CIB: Boondoggle and Slush Fund
THE CANADIAN INFRASTRUCTURE BANK
Voters will recall that when I started campaigning for this nomination (in April, 2018!), one of my biggest concerns was this Liberal Government’s profligacy with our country’s finances – and our escalating deficit and debt balances – as if we have learned nothing from our economic woes a short 25 years ago. Taxpayers will be bearing this burden for at least a generation.
Canadian Infrastructure Bank
From both a financial and political perspective, the Canadian Infrastructure Bank is a Government boondoggle positioned to inefficiently dispense $35 Billion of Canadian taxpayer funds to projects that wouldn’t normally be funded. When I say ‘normally’, I am referring to a test that shows the benefits of the projects exceed their costs.
Canada’s public infrastructure does require advancements and upgrading. To meet this need, billions of dollars have been committed by all governments, and billions of dollars more have been raised in infrastructure funds – operated by a host of fund managers who understand the risk and reward characteristics of the projects. These people are accountable for ensuring that projects advance properly and on budget. The returns expected by the investors in these funds – for what are typically long-life projects (> 30 years) are competitively priced. In our current low interest environment, infrastructure funds invest in projects with a historically low return expectation. Cost controls are built into these investments from the start and managers are accountable. There is no shortage of investors available for these projects – so funds do compete to be part of the best projects.
Contrast that with the opaque regime put forth by this Liberal Government’s Canada Infrastructure Bank – where the risk / return relationship is meant to be an afterthought. That means projects will be funded that do not meet the scrutiny of a cost / benefit analysis. And given what this Government has shown us to this point – as it redistributes wealth as political favours from Canadian taxpayers to its voting base – we gain clarity on how these funds will be allocated.