who recruited him, whether he sent in his CV, how this all came about. He told me that he received a phone call from Bill Morneau. I just about fell over. We are told that the CIB is not political, but it was the Minister of Finance who called him directly to tell him that he had a job for him and asked him if he would accept it. Worse yet, it was not even his department. The CIB is not the responsibility of the Department of Finance. It is the responsibility of the Department of Infrastructure.
The minister for another department was calling to tell him he had a job for him. What a wonderfully open, democratic, transparent and apolitical process this was, to be sure. I am being sarcastic, of course.
Mr. Sabia told us that when he became chair of the CIB in 2020, it was not going well, that he was there to put out fires and rescue the CIB.
However, one of his first decisions as chair of the CIB was to award a sole-source consulting contract to McKinsey. Everything is falling into place. Maybe McKinsey's volunteer work paid off in the end. It was a $1.4‑million contract. That is pretty good money. One point four million dollars is nothing to sneeze at.
He gave us an explanation as to why McKinsey was chosen. I am sorry, the document is in English.
Mr. Sabia told us, “the decision taken at the time was to use some of the people from McKinsey who had been involved in the initial thinking around the Infrastructure Bank, to draw on their accumulated knowledge.”
In other words, given that McKinsey knew the CIB so well, it was awarded the contract so that things would go faster. Since McKinsey thought up the CIB, it obviously knew it very well. It had told the government what to do in the first place. McKinsey got the contract, but this time, instead of telling the government what to do for free, it was charging big money. It is as if McKinsey got a second chance to tell the government the same thing, because the CIB did not really exist yet and had not quite taken form—it was spinning its wheels.
It is fascinating to observe that the kind of volunteer work we are talking about is not always completely altruistic. It can sometimes serve private interests. The government does not seem to mind.
I asked Mr. Sabia more questions when he came to see us at committee. The CIB was clearly struggling, but before he became chair of the CIB, he worked at the Caisse de dépôt et placement du Québec and one of his projects was the REM. Well, the CIB just happened to invest in the REM. All this starts to get confusing because everything is all mixed together.
The CIB invested in the REM, but before the CIB was established, the federal government had had some money for the REM. The federal government had already invested in the project. It had received a federal grant of $1.28 billion that had been announced by the current government.
That $1.28-billion federal grant magically turned into a $1.28-billion loan. There is a slight difference between a loan and a grant. It started out as a government grant. It became a loan from the CIB. Obviously, Quebec did not really come out a winner because it will pay interest on the loan rather than taking the money to the bank and using it for the project.
I asked Mr. Sabia how that decision was made and what the process had been from one to the other. He replied, “That was a decision made by the government and...the government informed us of that change.”
The government claims that the CIB is not political, and yet it directly informed the Caisse de dépôt of the change. Essentially, the CIB had so little in the way of a track record and so few projects that the government said that it was going to take a project that it was financing, stop financing it and give the money to the CIB so that the CIB could establish a track record. That is basically what happened.
That shows that the CIB is not really useful. It is not relevant. The government is taking projects that would have received funding anyway and funding them through different means, through the CIB. The CIB should have been generating billions of dollars, but instead it is generating $1 for every $8 or $10. The government promised extraordinary numbers, a huge windfall, resulting from private investments from all of these great private firms that are close to the government, but in the end, these much-talked-about investments never happened. Most of the projects that the CIB invests in are public projects, projects by our own governments and institutions, whether it be our municipalities, our cities, our provinces or the Quebec state that we hope to be one day, projects that they want and that are important to us. To find a way to make the CIB relevant, the government decided to send those projects to the CIB, but then it claims that the CIB is not political and that it is far removed from government. However, we all know that the CIB is very political. After serving as chair of the CIB from April 2020 to December 2020, Mr. Sabia magically became the deputy minister of finance from 2020 to 2023. Surely, he submitted his resumé as part of a long, open process. I am sure of it. At a certain point, it gets to be too much. No one believes it any more. That is what I wanted to demonstrate.
Unfortunately, the CIB is a hot potato that the Liberals are trying to justify. They claim it is useful and serves a purpose. However, what the cities told us when they appeared before the committee, and continue to tell us every time, is that they need money to build infrastructure for housing, water and all the municipalities' other needs. They do not need new federal programs that come with all kinds of criteria and standards that no one understands. They do not want to be forced to hire three or four people to analyze criteria every time a new program comes out or have staff work full-time to keep track of any new programs launched by the federal government and assess their compatibility with Quebec programs. At some point it never ends. Cities want to be given money directly and use it to build the infrastructure they need.
We already have a program that works. Give Quebec money so Quebec can invest in infrastructure. It would be so easy, and it works every time. There is another approach we can live with. The gas tax fund works very well. It is not perfect, and it could use some tweaking, but, generally speaking, it works very well. Cities would like to see more money there. Part of the gas tax revenue could be allocated to infrastructure projects. Cities build the infrastructure they need, not what the federal government decides they need. That is different, and it works well. Why not enhance programs like that one, which offer more leeway, through agreements with Quebec for things like the gas tax fund? No, instead the government creates programs by and for Ottawa so it can have the ribbon-cutting ceremonies that party insiders want. At the end of the day, those programs do not work. They are a dead end.
That is what I wanted to lament today. I hope the member opposite understands now why all parties except his voted against this bank.
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Mr. Speaker, I listened to the member just now and before question period, and my primary concern is dealing with foreign interference, which, as I said previously, takes many different forms. What we are debating today is from an investor's perspective, and that is the reason we need to modernize the act after 14 years, given AI and technology, to protect our industries here in Canada and to make sure that interests here are served, first and foremost.
I wonder whether the member could provide his thoughts with regard to the passage of the legislation. Would the Bloc like to see any other things in the bill apart from the amendments we are debating today?
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