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The head of a federal infrastructure agency says a new set of investing orders from the Liberal government should make it simpler to deploy more funding in the coming months.

The recent federal budget added to the Canada Infrastructure Bank's plate by requiring it to now spend public dollars on private sector-led projects like small modular reactors, clean fuel production, and carbon capture and storage.

Ehren Cory, the agency's chief executive, says officials have already had conversations with private sector players in the sectors identified in the budget about derisking some of the work with public funding.

The change in the budget was the latest in a string of tweaks for the agency that the Liberals created in 2017.

The agency's spring outlook notes that investments have jumped over the last fiscal year that ended March 31, with 20 of the 28 projects on the go finalized in the previous 12 months.

Cory says while he expects the pace of projects to stay at a higher clip, uncertainty from supply chains and global inflationary pressures are affecting project work.

"We're in a world where there are real challenges in supply chains and inflationary pressures in things like the construction market," he said.

"But in the areas where we're focused, that is why the private sector and engaging the private sector is so important, not so we can try and off-load a whole bunch of risk on them because that in the long run doesn't work, you know, but so you can share in those risks and create aligned incentives."

The Liberals infused the infrastructure bank with $35 billion in federal financing to pull in two or three times that in private dollars, arguing it would stretch Ottawa's capacity to fund the building of more roads, bridges, energy, water and wastewater systems.

New investing orders should make it simpler to deploy funds: Infrastructure Bank CEO

After a rocky start, the Liberals rejigged the agency's mandate in late 2020 to get more of the money out the door faster.

The agency's year-end figures show it has committed $7.2 billion of its money to the 28 projects on its books, pulling in $7.6 billion in funding from private or institutional investors and a further $6.1 billion from public partners.

The money the agency has committed is expected to come back to it in loan repayments, and Cory said repayments have already started. As the money comes back in, he said the money gets recycled into other projects that will stretch the agency's impact — even if not every project hits a three-to-one multiplier.

"You need to take each sector and take its fundamentals into account," he said.

"What we're ending up with … is our money leveraged multiple times over in real infrastructure projects, and since it's a loan, over time, that money will continue to work for Canadians."

The Liberals are hoping to use the infrastructure bank model anew, promising in the April 7 budget to create a similar financing agency to remove the risk for businesses to invest in new technology.

Cory sees a difference between his agency and the one proposed to be financed through $15 billion of existing, not new, federal funds.

Development of technology, the initial commercialization and building of a pilot factory, for instance, all happens upstream from the infrastructure bank, he said. He said his agency is mandated to invest in infrastructure at scale, not to ease innovation risks.

This report by The Canadian Press was first published April 27, 2022.

Keep reading

In the post-war era, the federal government used central bank financing to build highways, airports, schools, and hospitals. Prior to 1975, the federal government also introduced Canada-wide Medicare, universal pensions, the modern unemployment insurance system, and cost-sharing with provinces for higher education and welfare.

The federal government did not go cap in hand to global asset managers then, and should not today. Big money managers seeking maximum returns will charge monopoly rents but if things go sour, the government will inherit a mess.

Accountability and transparency are unlikely when private participation provides a pretext for confidentiality. The Canadian public will have far better powers with full ownership of infrastructure than as tied customers footing jacked-up bills.


1. How the Bank of Canada Creates Money for the Federal Government: Operational and Legal Aspects
Library of Parliament,

"By recording new and equal amounts on the asset and liability sides of its balance sheet, the Bank of Canada creates money through a few keystrokes. The federal government can spend the newly created bank deposits in the Canadian economy if it wishes."


".....there is no external limit to the total amount of money that the Bank of Canada may create for the federal government."

"The Bank of Canada's money creation for the Government of Canada is an internal government process. This means that external factors, such as financial markets dysfunction, cannot cause the federal government to run out of money."

2. Is Monetary Financing Inflationary? A Case Study of the Canadian Economy, 1935–75

> As shown in figure 1, between 20–25% of Canadian public debt was financed
> and held by the central bank and government from the end of World War II up to the early
> 1980s but inflation was below 5% right up until the early 1970s..............
> the period 1945–70....Federal government capital expenditure funded highways, airports, bridges,
> schools, hospitals, and other physical infrastructure.
> During the period 1960‒75, the federal government also introduced virtually all of the major
> policy innovations that make up Canada’s system of social programs: Canada-wide Medicare,
> universal pensions, the modern unemployment insurance system, and cost-sharing with the
> provinces for higher education and welfare.

3. The glorious gouging of the public purse
William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia

"The real problem with the PPPs in this regard is that is a falsehood that the risk shifts from the public to the private sector. Who ultimately bears the risk? The risk premium in private financing is based on the fact that a private entity can become bankrupt with its product and service exiting the market. With an essential public service it is a fantasy to say that the PPP contract transfers risk to the private sector.

If the private partner defaults, the public always has to pick up the pieces. There is no real risk transferred."

4. Thatcher – ‘Sorry You’ve Lost Your Job’

> ..what the “free marketers” promised would be an efficient, streamlined, low-priced economy has become the highest-priced economy in the world...... The telephones cost more, and nearly every kind of public utility that was privatized now costs much more, capped by railroad and bus service.