Evidence of meeting #5 for Transport, Infrastructure and Communities in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ferries.
A video is available from Parliament.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
My question was the following. How did the minister react? What did he tell you?
Chief Executive Officer, Canada Infrastructure Bank
If I understand the question correctly, when the minister and I first talked about this, it was June. He asked me about the purchase, about the loan, and whether BC Ferries was buying from China, which I confirmed. He asked me what our role was in their procurement decision, and, as I outlined to you today, I said we didn't have a role in the procurement. I gave him some basic information on why we made the loan. Again, as I've shared with the committee today, just describing the benefits and why we made the loan, that was the nature of our discussion in mid-June, when we spoke.
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Did he say that it would be better if the loan weren't granted? Did he try to find out how to cancel it?
Chief Executive Officer, Canada Infrastructure Bank
Thank you for your question.
No, we did not have any discussion about cancellation of the loan. His questions really were just for better understanding—had we made a loan, in fact? He wanted to clarify the facts of the case and, secondly, make sure he understood the logic of why we made the loan and what our rationale was, and also to understand the timeline. I explained to him that we had made the loan in March.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
On June 2, Minister Mélanie Joly announced after a cross‑Canada tour that Canada's major national infrastructure projects would be carried out with Canadian steel and aluminum and that the government would help Canadian companies and workers in the wake of hard‑hitting American tariffs. Since then, have you received any instructions to ensure that the steel and aluminum used in projects funded by the Canada Infrastructure Bank are produced in Canada?
Chief Executive Officer, Canada Infrastructure Bank
No, I can confirm that we haven't had any directive. You heard from Minister Robertson today. I think, obviously, that policy-makers are thinking about how we encourage the use of Canadian supply whenever possible, while recognizing what we hear from project owners across this country, which is that if we want to build at the scale we aspire to, then we'll need to be flexible and part of global supply chains at the same time. Getting that balance correct, I think, is absolutely important.
The CIB will respond to any broader directive by government. They're our shareholder. Right now our mandate, as asked in one of the previous questions, is to get stuff built for the benefit of Canadians.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you. I think that you gave a clear answer to the question.
When the Canada Infrastructure Bank announced this $1 billion loan to BC Ferries for Chinese‑made vessels, did it cross your mind that this might somewhat contradict the government's statements in recent months? Were there any concerns about this matter?
Chief Executive Officer, Canada Infrastructure Bank
The CIB has a very clear mandate, which is to accelerate infrastructure investment in this country for the benefit of Canadians. We take our mandate seriously, and we deliver against it. That's our focus.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
There were no concerns or discussions about the fact that the government said that it wanted to prioritize Canadian steel and aluminum, while the Canada Infrastructure Bank was about to grant a $1 billion loan to build vessels in China using Chinese steel. Did it ever cross your mind that conflicting messages would be sent?
Chief Executive Officer, Canada Infrastructure Bank
From our perspective, the idea of each loan is to try to deliver maximum benefits to Canadians. It's up to each of our project proponents—from mining companies to ferry companies to broadband companies—to figure out their global supply chains in accordance with Canadian law, spirit, regulatory rules, etc.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
I'll go a step further. You made this announcement on June 26, after Parliament had adjourned.
Let's compare two projects in which the Canada Infrastructure Bank invested $1 billion. One is the modernization and expansion of facilities at the Montreal airport and the other is the BC Ferries project. We can see that, for the first project, the Canada Infrastructure Bank's press release includes a statement from the minister, while for the second project, it does not. Why?
Chief Executive Officer, Canada Infrastructure Bank
I'm not sure I have an answer to that question, but I would say that we're very proud of the investment at the Montreal airport. I will say to the member, again, that I have no insight into where that $1 billion will be sourced from. There will be tons of local construction and jobs, and there will also, no doubt, be global supply of some elements. I think every infrastructure project looks kind of like that in the country.
Liberal
The Chair Liberal Peter Schiefke
Thank you, Mr. Cory.
Thank you, Mr. Barsalou‑Duval.
Next we'll go back to Dr. Lewis.
Dr. Lewis, the floor is yours. You have five minutes, please.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Thank you.
In my community of Haldimand—Norfolk, we have a major steel mill, Stelco, that employs thousands and provides economic security for much of the region. Those jobs are at risk and those workers and their families are worried.
We are here today discussing the $1 billion of taxpayer funds going to create jobs in a foreign country, in part because of a decision by the Canada Infrastructure Bank.
Mr. Cory, I find that to be a very sad state for our infrastructure within Canada.
The Canada Infrastructure Bank was created by the Liberal government with the promise of delivering big, national building projects by attracting private investment. After a decade, it has failed in its mission. Despite tens of billions in public funding, the bank has completed just seven projects out of more than 100 it has funded. That is less than one per year. During the same period, it has poured millions into executive salaries, bonuses and insider contracts, while critical infrastructure across the country remains delayed, overpriced and abandoned.
Let's be clear that it isn't just about the BC Ferries scandal. It is a clear pattern of failure and mismanagement. The CIB's much-touted ability to attract private investment has never materialized.
It promises multiplier effects of four, five and six times each taxpayer dollar. Michael Sabia, who is a former CIB chair and now the Clerk of the Privy Council, claimed that every dollar would attract five in private capital. Later, he revised that down to two or three. This is very concerning.
According to the Parliamentary Budget Officer, most CIB funding still comes from taxpayers—federal, provincial and municipal. In the past three years, private sector dollars made up less than half. The PBO also confirmed that over half of the bank's funds still sit idle—not building anything and not delivering results. We do know that year after year, money goes into salaries and executive bonuses more than actual infrastructure.
The CIB has made questionable investments. The greening of a luxury hotel, an apartment retrofit where rents spiked, a high profile project like the $1.7-billion Lake Erie connector, and the $20-million Mapleton water project were all quietly cancelled.
It hides details of projects invested and has resisted even appearing before committee for important investigations like the one into the McKinsey connection to the bank. It has relied on Liberal-friendly firms like McKinsey, with little transparency.
With each misstep, the Liberal minister has conveniently denied any knowledge of responsibility—we heard that here today—for the bank's decisions, calling it arm's-length even though taxpayers are footing the bill.
Now the CIB is bankrolling BC Ferries' contract with a Chinese state-owned shipyard, sidelining Canadian workers and undermining our domestic shipbuilding capacity and steel industry at the worst time possible.
Worse still, the only reason we know of this—
Liberal
Will Greaves Liberal Victoria, BC
I have a point of order, Mr. Chair.
Is there a question for the witness? We're just hearing the member lecturing us all instead of taking advantage of the CIB presence.
Conservative
Liberal
The Chair Liberal Peter Schiefke
There's a point of order that I will address, colleagues.
Dr. Lewis, the first thing I'll say is that your time is stopped. You have one minute and 38 seconds left.
Mr. Greaves, members are free to use their time for questions or comments as they please, so I'll turn the floor back over to Dr. Lewis. If she'd like to use her time to make a comment, she's free to do so, or she can ask a question of the witness.
The floor is yours, Dr. Lewis.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Thank you, Mr. Chair.
Worse still, the only reason we know of the interest rate of 1.8%, which is well below market, is because BC Ferries disclosed it. It was not the Canada Infrastructure Bank nor the Minister of Housing and Infrastructure.
That tells you everything. Canadians are subsidizing Chinese industry and workers, not our own. The BC Ferries scandals should be the final straw. After reviewing the CIB's full track record, the transport committee should reaffirm its single, clear recommendation with regard to the bank, which is to abolish it.
Conservatives stand firmly by the recommendation to abolish the bank. It's time for the government to finally respect the committee's findings and put an end to the failed institution.
If Mr. Cory wants to address the steelworkers in Haldimand—Norfolk and the workers in Canada who don't have an opportunity to build these ships because that contract has gone abroad, he's free to do so in the time that I have left.
Liberal
Chief Executive Officer, Canada Infrastructure Bank
If we are to meet our ambitions as a country of building the infrastructure we need, the CIB is an important tool in that tool kit. It's far from the only one, but it's a real tool in that tool kit. It will benefit all of us as Canadian citizens by having the infrastructure we need to move around our country, having energy supplies in our country, and creating many, many jobs. The CIB is really proud of its track record of doing so across the country.
Liberal
The Chair Liberal Peter Schiefke
Thank you, Mr. Cory.
Mr. Lauzon, you have the floor for five minutes.
Liberal
Stéphane Lauzon Liberal Argenteuil—La Petite-Nation, QC
Thank you, Mr. Chair.
I would like to thank the witnesses for being here today.
The Canada Infrastructure Bank's mandate is to support projects that stimulate the Canadian economy. You explained that very well earlier. However, you are not responsible for companies that apply to have projects carried out elsewhere.
The situation involving the contract awarded to BC Ferries for the construction of its four ships has shaken us up a bit, given the current context and the crisis facing the steel and aluminum sectors. So it makes sense that awarding the contract to a Chinese company is disappointing to the Canadian market. Moreover, if BC Ferries' content requirements had been presented to you with a product manufactured in Canada, you would not even be here today.
Can you tell us how your organization has been analyzing this situation?
Do you still have some sort of power to provide recommendations? Can you ask what they are considering as part of their process?
We understand that BC Ferries has gone through three very important stages, namely pre-feasibility, design and tenders. During this process, were you consulted and did you make any recommendations?
Chief Executive Officer, Canada Infrastructure Bank
Thank you for the question.
It was a very thoughtful question, so I appreciate it.
When we enter into discussions with any borrower, including BC Ferries, our first focus is on the project benefits. That's all about, as I've talked about in my comments today, the service improvement, the cost of that service improvement and how you do that in the most affordable way possible for the users of the service.
Usually, including in this case, that starts before a procurement decision is made. As I said, that's very common in our projects. Let me answer your question with a sort of hypothetical. If BC Ferries tomorrow said, “We've changed our mind; we're buying them from Romania or Quebec,” our loan wouldn't change. It's because our loan is designed to benefit the users of the service and to make sure that the ferries can get into service quickly, cleanly and reliably, at the lowest possible cost to B.C. providers.
To your question, if the government wants to start to build strategic industries, let's say with shipbuilding, we have invested in Davie, Seaspan and Irving. If the government said that it wanted these ferries to come from Canada and said, first, to BC Ferries, “You must source from Canada,” we would support that. If that meant the ferries were more expensive, BC Ferries might say to us, “Well, you were going to make us a $1-billion loan, but our ferries are more expensive, so will you lend us more money?” Well, it's going to come back to, will there be an increase in the cost of the service to citizens again? The only way to pay back a loan is you have to charge somebody. However, if BC Ferries was willing to charge B.C. consumers more, we would make a bigger loan.
I'm giving you that example only to say that we are really not the drivers of the procurement decision. However, if BC Ferries made a decision around Canadian supply, or if there was a policy approach towards Canadian supply, we would support it indirectly by, potentially, the size of our loan being bigger if it could afford to pay it back.
Liberal
Stéphane Lauzon Liberal Argenteuil—La Petite-Nation, QC
Affordability is a very important fact that you have in mind when you take those decisions.
You clearly explained the board of directors' decision-making process, which was based on the needs of BC Ferries. In a spirit of collaboration, we are all saying pretty much the same thing, that we are somewhat disappointed. That said, Minister Mélanie Joly has let us know that she would like to organize a meeting with partners in the sector. You may be invited to attend.
What improvements could be made in the future? How could we say that we would like future ferries to be built in Canada? Where could we slip these requirements in? Is that up to our committee? It's a matter of political will.
Could you speak to that?