THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, February 14, 2023
The Standing Senate Committee on National Finance met with videoconference this day at 9 a.m. [ET] to examine the Main Estimates for the fiscal year ending March 31, 2023.
Senator Éric Forest (Deputy Chair) in the chair.
[English]
The Deputy Chair: I wish to welcome senators as well as viewers across the country who are watching us on sencanada.ca.
This morning is a great opportunity to practise your French — we work more in French than English. To everybody, good Valentine’s Day.
[Translation]
This morning, we’re delighted to welcome the folks from the Canada Infrastructure Bank and Infrastructure Canada. This is very important to all Canadians. My name is Éric Forest and I am a senator from the province of Quebec, Gulf division, and deputy chair of the Standing Senate Committee on National Finance. I’m counting on your kindness to help me carry out this task. I would now like to go around the table and ask my colleagues to introduce themselves, starting from my left.
Senator Gignac: Good morning. Clément Gignac, Quebec.
Senator Loffreda: Tony Loffreda, Quebec.
[English]
Senator Pate: Kim Pate, and I’m from here in the unceded, unsurrendered territory of the Algonquin Anishinaabeg.
Senator Cardozo: Andrew Cardozo from Ontario.
Senator Bovey: Patricia Bovey from Manitoba.
[Translation]
Senator Moncion: Lucie Moncion, Ontario.
[English]
Senator Smith: Larry Smith, Quebec.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Dagenais: Jean-Guy Dagenais, Quebec.
The Deputy Chair: Thank you and welcome. Joining us are our clerk, Mireille K. Aubé, as well as Sylvain Fleury and Shaowei Pu, analysts from the Library of Parliament who are very helpful to the committee.
This morning, we resume our study of the Main Estimates for the fiscal year ending March 31, 2023, which was referred to us by the Senate of Canada on March 3, 2022.
Today, we welcome senior officials from the Canada Infrastructure Bank, Infrastructure Canada and Innovation, Science and Economic Development Canada.
More specifically, from the Canada Infrastructure Bank, we welcome Ehren Cory, Chief Executive Officer, and Evelyn Joerg, Chief Financial Officer.
From Infrastructure Canada, we welcome Nathalie Bertrand, Assistant Deputy Minister and Chief Financial Officer, Corporate Services; Glenn Campbell, Senior Assistant Deputy Minister, Investment, Partnerships and Innovation; Janet Goulding, Assistant Deputy Minister, Community Policy and Programs Branch; Gerard Peets, Assistant Deputy Minister, Policy and Results; and Erin Lynch, Associate Assistant Deputy Minister, Communities and Infrastructure Programs Branch.
From Innovation, Science and Economic Development Canada, we also welcome Douglas McConnachie, Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector; Colette Kaminsky, Associate Assistant Deputy Minister; and Eric Dagenais, Senior Assistant Deputy Minister, Spectrum and Telecommunications Sector.
Senator Yussuff has just joined us.
Welcome to all of you and thank you for accepting our invitation to testify before the Standing Senate Committee on National Finance. We will now hear opening remarks from Ehren Cory, Nathalie Bertrand and Douglas McConnachie.
Ehren Cory, Chief Executive Officer, Canada Infrastructure Bank: Thank you for the invitation, honourable senators.
[English]
I am very pleased to be here with you today. As introduced, my name is Ehren Cory. I am the chief executive officer at the Canada Infrastructure Bank. With me today, as mentioned, is Evelyn Joerg, who is our CFO.
Chair, I have had to practice pronouncing her name as well.
The Canada Infrastructure Bank, or CIB, is a federal Crown corporation that reports to Parliament through the Minister of Intergovernmental Affairs, Infrastructure and Communities. The purpose of the CIB is to invest in revenue-generating infrastructure projects in Canada that benefit Canadians.
We do this working closely with other levels of government, Indigenous communities and private and institutional investors to accelerate investments in projects that support economic growth, connect communities and contribute to Canada’s transition to a low-carbon economy. We invest in projects that reflect the priority sectors set out by the Government of Canada, which are public transit, broadband, green infrastructure, clean power and trade and transportation. We invest in projects across each of those five sectors. We also invest in these five sectors to close infrastructure gaps in Indigenous communities specifically across the country.
To update you on our progress, I am proud to report that as of the end of December 2022, the CIB has made investment commitments to 43 projects with a value of CIB dollars of $8.6 billion. Twenty-seven of those projects have reached financial close. These projects have a total capital value of $25 billion — that’s $25 billion of new investment in Canadian infrastructure that would not have happened absent the CIB.
These are infrastructure projects that deliver real benefits. They will result in annual greenhouse gas emissions reductions of over 4.5 million tonnes, nearly 300,000 more homes connected to broadband, about 175,000 more public transit riders each day, more than $60 million in annual agricultural value add to the economy and 26 Indigenous communities — and counting — with improved infrastructure.
To give you examples of what this means in real terms, it means new households connected to broadband in Southern Manitoba, new electric buses on the road in Edmonton, a new district energy system powering Richmond, B.C., new forms of reliable energy storage in Ontario and rail expansion in Northern Quebec and Labrador, among others.
It is important for me to distinguish the CIB from other government instruments. I’m here with colleagues today with whom we work closely. The CIB makes loans to projects — loans that are repaid with interest over the course of the project. Once we make a loan commitment, our loans are drawn down over the course of construction. Our money goes out as the project advances. As well, all our loans have measurable outcomes tied to them. For instance, if we lend money to a project to conduct an energy retrofit of a building, the interest rate they pay is tied to the level of energy efficiency that the building achieves. All of our borrowers must report to us on those outcomes and how they are achieved.
Our investment process moves a project from an investment commitment, which is when we sign a term sheet with our project and agree to general terms. At that point, a project owner has the confidence to develop their project knowing they have the support of a CIB loan.
Next, we move to financial close, where we sign loan agreements and the borrower can then draw on their money, make purchases and begin construction. Then our funds continue through the course of construction, and then we are repaid over the life of the asset.
In concluding my remarks, honourable senators, I want to take just a moment and talk about the complexity of infrastructure projects in our country. They involve multiple stakeholders, often across both public and private sectors, and can take years to go from inception through negotiation, deal structuring, financing, regulatory approval, permitting and then construction.
If you think of the largest projects in our country — the Trans-Canada Highway once upon a time, the Atlantic Loop today or high-frequency rail — they are projects that can take years in the making. While the road to building infrastructure in Canada may be at times challenging, it is critical to our ability to meet our climate goals, enhance our productivity and protect our quality of life.
Whether it’s investing in Canada’s electrical grid to support cleaner energy, building better transit to connect communities or building roads to critical minerals that allow us to reach export markets, we need new infrastructure and we need it now. Government can’t afford to pay for all of this infrastructure themselves. Our tax dollars are finite and so leveraging the private sector is an important part of the overall formula.
That’s where the CIB comes in and plays a unique role in accelerating infrastructure investment. We make investing in projects with public interest more attractive to private and institutional investors by using our innovative financing to de-risk projects. The CIB is just one tool in the toolkit which is why it makes such great sense for us to be here today with colleagues from Innovation, Science and Economic Development Canada that we work closely with and colleagues from Infrastructure Canada that we collaborate with on a daily basis. Having a tool like the CIB is an important part of accelerating infrastructure and one we have seen in many other countries. Australia, India, the United States, Norway, South Africa all have some version of an investment infrastructure bank.
With our 43 commitments made and over 40 more in the pipeline, I’m confident our momentum will only continue and I’m thrilled this means we are closing our infrastructure gaps and improving the lives of Canadians from coast to coast to coast.
That said, thank you.
[Translation]
The Deputy Chair: Thank you very much, Mr. Corey. I now invite Nathalie Bertrand to present her opening remarks.
[English]
Nathalie Bertrand, Assistant Deputy Minister and Chief Financial Officer, Corporate Services, Infrastructure Canada:
Thank you. As previously introduced, I’m Nathalie Bertrand, joined by my colleagues Erin Lynch, Gerard Peets, Glenn Campbell and Janet Goulding.
Our department continues to work hard for Canadians to invest in infrastructure that helps build strong communities, fight climate change and bolster the economy. I appreciate any opportunity to discuss our work and to update you about our accomplishments since we last met and our continued investment in a strong, inclusive and resilient Canada.
We work with all levels of government, as well as Indigenous communities and other partners. Those partners are helping us to bring to Canadians major bridge projects, zero-emission transit options, affordable housing and action toward the elimination of homelessness in Canada. We are helping to retrofit public buildings while also investing in new green and inclusive community buildings. We are investing in sustainable water and waste water and natural infrastructure. We are improving Canadians’ quality of life.
I am proud to be here to further discuss Infrastructure Canada’s 2022-23 Main Estimates. Infrastructure Canada’s 2022-23 Main Estimates called for $9.3 billion, with the majority of this amount, $6.8 billion, targeted toward grants and contributions. The remainder includes $242.7 million toward operating expenditures, $13.8 million toward capital expenditures and $2.3 billion in total statutory authorities mainly for the Canada Community-Building Fund, or CCBF.
The amount sought in the 2022-23 Main Estimates represents a net increase of $2.5 billion compared to the department’s 2021-22 Main Estimates. The majority of that increase represents grants and contributions funding. About one quarter of the grants and contributions increase is the result of an unprecedented level of new programming announced through the 2020 Fall Economic Statement and Budget 2021.
Programs to be delivered over the next few years include: Green and Inclusive Community Buildings; the permanent public transit program; the Natural Infrastructure Fund; work with provinces and territories to allocate funding under the Investing in Canada Infrastructure Program, including investment in ventilation through the program’s COVID stream; and a top-up to the Disaster Mitigation and Adaptation Fund.
[Translation]
The remaining three quarters of the grants and contributions increase is for existing programs such as the Public Transit Infrastructure Fund and the Investing in Canada Infrastructure Program, as well as Reaching Home: Canada’s Homelessness Strategy.
The increase in operating expenditures of $86.3 million includes resources secured to deliver new programs, as well as the mandated transfer to the department of responsibilities for the Homelessness Policy Directorate from the Department of Employment and Social Development, under the responsibility of Minister Hussen.
Statutory funding has seen an increase of $8.4 million, related to employee benefit plan requirements tied to the increase in operating resources, as well as the addition of the Minister of Housing and Diversity and Inclusion’s salary and car allowance.
Capital expenditures, meanwhile, represent a decrease in capital funding of $52.4 million compared to the 2021‑22 Main Estimates, due primarily to the sunsetting of funding in 2021-22 for the Gordie Howe International Bridge related to land purchases, and the Samuel de Champlain Bridge Corridor project.
Advancing our programming toward new projects has generated new excitement at Infrastructure Canada, and has been at the heart of a busy and productive year for our department. We are proud of the work we are doing for Canadians, and for the role we are playing in furthering a strong, sustainable and inclusive recovery.
I look forward to answering any questions you may have about our work and our commitment to Canadians. Thank you.
The Deputy Chair: Thank you, Ms. Bertrand. I now invite Mr. McConnachie to present his opening remarks.
Douglas McConnachie, Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector, Innovation, Science and Economic Development Canada: Thank you, Mr. Chair.
[English]
Honourable senators and officials, thank you for the invitation today to discuss the 2022-23 Main Estimates for Innovation, Science and Economic Development. I would like to begin by acknowledging that we come together today on the unceded traditional territory of the Algonquin Anishinaabeg people.
My colleagues have already been introduced, so I will jump into my remarks.
Mr. Chair, Innovation, Science and Economic Development Canada, otherwise known as ISED, plays a pivotal role in fostering business investment and enhancing Canadian innovation, supporting entrepreneurs and small businesses and driving growth in key sectors to prepare for new global challenges through major programs such as the Strategic Innovation Fund, the Canadian Digital Adoption Program and Innovative Solutions Canada, to name a few. To promote a green and sustainable economy, ISED is leading the implementation of the Net Zero Accelerator Initiative and other programs to support the development and commercialization of new clean technologies.
ISED also provides critical support for scientists and researchers in emerging areas such as artificial intelligence and quantum science and to ensure that Canada is ready to confront future public health threats.
[Translation]
The continued rollout of the Universal Broadband Fund will ensure that Canadians in rural and remote areas have access to high-speed internet for improved participation in the digital economy. Innovation, Science and Economic Development Canada’s support for the tourism industry through the Tourism Relief Fund in the new Federal Tourism Growth Strategy also promotes economic growth in communities from coast to coast to coast.
[English]
ISED is also leading the Rural Economic Development strategy, which will help reflect the needs of rural Canadians to make lasting and important changes to how the Government of Canada works to create the right conditions for rural growth, diversification and sustainability, such as transit solutions, mental health services and housing.
[Translation]
Mr. Chair, I would now like to provide a brief overview of ISED’s authorities as per the 2022-23 Main Estimates as well as the major increases that have been requested in the supplementary estimates.
The 2022-23 Main Estimates include $5.8 billion in total authorities, which represents an increase of $2.1 billion over 2021-22. This increase in funding is primarily attributable to new priorities that were announced in previous federal budgets as they relate to investments in the development of clean technologies, fostering digital adoption by businesses, on-the-job learning opportunities for post-secondary students and supporting Canadian businesses so that they can prosper in the knowledge-based economy.
[English]
The most notable increases to ISED’s authorities include support the Net Zero Accelerator initiative, $444.5 million. These investments will be delivered through the Strategic Innovation Fund to promote new technologies that will enable Canada to reduce its greenhouse gas emissions. To launch the Canada Digital Adoption Program, $424.0 million. This program will provide financing, tools and resources to help Canadian businesses adopt e-commerce platforms and implement digital transformation plans. For the expansion of the Universal Broadband Fund, $424.0 million. This funding will accelerate the rollout of high-speed internet in remote communities toward the objective of connecting 98% of Canadians by 2026. Contributions to Mitacs to expand work-integrated learning opportunities for post-secondary students, recent graduates and post-doctoral fellows in support of Canada’s economic recovery, in the amount of $170 million.
Mr. Chair, it also includes $124 million to support Sanofi Canada in the construction of a bulk influenza and pandemic vaccine manufacturing facility in Toronto. These investments will also be made through the Strategic Innovation Fund.
Finally, $107.3 million to support Canada’s innovative intellectual property-rich firms to ensure global competitiveness and help drive economic growth in the post COVID-19 recovery.
[Translation]
Moreover, Mr. Chair, ISED requested an additional $61.6 million in Supplementary Estimates (B) and $23.5 million in Supplementary Estimates (C) to enhance a variety of smaller grant-and-contribution programs. As a result of these increases, allocations from Treasury Board central votes and other technical adjustments, ISED expects to conclude 2022-23 with total authorities of $5.9 billion.
[English]
In closing, I would like to reaffirm the commitment of ISED to maintaining strong internal controls and reporting mechanisms to ensure the sound stewardship of the funds that have been entrusted to our care. We will continue to work with Canadians in all areas of the economy and in all parts of the country to improve conditions for investment, to enhance Canada’s innovation performance, to increase Canada’s share of global trade and to build a fair, efficient and competitive marketplace.
[Translation]
Mr. Chair, I would like to thank the committee for giving us an opportunity to discuss this matter with you today.
[English]
My colleagues and I will be pleased to answer any questions you have at this time. Thank you.
The Deputy Chair: Thank you very much for your statements.
[Translation]
We will now begin the question period. I wish to inform senators that they have no more than five minutes in the first round and no more than three minutes in the second round. I would ask you to ask your questions directly, and the witnesses to answer quickly, because there are many of us and the subject is fascinating. The clerk will notify me when your time is up.
[English]
Senator Marshall: Thank you for being here today. My first questions are for Mr. Cory on the Canada Infrastructure Bank, otherwise known as CIB. I’m interested in two areas: your growth chart, which shows $35 billion by 2028; and, the level of private investment.
First, the investment term you use in your annual report is $4.9 billion. On your financial statements for 2022, there’s $1.4 billion. However, when you look at the rate of growth in the annual report, it’s really an accelerated rate of growth over the next several years and it’s not convincing. It doesn’t look feasible. I would like to hear your comments with regard to how you’re going to get there by 2028.
The other area I’m interested in is the level of private investment. I was on this committee when the legislation for the Canada Infrastructure Bank which was brought forward by former Minister Morneau. We had an opportunity to question him. He continued to say that they were projecting $4 to $5 of private investment for every dollar from the Canada Infrastructure Bank. His emphasis was on the private investment. I notice from your annual report that there is a shift from private investment to institutional and private investment. Actually, most of the investment — not from the Canada Infrastructure Bank but from the institutional investors — contains little of what I would consider private investment. There has been a big shift.
We were promised $4 to $5 for every dollar. Now, however, in your annual report, you’re looking at $1 to $1, and it’s no longer the Canada Infrastructure Bank $1 to $1 of private investment. You’ve linked in private investment with institutional investment, so it’s been watered down.
Why don’t you start with the private investment? I’d be interested in that. How did the bank get from what former Minister Morneau committed to, namely $1 to $4 or $5, to $1 to $1 with an emphasis now on institutional investment? How did you get there?
The other question I have is this: Why didn’t the private sector investment materialize? What happened? What forced you to shift? There must be a reason. Have you done any work on that? Can you start with that premise? Why is there a shift from $1 to $4 to $1 to $1?
Mr. Cory: Absolutely. Thank you very much for the question, senator. Let me take it in the order you asked.
First, it’s really important to talk for a second about what we mean when we talk about private and institutional capital, as you mentioned.
Our view is that bringing in dollars from outside the tax base is really important. Finding ways to leverage the private sector is important. “Institutional capital” refers to the large pension funds in Canada, the Caisse de dépôt in Quebec, the Ontario Teachers’, or the CPPIB, who are investing in infrastructure assets all over the world and haven’t historically been investing in Canada. This is not a change. From the start, the goal of the CIB was to bring those dollars into infrastructure projects.
Private and institutional capital are lumped together because although institutional capital has a slightly different definition, they both have the same benefit to Canadians. That’s money that we don’t use from the tax base to pay for infrastructure projects. It grows the total pie of what we’re building. For us, that’s absolutely success. We view private and institutional capital together as a pot.
Senator Marshall: Even if you look at those two sources as a pot, you’ve still gone from $1 to $4 down to $1 to $1. That’s the issue there.
Mr. Cory: Let me take that part of your question. This is a really important question, and it’s one we do get asked a lot.
At the start of every project, our job is to figure out why it’s stuck and what is the least amount of money we can put in to get it unstuck. Usually, a project is stuck because of two things: Cost or it’s really risky. So we’re putting in taxpayer money to make it happen.
There are two ways to think about private capital. One is how much comes in the day we make our loan. Let’s say there is a $100 project and we lend $50 and the private institutional capital is $50. That’s the one-to-one you’re referring to. That’s what happens at the start of the project. But then we get paid back. Ours is a loan. Unlike a grant, the $50 that we’ve put in gets paid back. We put that money into the next project and the next project. So the private capital ratio is going up over time as our money goes into future projects.
What former Minister Morneau originally said to you, the concept of an infrastructure bank and of that $4 to $1 leverage, is still where we’re headed in the long-run. As we keep putting our money in, we will continue to see our capital used on projects and more and more private capital attracted to it.
Senator Marshall: But it’s — my time is up?
The Deputy Chair: Sorry, senator. Your time is up.
Senator Marshall: Put me on second round.
The Deputy Chair: Yes. I will put you on the second round.
[Translation]
Senator Gignac: I’d like to welcome our witnesses and thank you for what you are doing to provide Canada with 21st-century infrastructure and bring up potential GDP. I will continue in the same vein as my colleague Senator Marshall.
Mr. Cory, you took stock of the number of projects, and investment commitments of $8.6 billion, but you said that represents a total of $25 billion in investments in Canada that probably would not have happened without the Canada Infrastructure Bank. That is a key sentence. Therefore, that brings us back to the idea that if you weren’t here, these investments would not be made.
Here’s my question: Is that because you’re taking on a much higher level of risk than pension funds and other institutions would be willing to accept? Can you back that up, and continue to answer Senator Marshall’s question on my time?
Mr. Cory: Absolutely — thank you for the question. I’ll continue in English so I can better describe my points.
[English]
I really appreciate the question because I chose those words on purpose when I said, “Those projects would not happen without us.”
Let me give you an example because in your question you hit on the most important thing, which is about risk.
Infrastructure projects have long lives and a lot of uncertainty around them. Let me use a real example about developing electric vehicle charging infrastructure in our country today as a private investment — I’m talking about what we call level 3 chargers — along highways and in public places, not in people’s driveways. If you were doing that as a business, it is really uncertain what the rate of vehicle adoption of EVs is, how quickly the supply chain of electric vehicles is going to catch up to demand, how quickly consumers will start changing and how much people are willing to pay to get a charge when they are going from home to work or to their cottage.
Private investors would like to be in that space, but if they were doing it on their own, they might do a charger and see how it goes for a few years. Then five more, and see how it goes. It is a very slow process.
As a country, we have very ambitious goals around electric vehicles. What CIB are saying to private developers is that I will make you a loan not to go one charger or five chargers or ten a year, but to do 1,000 next year. You don’t have to start paying me back until the utilization of the chargers is high enough that you are starting to make some money. If that takes two or five or seven years, our terms are quite flexible.
Now, ultimately taxpayers are going to be paid back. We’ll take that money and put it into the next project, which could be electric vehicle charging somewhere else in the country, but it could also be broadband or any of our other sectors. That money is going to work on the next infrastructure projects and bring in the next round of private capital as we get paid down. But that risk taking is what is going to allow us to get more chargers built faster. It is the same story with district energy, battery storage, hydrogen or clean fuels. Each of these has a similar problem of a lot of uncertainty or risk in the next 10 years or so. Over the long term, they are going to be very good investments. I think the private sector is going to profit from them. As they start to profit, they will pay us back. Our interest rate will increase as they start making money. Our payment terms also accelerate, so that we get paid back. We will take that money and put it into the next project. I hope that answers your question.
[Translation]
Senator Gignac: Yes, thank you, that does answer my question.
I don’t know if you had read the report by the Parliamentary Budget Officer, who appeared before our committee and expressed doubts about your ability to fulfill your mandate to deploy $35 billion over 11 years. Should we expect a significant acceleration over the next few years? It’s already been four years — since the beginning of your tenure, unless I’m mistaken — and I’m curious to hear your reaction.
[English]
Mr. Cory: This comes back to the question about the $35 billion, so thank you for bringing me back to Senator Marshall’s question.
We are accelerating significantly. If you were to look in the first few years of the CIB, we had fairly few investment commitments. Now our most recent year that ended last March 31, we had about $4 billion in investment commitments. If we keep going at the rate of $4 billion or $5 billion a year, we will get to the $35 billion by 2027-28 of investment commitments.
This is really important because there is a timing lag between signing loan agreements. We signed loan documents. We have committed that money. But the projects draw that money as they construct. We don’t make transfer payments or anything like that. We are a lender. They must provide receipts and show construction progress because we are paying for the outcome of the infrastructure.
There is a lag between when we sign an investment commitment and when the dollars are spent as the appropriation happens. Our draw of money will often lag by three to five years because construction of large infrastructure projects — as senators will know — typically they take somewhere in the four to five-year time frame.
The moment we sign an agreement, we provide an estimate to our colleagues at the Department of Infrastructure and, of course, the Department of Finance of what the draw to have dollars is going to be. But it’s true that draw lags by several years. The Parliamentary Budget Office, or PBO, was looking at the cash out the door and saying — looking at our expected draw — you are not going to have drawn $35 billion in appropriations, but we will have made firm investment commitments, loan agreements that are committed dollars.
Senator Smith: Mr. Cory, the Canada Infrastructure Bank is expected to receive an additional $1 billion to support Indigenous infrastructure projects across five priority areas which were defined in 2021.
Having been to Nunavut and having learned about the complex nature of building and maintaining infrastructure in Canada’s remote and northern regions, including often a very narrow building season or limited building season, higher costs of materials and lack of skilled labour. I would like to understand how the bank is working through some of these challenges and ensuring the projects meet the needs of the community but are also maintained.
Mr. Cory: Thank you, Senator Smith, for the question. We are proud of the progress we are making on Indigenous infrastructure. We have a long way to go, so I appreciate your question.
I had the pleasure last week of meeting in Ottawa the premier of Nunavut and a number of the development corporations of the territories, which was great to share notes on their priority projects and where the CIB can be helpful.
Our country is vast and the infrastructure needs are vast, especially as we look forward to an open trade route in the Northwest Passage, as we look at critical mineral exploration and development, as we think about how to bring the North and remote communities clean power and economic participation in the green transition, because as the premier said to me, we need to get off diesel, but we also have a huge opportunity to be a supplier of clean power to the rest of Canada coming south. It works both directions.
I think Nunavut has great ambition about being more connected with wires, transportation links and with broadband. Our goal is to invest in those projects.
You asked the critical question about project selection. The answer is the CIB is a lender. We lend to our borrowers to deliver on their infrastructure priorities. I don’t dictate. The CIB doesn’t dictate. Canada doesn’t dictate the infrastructure needs of British Columbia or Saskatchewan or Nunavut. We work together with them to understand their needs. Every Indigenous community is quite different. For some, their biggest challenge is getting off diesel. Others, their biggest challenge is getting wastewater treatment facilities that work. Our job is to partner with each of them to meet their infrastructure needs.
Senator Smith: When we were up visiting Nunavut, they were talking about defence and what’s going to happen with Russia and China, but the people are saying it is important to worry about getting ourselves in a defensible position, but what about the basic infrastructure that we need; water, roads, base infrastructure that is lagging in terms of getting done?
Behind all of that is once you get these types of projects completed, you have to have the trained people to make sure they maintain this operation. Is the federal government and the ministers’ departments close to dealing with you in talking about how these projects can be properly supported so they are properly implemented?
Mr. Cory: I’ll let Mr. Campbell speak in a moment from the Infrastructure Canada, or INFC, perspective.
For each of our projects, when we are partnering with someone, we are supporting their projects, so we don’t dictate how they should deliver it or to whom. But I will say this, for every project, part of our due diligence is understanding what their strategy for the supply chain and what their strategy for labour capacity are, because we are an investor and expecting to make a loan and get repaid. Part of that is understanding after you build it, how will it be maintained?
If you heard my story about electric vehicle charging, we get paid back by those chargers working for 15 to 20 years. That means there has to be a maintenance plan and they have to be reliable because customers will stop believing in chargers if you pull up to them and the system is down, which has been a problem historically.
I use that example only to say, as the CIB, we care about getting new infrastructure built, but our repayment actually depends on the asset operating. To your point, although it is not our role to dictate the labour strategy of the project, it is our role to ask questions about how they are going to sustainably maintain the infrastructure.
Mr. Campbell: Mr. Cory mentioned two points earlier. One is a collaboration with parts of the government. The other was just one tool in the toolkit.
As Ms. Bertrand outlined, a suite of programs exists — not just at Infrastructure Canada but across the portfolio, including ISED, for broadband, for example. We have been collaborating with all jurisdictions to find out what their priorities are and where there are shared priorities. Then we try to align, where there is no wrong door, whether it is a project that is suitable for financing and investment in an innovative way, like the Canada Infrastructure Bank, or whether it is designed more for a grants and contributions program with one of our ministries. There is a lot of that kind of collaboration. We are trying to align the right instrument.
Speaking of the CIB, we rely heavily on their ability to advise, help structure and then often help determine if the CIB or another tool is better to meet that challenge.
Senator Loffreda: Thank you to all our witnesses for being with us this morning.
In the past, the National Finance Committee has questioned the Canada Infrastructure Bank about the timeliness of certain transactions and projects. In the 2022-23 to 2026-27 corporate plan, the bank has established a $500-million target for project acceleration efforts, which includes expedition of due diligence and planning and development activities.
Could you speak more about your project acceleration and how this effort will help achieve your goal of shortening critical paths to construction and delivering infrastructure faster?
Mr. Cory: Thank you so much for the question. It is an important one.
As senators may know, in the fall of 2020, the CIB created what was called our Growth Plan. As the senator noted and as others have noted in their questions, in the first few years of the CIB’s existence we did a lot of important work in, I will say, priming the pump.
Large infrastructure projects often take long periods of development. To pick an extreme example of some form of higher-speed and higher-frequency rail in the Quebec-Windsor corridor, I have read studies from the 1970s that talk about that project.
Infrastructure projects are often stuck in planning and development for long periods. In the first few years of the CIB, we did a lot of good groundwork in terms of talking to municipalities, provinces, territories, Indigenous communities and private sectors about projects and about building our pipeline of projects.
However, we realized there was a real problem — like my extreme example — of projects that were stuck in planning and diligence. They had a bit of a chicken-and-egg problem going on: We would like to do the regulatory approval work, but before we can do that, we need to understand how many users of the system will there be? What will the revenue potential be? What is it really going to cost to build? You can go in a loop and spend years in that loop.
In the fall of 2020, the idea of our Growth Plan was to say that the CIB is going to set aside money, $500 million, to invest in unsticking those projects — co-investing usually; it’s not our money alone but with a province, territory or private-sector company — to explore those key questions: What the real cost of the project is going to be, and then getting the regulatory approval started. Sometimes ordering long-lead items is the bottleneck to a project.
I’m pleased to say that has been leading us to real results. For instance, we have worked with multiple governments on transit projects to try to better understand, especially in a post-pandemic world, what the ridership of the transit will likely be and what the development potential in and around the transit is, which is also private capital that could come into the projects. We’ve been doing that sort of work to hopefully unstick even more of these projects. That’s what the accelerator money is for.
Senator Loffreda: Thank you. With respect to progress and transparency, would it be possible to start including project progress assessments in the results section of future reports so that Canadians can have that information readily available?
Mr. Cory: That is a really good question. The CIB is still a young institution. Senator Marshall’s question speaks a bit to the growth curve that we’re on.
The CIB was created in 2017. Our first employees started in 2018. Kind of like when a snake swallows a mouse and it goes through the body, we are now getting to the point where, for instance, in Edmonton, all the buses that we purchased have been brought and are on the road; or in Manitoba, where the first 10,000 homes are now being passed with high-speed internet in rural communities in southern Manitoba that didn’t have it.
We are now getting to the point where projects are coming out the other end of the snake. Terrible analogy, I’m sure. The point of that story is that we are building what we call our asset management capabilities, part of Ms. Jeorg’s team, which is that once loans have been made, we track their progress and outcomes and manage the repayment of the loans.
Yes, senator, I think you will continue to see more and more transparency from us on that in years to come.
Senator Loffreda: Thank you.
[Translation]
Senator Dagenais: My question is for Ms. Bertrand.
Ms. Bertrand, I have a hard time understanding why a project like the Canada Infrastructure Bank has a variable budget. When you establish a budget, you make it happen rather than playing with the numbers along the way. As you know, the government is having trouble getting a full budget for the current year to us for approval. That’s what we understand thanks to the Parliamentary Budget Officer. You will understand if I’m skeptical of the veracity of the numbers submitted to us.
If the Infrastructure Canada project is what you say it is and it’s spread out over an 11-year period, until 2028, therefore, should we expect annual budget adjustments for every year to come?
Ms. Bertrand: Thank you very much for the question.
I believe we can refer to our Investing in Canada Infrastructure Program that was spread out over an 11-year period. Infrastructure Canada is experiencing similar pitfalls as the Bank of Canada on —
[English]
There are sometimes a few delays in projects, or projects that are initially thought to conclude within a certain number of years but don’t, for various reasons. We are talking about multi-billion-dollar projects with complex procurement strategies. There are delays that are due to the Canadian weather and global supply chain issues.
It is important to understand that once a project is approved, the economic activity can start immediately and the project can start. We reimburse only once recipients submit claims. Sometimes there are delays between construction of a project and when Infrastructure Canada reimburses it.
Naturally, we want to commit funds to projects. It is important for recipients to understand that even though the project does not necessarily always conclude on time, any funding that has not been spent in the years we thought it would be spent is reprofiled to future years to make sure that funding is available to the recipient once the project is completed.
[Translation]
Senator Dagenais: Now I have a question for Mr. McConnachie.
The internet rollout projects in remote areas — particularly in the Arctic, where it seems security deficiencies have become apparent in the past few days — appear to be having trouble coming to fruition. In some cases, are investments being made in projects that are not going to happen, and if so, which projects? Could you give us a sense of what projects are under way and how long it will take for them to come to fruition?
Mr. McConnachie: Thanks for the question. I will let my colleague Mr. Dagenais respond.
Eric Dagenais, Senior Assistant Deputy Minister, Spectrum and Telecommunications Sector, Innovation, Science and Economic Development Canada: Thank you. To date, 250 projects have been announced. They are being funded by the Universal Broadband Fund. A few of them are in the Arctic territories. For now, all initiatives are moving forward. To my knowledge, none has been withdrawn. Our goal is to have 98% of Canadian homes connected at 50/10 speed by 2026. Based on the projects identified to date, we’re confident that we will meet that goal and even surpass it a little bit. Does that answer your question?
Senator Dagenais: In your budgets, why are investments in broadband and high-speed internet in rural and remote areas, among others, not kept separate from the rest? Wouldn’t it make more sense to have it all in one place, because you know how IT projects can sometimes be complicated and expensive?
Mr. McConnachie: Thank you for the question, senator.
I believe it’s really a matter of terminology when we talk about broadband and high-speed projects, and yes, it’s always the Universal Broadband Fund, which Mr. Dagenais just talked about.
Mr. Dagenais: There may be two parts because there is also the Connect to Innovate program.
Initially, we had the Connect to Innovate program, which connected homes and is now coming to a close and then there was the Universal Broadband Fund. The same team manages both funds so there is some integration on that front.
[English]
Senator Bovey: Thank you all for your presentations.
I want to pick up on a couple of thoughts that have been put on the table that we haven’t looked at.
Ms. Bertrand, you mentioned climate change as a goal, the issues of climate change and bolstering the economy. You have mentioned quality of life. You have mentioned the Canada Community-Building Fund. Mr. McConnachie, I think it was you who mentioned tourism and the tourism growth strategy. I contend that the cultural infrastructure is critically important to reach all those goals, and more, and those of reconciliation. What funds have you provided for cultural infrastructure, museums, galleries, theatres? I know many of these organizations have been in touch with you, and I am well aware of ones that have not had the courtesy of a reply, let alone money. I also know that Infrastructure Canada does have a cultural stream. I wonder if the Canada Infrastructure Bank does, or Innovation, Science and Economic Development Canada, as I believe your programs are — and the work of these organizations throughout our communities are absolutely critical for both reconciliation and tourism growth. I was part of an international panel on Saturday talking about culture and climate change. I think the goals and abilities are big.
If you do have funds for these, how much has been invested, and what kinds of projects have been funded? If not, I would like to know why not. Perhaps, Ms. Bertrand, we could start with you. If there is time, Mr. McConnachie or Mr. Cory can answer those comments.
Ms. Bertrand: I’ll turn this over to my colleague, Erin Lynch.
Erin Lynch, Associate Assistant Deputy Minister, Communities and Infrastructure Programs Branch, Infrastructure Canada: Thank you very much for the question.
So we have a suite of programs that support different objectives, and one is through our Investing in Canada Infrastructure Program. There are five streams, and one is for culture, community and recreation that is targeted for allocations across provinces and territories toward those objectives and has funded a variety of projects.
We also have our Green and Inclusive Community Buildings Program, which is targeted at funding public infrastructure of our community buildings with a target of energy efficiency and meeting our climate objective goals toward net zero. Those are two of our key programs that are investing in those areas.
Senator Bovey: If I can dig a bit deeper. I’m well aware that the projects I have in mind, have addressed those concerns. Do you get in touch with people who have made applications? Because I’m aware that several have not had replies, not even a “No, thank you, you don’t qualify”; just not a reply at all. If we are really talking about improving the quality of life in our communities — I can also tell you with the projects I have in mind, they have more than met their commitments for the private sector funding, and we talked about stuck projects for costs, for example. These projects are stuck because the chicken-and-egg game hasn’t been played, even though — in one case I can think of, it was three years ago they met their public contribution. I wonder what your protocols are as you receive these requests. Why is it difficult for people to meet with you? They don’t need to come and meet with me. I don’t have the purse strings. Can you fill me in on some of that so I can get back in touch with them and tell them what they need to do next?
Ms. Lynch: Thank you very much for the question. Absolutely, we do try to engage with stakeholders and applicants, and I’m sorry to hear that some have had challenges in that regard. For example, with our Green and Inclusive Community Buildings Program — that’s a direct application — we work directly with recipients who provide their applications into the department. We have a team there who does stakeholder outreach, meets with any potential applicants, walks them through the process. We hold webinars to provide information. In fact, we launched an intake, a few months ago, that will close at the end of February in that regard. We have had about a thousand participants at our webinars to get information out, as well as meeting with and answering questions for hundreds of individuals. We do have contact information on our website. People should feel free to reach out there and engage with our staff in that regard.
For programs like Investing in Canada Infrastructure Program, those are allocations through the province and territories; so they are the ones who submit the project to us. That being said, we are always happy to meet and discuss with any potential stakeholders or applicants.
Senator Bovey: Have you thought of the applications not coming from the provinces? Because so often the provinces — and I have headed those institutions for years — so often the provinces wait for a federal commitment before they are going to commit. That’s where a lot of these projects get stuck in the chicken-and-egg game. I wonder if there are ways to review that. I know cities are told they can put in one or maybe two projects. Demands are great. There are some nuances there that I think are critically necessary.
Ms. Lynch: Absolutely. Thank you for the question.
We do have our Investing in Canada Infrastructure Program, which I mentioned is through the provinces and territories. We also have a suite of direct application programs where Indigenous organizations, municipalities and communities can apply directly to Infrastructure Canada, so it is providing that direct application for their programs. That’s our Green and Inclusive Community Buildings Program. Our Disaster Mitigation and Adaptation Fund, our Rural Transit Solutions Fund, these are examples of funds that are open right now addressing just that.
Senator Pate: Thank you very much, all of you, for being here.
I want to thank Infrastructure Canada in particular for providing — we received last October 28 responses to the questions that a number of us asked, including on homelessness and particularly Indigenous homelessness and the link to sustainable development goals. Thank you very much for those responses.
The Auditor General of Canada, as you know, released a report in November around chronic homelessness, and one of the observations made was that although Infrastructure Canada had invested about $1.36 billion between 2019 and 2021 on preventing and reducing homelessness, there was no knowledge whether homelessness had actually increased or decreased as a result of the investment. I understand that lag, which has already been explained, but I’m curious what Infrastructure Canada is doing to ensure that you are addressing the findings not only of that audit, but whether other steps are being taken to address homelessness or whether other steps are being taken by the Canada Infrastructure Bank in that respect.
I have a follow-up question as well so you can provide a fulsome answer. Budget 2022 also included several initiatives based around homelessness and allocated funds to conduct research on measures that could further eliminate or eliminate altogether chronic homelessness. I’m curious how that research has impacted the work you are going to be doing, how it has impacted the investments that will be made and what further research you believe needs to be conducted to assist in that process.
Ms. Bertrand: Thank you so much, senator, for the question. My colleague Janet Goulding will be taking that question.
Janet Goulding, Assistant Deputy Minister, Community Policy and Programs Branch, Infrastructure Canada: Thank you, senator, for the question.
Yes, in terms of the OAG audit, the Auditor General was pointing to the fact that at the time of the audit, we had not collected all of the data concerning the results of the program. The data collection was delayed because of the COVID-19 pandemic, and the way we collect our data is from our community organizations that are providing services to the homeless community directly.
Since that time we have received over 98% of the data that was outstanding at the time of the audit, and we know that 32,000 people were placed in more stable housing in the first two years of the program. Over 62 people received homelessness prevention supports, such as rental assistance and landlord-family mediation. Almost 19,000 received income assistance, over 4,500 began new job training programs, over 7,000 people started new paid employment, and over 4,500 began a new education program as a result of the funding. Half of that $1.36 billion went to COVID-19 response measures, so we know as a result of that, for example, almost 18,500 temporary accommodation spaces were created as a response to COVID-19, and that resulted in over 136,000 instances of placements in temporary accommodation to support the social distancing and quarantining measures under the COVID-19 requirement. We have that data available and we can certainly share it with you in a follow-up.
In terms of the research question, I believe you were also referring to the $18 million that we received in Budget 2022 to do what we call “action research.” It’s to support the understanding of what more it takes to deal with chronic homelessness and end chronic homelessness.
What we know at the federal level is that Reaching Home: Canada’s Homelessness Strategy is having an impact, but that alone cannot solve chronic homelessness. We must work closely with not only CMHC, but our provincial and territorial counterparts, as well as municipalities and community stakeholders. The causes of homelessness, as you can imagine, are complex, and we need to understand the mental health challenges and addiction challenges. Income support is a huge issue.
What we intend to do with that action research money is to select up to 10 sites across the country. We want to do some in-depth understanding of what this takes to bring together the community partners necessary to really crack some of the systemic challenges. When we think about systemic challenges, we think about children aging out of care, our social services challenges, which are, of course, under the jurisdiction of the provinces and territories. We think about transition planning for people being released from hospital or from correctional facilities. Our intent is to do some in-depth research to learn and share that with all of our communities across Canada to understand what more it takes to actually end chronic homelessness.
Senator Pate: Prior to this, I came from a meeting about child poverty, and one issue we were talking about there is children leaving home and some of the work that’s being done internationally. I’m wondering what kind of interface between — for instance, you just mentioned income security. Wales has developed a leaving care program for kids exiting care. As well, there are many NGOs, civil society, working on these issues. I’m curious what kind of interface there is with those groups. And yes, I would like to receive that data you were referring to.
Ms. Goulding: Thank you very much for the question. In terms of international examples, we do draw heavily on examples from the United Kingdom as well as Australia, but I’m not familiar with the work you’re speaking about in Wales, but I’ll certainly look into that.
Our engagement is much more focused on community engagement here in Canada. Homelessness is very much places-based, and the challenges happening in communities vary across the country. A lot of our community organizations, the recipients of our funding, are community-based non-profit organizations. A number of them in Ontario are also municipalities, and that’s largely a way to coordinate our funding with provincial funding because that’s the way they work in Ontario.
It really does very much depend, senator, but we absolutely look to engage civil society, municipalities, provinces and territories, and Indigenous partners in all of these conversations, because you need all those community players at the table to understand what it will take to end chronic homelessness.
[Translation]
Senator Moncion: My question is for Mr. McConnachie and has to do with accountability. You talked about the Strategic Innovation Fund. I would like to know what type of accountability you demand of the science groups you invest with in order to ensure that objectives are being met.
Mr. McConnachie: Thank you for the question. I will turn it over to my colleague, Ms. Kaminsky, who is in charge of the program.
Ms. Kaminsky: Thank you for the question. The Strategic Innovation Fund is a large fund with several objectives. There are programs geared to climate change, the fund to help SMEs and more general funds to attract global mandates.
[English]
As we run our program, and we evaluate projects against a wide range of objectives, we intake on a continual basis, but then behind the scenes, we kind of redirect. We have a bunch of committees and apparatus behind us that evaluate different types of projects and a level of funding and the types of funding that can be needed.
I noted the questions earlier about collaboration across projects. It is also part of our strategy to think about being the right door to any government program because we function as part of Innovation Canada. We try to work with businesses that need programming whether it’s infrastructure or whether it’s a small-scale R&D programming from the National Research Council, for example. We look at each project in its completeness and think about where it fits in our ecosystem. When we evaluate a project and say, yes, it is a good project for the Strategic Innovation Fund because it meets our objectives, the client makes sense, we then have to look at our program objectives, which are to accelerate economic innovation and public benefits to Canada. We look at the firm involved and think about what resources they have available and what resources they need. Is a province involved? Are there tax measures like SR&ED tax credits that help that company? Only then do we table an amount of funding with an individual applicant.
In terms of looking at the big picture of the Strategic Innovation Fund and determining how we get from all those big, high-level objectives to an individual project we’re looking at, we look at all those different dimensions and try to set the client up for success.
Senator Moncion: I understand that. So the only way you can evaluate the money that is being brought out is at the end when you approve the project? You say you’re giving them, let’s say, half a million dollars, and that’s how you will evaluate —
[Translation]
— whether your objectives have been met? What I am asking you is the opposite. What sort of accountability is owed to you by the company receiving the money to ensure that the work has been done and that the money was indeed used for the project?
[English]
Ms. Kaminsky: I wish there was a simple answer to that calculation, but the reason there isn’t is because we try to be flexible with the company to both maximize the impact of the funds that we have for as many projects as possible, but also to set the individual project up for success. This is why we run the program with multiple steps, and we walk step-by-step with the company or the recipient involved through the project.
For example, when a company initially comes in, our program maximum is 50% of a project, so many applicants will automatically ask for 50%. Why not? But then we look at it and we have an evaluation. We look at their balance sheets. We look at their history of raising funds, the operating funds available that they can recycle, and then we have a bit of negotiation with them. We’ll talk to a province and ask whether they would like to come in on this project, whether it’s Invest Ontario or other programming across the country, so that we can give the minimum amount of taxpayer dollars but enough to set it up for success and achieve the outcomes possible.
It can vary greatly as a sharing ratio of a total project. Our investments range from billions of dollars — we have some investments, I’m thinking about the potash mine from BHP in Saskatchewan was over a $7 billion investment. We provided $100 million toward that project. In other cases, a small company or R&D intensive firm, we may go up to 50% of that smaller project. We may provide $10 million or $20 million, but that’s equal to 50% of the total investment.
Senator Boehm: I apologize for arriving a little late.
I’m asking this question as an Ottawa-based senator. On January 19, Minister Mona Fortier and Ottawa Mayor Mark Sutcliffe announced $350 million in federal funding to contribute to the purchase of 350 zero-emission buses to replace the current diesel buses used by OC Transpo and also to install related charging infrastructure.
Ottawa’s public transportation service, OC Transpo, is targeting a fully zero-emission bus fleet by 2036. Infrastructure Canada’s investment is on top of a Canada Infrastructure Bank loan in August 2022 of $380 million to help finance up to 446 zero-emission buses for OC Transpo through 2027.
Given that the Infrastructure Canada funding is more recent, my question is initially to them, but CIB may wish to respond as well. I realize there might be some jurisdictional concerns here in answering the question, but to be blunt, the procurement and operational disaster that the Light Rail Transit, or LRT, has been for the City of Ottawa and its residents is an important one.
Did the federal government attach any particular conditions to its investments to ensure that these hundreds of millions of dollars are spent on a reliable zero-emission bus fleet that is suited to Ottawa’s climate and all its seasons? We’ve read that batteries lose their strength in subzero temperatures. How much money has Infrastructure Canada invested in zero-emission buses in other municipalities?
Ms. Lynch: Thank you for the question, senator. Absolutely. When we make any investment in a project, we have a contribution agreement that sets out the terms and conditions that proponents who are responsible for the management of the project have to meet.
In terms of our funding for zero emission, we have the Zero Emission Transit Fund, otherwise known as ZETF, which is $2.75 billion that is designed to help procure public transit as well as school buses across the country. I think we’ve made about $500 million of investment through this fund to date, and it is ongoing. It has both a planning and a capital stream, and we encourage the planning in advance to help ensure solid projects and good project management. We do that in coordination with the Canada Infrastructure Bank.
Mr. Cory: If you permit me, senator, maybe I can add to that.
I think the zero-emission buses are actually a great example of how different parts of the toolkit work together. We do work in close coordination with our loans, and the ZETF grant money. Ottawa is a good example of that.
When you’re doing an electric fleet — permit me a second — when any municipality is making that change, they have to do, as you mentioned, three things. They have to buy a bunch of new electric buses, they have to install the related charging infrastructure to charge those buses, and then they have to make a bunch of, I would call them, deeper infrastructure investments, such as new garages and new maintenance facilities because maintaining an electric bus is not the same as diesel. You’re not doing oil changes anymore, but you’re doing electronics checks nearly every day. So you actually have to change the fit-out of the garage a bit. The investments, yes, you have to buy the buses, but there is a bunch of infrastructure behind that as well.
When any municipality is looking to make that change, their first port of call is the CIB. We will give them a loan, and it’s very easy math. We look at how much money they’re going to save for the next 10 to 12 years of those buses running by not having to buy diesel and not having to do oil changes, so both maintenance costs come down and, of course, fuel costs come down. We can size a loan to the City of Ottawa, for instance, that is based on those savings.
In the case of Ottawa, we made a loan agreement with Ottawa to go buy the buses and do a bunch of the charging infrastructure. Our loan has sized in that it’s not going to cost Ottawa anything more than they were going to spend on their existing diesel fleet, but they’re going to dedicate all of the savings that come from those buses to repaying our loan. That’s a loan product that’s using the money that the vehicles create over their life to pay.
Now, that money is probably not enough. It’s enough to cover the purchase of the buses and the charging infrastructure. It is not usually enough to cover deeper retrofit activity such as building a new garage or a maintenance and storage facility. That’s why they apply in addition to Infrastructure Canada and to what’s called the Zero Emission Transit Fund.
So getting money from both of us — and the fact that one was announced first and the other came later is, actually, by design. That’s a feature, not a bug. That’s on purpose.
To answer your question around outcomes, yes, we make the loan when we do our due diligence. Of course, we’re getting paid back out of the savings, so we need those buses to operate and to replace diesel buses and to save on fuel purchases. So we look at their plans of how they’re going to buy and maintain the buses because that’s the revenue stream that’s paying us back as lenders. That’s our due diligence.
Senator Boehm: Let me pursue the due diligence for just a moment. The technology is also changing rapidly. Here you have a long-term investment that will have some fixed capital costs in terms of the investment itself. Are you building in that, perhaps, two or three years, the batteries will look completely different?
Mr. Cory: Yes.
Senator Boehm: That’s one. The other question on the due diligence, have you looked at other jurisdictions where there are electric vehicles operating in very cold climates? I’m thinking about Norway, for example, where they’re going almost completely electric, despite being a major oil and gas producer. Are there lessons that can be drawn from that?
Mr. Cory: Excellent question. Thank you. I really like buses and the transition we’re making.
To take your questions in turn, first, we’re seeing two strategies in the market and we’re lending to either of them. The two strategies are some municipalities are buying extended battery warranties that actually mean that the bus manufacturer will replace the batteries a couple times over the 12 or so years of the bus’s life. That’s probably the average. Different municipalities have different strategies, but buses last somewhere between 10 and 15 years.
One thing is that they’re buying extended warranties that basically buy them several battery switches as the technology advances, so we look for that as one of our forms of security, if you will. Other municipalities, if they’re not buying extended warranties, we’re making them create a reserve fund to put money aside for midlife battery replacements, one or two replacements over the life of the vehicle. So yes, that’s 100% part of our due diligence, and one way or the other, we’re loaning to battery replacements because there will be one and sometimes two over the life of the buses.
Second, yes, we’ve been hiring engineering firms to do our technical analysis of how long the buses will last and how many replacements there will be. This will be engineering firms such as Hatch, if you’ve heard of them, or WSP. We’re using those firms, and we’re requesting of them to please compare to the experience in other jurisdictions that have more operating history. They’re bringing good benchmarks to us, so that’s part of why we engage a third party like that.
Senator Yussuff: Thank you, witnesses, for being here. My question is to Mr. Cory.
My friend Senator Marshall asked you a question regarding the suggestion that Mr. Morneau had made that private sector investment will be four to one. I’m not quite sure what your answer was, so let me ask you the question differently. When do you think you will achieve the one-to-four ratio?
Mr. Cory: Let me try and give a clear answer, then. Thank you for bringing me back to this topic. It is an important one.
The complexity with this private capital multiplier goes like this: If you buy a home today and you make a down payment of half the amount, you put $50 in and you take a mortgage for the other $50, at day one you would say the capital ratio is that I paid for half of the house and the bank paid for half of the house. By the time you’ve paid back your mortgage, you will have paid for 100% of the house, and it will be fully funded by you. The bank didn’t buy your house; they lent you the money up front.
Same thing for us. When we’re making a loan at the time of loan amount, there is a number that is how much of our money is going in and how much private institutional capital is going in. As Senator Marshall points out, so far in our loans, that has been around one to one. It has varied quite a bit project to project because, as I said earlier, our job is to put in just enough money to make each project happen. But across our whole portfolio, the $8.6 billion that we have in investment commitments so far, that ratio is about one to one. As we get paid back, that ratio continues to shift.
To answer your question, senator, right now our average loan term — infrastructure assets live a long time, so our loans have quite long terms.
Our average loan term — Ms. Joerg will check me on this; she’s flipping to the page — is about 17 or 18 years. Again, that’s a range. Some loans are 5‑years long, but some are 30 years long.
As those loans get paid back, our money gets taken out; we put that money back into the next project. As we go through several cycles of that process, the ratio will continue to increase. I’ve never done that calculation, so I will have to get back to you with an answer, but it is over the long term that we move toward that 4-to-1 ratio. That’s an objective to move toward as we get repaid and as our money moves into the next project. That’s over decades.
Senator Yussuff: How much would you say that you have right now in terms of commitment from the private sector, in terms of overall dollars into the bank, for projects that are happening in the bank right now?
Mr. Cory: As I said, our investment commitments, as of the last quarter, were at $8.6 billion. That’s about matched, so about the same amount in private and institutional capital at the time of the loan. I should point out that it’s actually slightly higher than that because we’ve started, in very small amounts, to get repaid and to earn interest. That’s already starting to shift that balance, and in each quarter it will shift more and more.
Senator Yussuff: Are most of these projects at the municipal level?
Mr. Cory: No. It’s really interesting. We found that it depends a lot on the sector. I mentioned that we’re active in five sectors. We just talked about electric fleets; that’s entirely with municipalities and with school bus operators. In some provinces, those are private, but the majority of our electric fleets are with the public sector, with municipalities.
On clean energy, on the other hand, we’re working mostly with provinces and their electricity transmission companies but also with private power generators — renewable companies, battery storage. That has much more of a split, I would say, between public and private. Then on broadband — and we worked with Mr. Dagenais on the Universal Broadband Fund — that’s us loaning money to ISPs around this country who are actually the deliverers of broadband. That’s entirely with the private sector and not with municipalities.
It really depends upon the asset class and the type of investment. Transit and transportation are much more municipally led. Power is led provincially. Some sectors have more of a private-sector flavour to them.
Senator Yussuff: Can I ask you a question in regard to broadband development, especially for First Nation communities across the country? I’ve been hearing this, and I’m going to get very old and probably die before this is actually achieved, so I want to be blunt. Can we actually say for certain that rural communities and First Nation communities will actually have broadband in my lifetime?
Given the length of time we’ve been discussing, it’s really frustrating. Some of us are fortunate to live in municipalities and urban areas in this country. I don’t think the kids in rural municipalities should have a different life. They should have the same life my kids have in this country. Despite the major investment our government continues to speak about, we can’t seem to achieve the time frame to get there. I think it’s fair for Canadians to understand when we think we’re going to achieve this objective. More importantly, given all the taxpayers’ dollars we’re investing, do you guys have a horizon on the radar? Can we actually say with certainty when this is going to happen?
Mr. McConnachie: Thank you, Mr. Chair. I recognize time is short, but I’ll ask Mr. Dagenais to respond to the question.
Mr. Dagenais: Quickly, we have two objectives: reaching 50/10 Mbps connectivity in 98% of Canadian households by 2026 and 100% by 2030. We’re confident that we’ll meet and exceed the 98% target by 2026. We’re currently evaluating how many homes are left and how much money we have left to hit the 2030.
There are also a lot of technological developments taking place in terms of low earth orbit, or LOE, satellites. As of last year or early this year, we have some low-earth-orbit satellites that cover the entirety of Canada and are able to deliver on speeds of a minimum of 50/10 Mbps. High-speed internet is available now across the country through low-earth-orbit satellite technology. It’s not fibre, and 80% of what we’ve funded so far is fibre, so it’s scalable, but there are technologies now that reach very remote places. We have some projects in very remote places that are using low-earth-orbit satellite technology, and it’s going well.
Senator Yussuff: Is that cost affordable for residents in those areas? Is it the same as what those of us who live in the urban environment would be able to achieve?
Mr. Dagenais: We have funded the actual dish. I’ll mention Starlink; I happen to know that Starlink is $149 per month, I believe, at the moment, for speeds that exceed 50/10 Mbps.
Senator Yussuff: You don’t have a competitor?
The Deputy Chair: Sorry. Second round.
Senator Cardozo: I want to build on Senator Boehm’s question about the e-buses but to ask you more generally, how does a project figure out where to go, whether it’s to the bank or Infrastructure Canada or ISED? Do you talk among ourselves and figure out how the mix is going to happen?
Mr. Campbell: Thank you, senator and chair. On an overall basis, when we think about Infrastructure Canada and our partnerships with provinces, territories and municipalities where there is the largest suite of programs under the Investing in Canada Plan, we have a regular engagement with all of those ministries to determine their pipeline of projects. The first window is to Infrastructure Canada. Often, referrals are made to the Canada Infrastructure Bank. There are a dozen other ministries that have programs under that umbrella where projects can be referred.
In certain cases, we combine programming to support those projects. It’s really to facilitate the idea that there is no wrong door. I’ll let my colleague Eric Dagenais talk about the broadband side, where there is a particular window that allows proponents to be referred to various programming.
All of our ministries are working really hard to collaborate with other government partners. As my colleague, Ms. Lynch, said, in certain cases where there is a direct program application, efforts are being made to engage with those proponents as well. We can put the burden on the government’s side, rather than having proponents and sponsors determine which window to go through.
Mr. Cory: On electric buses, in particular, as Mr. Campbell said, I think we realized pretty early in our program that we needed a more coordinated approach. We worked closely together to develop, “one window.” As Mr. Campbell said, when someone calls the department and says, “We’re looking for a grant,” the first question is, “Have you tapped into a loan from the CIB first?” because it is allowing us to stretch the total tax dollars that much further if we’re borrowing against the future energy savings, first, and then figuring out the remainder that can be grant-like.
Mr. Campbell mentioned broadband because that’s the exact same approach we’ve taken on broadband. When people apply to UBF, or the Universal Broadband Fund, as part of their application, there is a question. “Have you engaged the CIB? Have you looked at borrowing money?” Because, again, a loan is better for us to tap into and max out before we get to the grant. A number of our programs were going that way, and certainly we have it on buses.
Senator Cardozo: What determines what gets your support as opposed to their support?
Mr. Cory: We size our load. We do the math on how much loan can be supported.
Senator Cardozo: You maximize that first?
Mr. Cory: We maximize that first, and then we see what’s left. They submit a plan. Usually, as I mentioned, what’s left is what I would call deeper infrastructure build — the new garages and that sort of thing that can’t be paid for through the loan.
Senator Cardozo: My next question is for Mr. McConnachie.
You mentioned support to Sanofi. I am thinking of Medicago, which got a whole lot of funding, $173 million in 2020, for the COVID vaccine. Earlier this month, it just pulled out. First, were you involved in Medicago? But on something like Sanofi — I don’t want to pick on them — how do you do your due diligence and keep tabs on them if they decide to pull up stakes halfway through? Do you get the money back?
Mr. Dagenais: Thank you for the question, Mr. Chair. I’ll turn that question to Ms. Kaminsky who was involved in that investment through the Strategic Innovation Fund.
Ms. Kaminsky: Thank you very much for the excellent and very important question. I’ll answer globally, and I can speak a little bit about Sanofi and Medicago in particular, if you wish.
Generally speaking, with every investment under the Strategic Innovation Fund, we have a significant due diligence process where we review the technical, financial, trade risk and IP risk of the company. We know much like any major strategic investor would know. We have a very good line of sight of the corporation and the investment that we are making. When we design an investment in that company, we have both general but also customized obligations to the Crown to mitigate risks appropriately, as well as set the company up for success.
There are general mitigation measures available to the Crown. With any contribution agreement we have — I’m sure it’s in all of the different programming — available remedies, processes required upon breach or default, renegotiation processes required and ensuring reasonableness clauses by all parties involved so we can work together and collaborate to resolve any specific issue.
We will also tailor specific measures in an agreement as appropriate to the entity involved. For example, if a small firm needed to raise equity in the life of their agreement, we would have a stage-gated approach where milestones would need to be achieved in order for the funding to continue. Other projects like large-scale investments — you referred to Sanofi — are quite different from dealing with a small firm. In terms of doing a large-scale investment interaction, Sanofi is a large company, and it doesn’t necessarily need to raise funds on the private market as a small R&D-intensive company would. What we are looking at in terms of those targeted, large-scale investments are strategic interests in Canada. So any investment we would have, whether it’s a large automotive producer or other kind of large-scale company, would include requirements for them to complete the project. They would also have employment obligations and obligations to do work-integrated learning opportunities and R&D intensity. All of those obligations are reported on, audited and reviewed.
Similar to what was described earlier around claims-based programming, we provide milestone payments as costs are incurred by the company. In that case, there would be a breach of a contribution agreement. It depends on the details of that specific investment and what we were looking to achieve, but we would have remedies available to the Crown, including seeking repayment up to a certain maximum amount, depending on the agreement.
In some cases, we would proactively negotiate a termination of that agreement, get repayment and wrap the investment forward. In other cases — I don’t have any experience with this — there could be litigation measures available if and when needed associated with the contribution agreement.
[Translation]
The Deputy Chair: Thank you very much. There is tremendous interest in our witnesses. For the second round, I would ask senators to ask concise questions and for the witnesses to provide concise answers.
I will indulge in asking a question before moving on to the second round.
We have talked a lot about governments and jurisdictions. However, the municipalities have a great deal of responsibilities. In fact, 58% of Canadian public infrastructure falls under municipal responsibility; between 21% and 22% fall under provincial and federal responsibility. Generally, we know that infrastructure projects are shared equally three ways. Often, the municipalities carry out the projects and assume one third of the cost, as do the federal and provincial governments.
Having spent a long time at the other end of the subsidy pipeline, I noticed that people often ask for municipal priorities to be respected and established in collaboration with the federal and provincial governments. In developing programs, conditions and regulations, are municipalities, who are indisputable partners, being consulted more regularly?
We are facing major challenges, from social integration with respect to immigration, to sustainable development or economic development — and earlier, we were talking about homelessness. The municipalities are at the heart of these challenges. Has any thought been given to consulting the municipalities and collaborating with them in developing programs?
Gerard Peets, Assistant Deputy Minister, Policy and Results, Infrastructure Canada: Thank you very much for the question. My name is Gerard Peets. I am the Deputy Minister of Policy and Results.
If I may, I will answer in English.
[English]
I think that the role of municipalities is one that has always been recognized in terms of funding infrastructure and setting priorities for infrastructure. The Canada Community-Building Fund, formerly the Gas Tax Fund, has provided funding for municipalities for close to 20 years, and it is 100% bankable. They can save it, and they can use it on a very wide range of projects.
However, I think you’re also quite right to point out that in many cases, we have a third, a third, a third. When we talk about public infrastructure in this country at the community level, we are dealing with a situation where the scale and magnitude of projects — the sheer scale of the overhang of state of good repair and replacing infrastructure that was built in the post-war period — has created a situation where other sources of funding than the local tax base — the municipal — are necessary. So when the municipality, province or territory and federal government are all essential, in particular for some of the larger projects, we look at how we can carve the appropriate role for each going forward.
I’ll point out one other thing. The government did place an emphasis on achieving housing outcomes in the attainment of transit investments and other investments in recent budgets. Looking forward, we are thinking about how we can work with local governments to create the conditions that will move progress toward achieving those goals. That’s going to require us to work differently in partnership at a regional level, and that is something we are thinking very closely about in particular in our permanent public transit program that we are in the process of developing.
[Translation]
The Deputy Chair: Thank you. We will invite you again.
We will now move on to the second round. There is more interest than time will allow. I therefore ask that the questions and answers be succinct.
We will begin with Senator Marshall, followed by Senator Gignac.
[English]
Senator Marshall: I’m back to Mr. Cory. Could you respond in writing to a question I asked initially that we didn’t really get to? Why didn’t the private sector come in as we thought they would? Not the institutional investor. I think we would benefit from anything you can provide on that.
The other question I have is about the fact that the Canada Infrastructure Bank has a credibility problem. One of the standing committees in the House of Commons studied it last year and recommended the bank be abolished. To tell you the truth, I don’t ever remember seeing anything positive about the bank except during your annual general meeting — your annual report — from within government.
Is this an issue for the board or executive committee? What are you doing about it? When you talk about the Canada Infrastructure Bank, people roll their eyes and shake their heads. They are not convinced that the bank is providing value to Canadians. Could you elaborate on that? Maybe the board and executive committee are saying that they don’t care about that. Could you respond to that?
Mr. Cory: On your question about written material, I’m happy to submit something on the attraction of private capital.
I think it is fair to say that the CIB received a lot of criticism in the early days of it starting. Part of that is the challenge we all have in launching new institutions. The first employee was hired in 2018, and by 2019, it was already written off as a failure — that we hadn’t done anything. In the scale of infrastructure projects, that is a pretty unrealistic way to approach things. Remember, we weren’t looking for shovel-ready projects we could throw money into. Quite the opposite. We were looking at shovel-worthy projects that were stuck and required investment even to get ready for construction. I sometimes get asked to name a project we have completed. I think the premise of the question doesn’t really reflect the reality of infrastructure in our country. Building a new power dam or a new transmission line that connects multiple provinces are billions-of-dollars projects — often over many years.
We didn’t set ourselves up with good expectation. I also think we’ve learned a lot of lessons at the CIB about how to get more done, and it’s fair if you look at that curve. You talked about the hockey stick, senator. To be fair, in our first year, we made one investment. That’s the Réseau express métropolitain, or REM, project in Montreal. The next year, we didn’t make any investments. I started just over two years ago, and we’ve done 42 projects since then. Those are real investments in projects across our country. I would strongly disagree. If you were to talk to Minister Smith, Minister of Energy in Ontario, talk to the former premier of Alberta, Mayor of Calgary, Enwave, Markham District Energy Inc., or Tshiuetin Rail.
I think there are significant levels of endorsement of the CIB and I think the story is changing.
I’ll end with this, there was an article in The Globe and Mail yesterday that actually said something about the wind in our sails and the progress we are making. I think that story is turning. Our management and board take it extremely seriously. It’s our job to show Canadians this is an effective tool in the toolkit. I think we are on the way.
Senator Gignac: Canadians have been taken by surprise when they realize the Royal Canadian Mounted Police allow contract to a Chinese-linked company. My question is regarding private investment infrastructure. Have you any governance, because the world has changed since February last year so that the ownership matters? Are there any rules regarding that?
Mr. Cory: Wonderful question. As any financial institution, we have rules around knowing your client. People in the banking world would know. We do background checks on all of our borrowers. We have a regime of that due diligence. We align to any federal rules around foreign ownership. We fall in line with whatever federal guidance is like all banks do. We do know your client checks in any investment.
Mr. Campbell: I can speak across the whole infrastructure marketplace in Canada. There is deep investment in financing from the private sector, both domestically and internationally, that finances much of our construction and activity. All of that is governed by the Investment Canada Act and provisions.
In terms of large infrastructure projects where there is financing involved, often it is facilitated through Canadian regulated intermediaries. In various cases where there is an issue of equity investment in various projects, then the project sponsor or the government or the entity responsible for that works with other players to ensure those investors who take an ownership position in a project, particularly if it’s public infrastructure. There are various checks made and facilitated. That is really routine business.
Mr. McConnachie: The Minister of Innovation, Science and Industry also has a statutory role with regard to the administration of the Investment Canada Act, as I’m sure honourable senators are aware.
In December of this past year, the government has tabled legislation to modernize the act specifically in relation to the considerations that the honourable senator raises.
A couple of specific changes that would be of note to the committee are to basically respond to the changing geopolitical and economic global environment and targeting specific measures on investments with ties to Russia, and second, state-owned or influenced entities, investments in the critical minerals sector. I’m sure senators will be aware of three transactions recently blocked by the minister under these provisions. They are over and above the net-benefit considerations as well as the foreign security reviews of foreign acquisitions that have been in place with the act for a long-standing period. I could go into the details of the act, but I don’t think there is time, senator. Thank you.
Senator Smith: Infrastructure Canada, could you address this? Your department is seeking 36% increase in voted authorities in the 2022-23 Main Estimates compared to the previous year. Could you give us an explanation or update of your department’s result reports for the previous year? What percentage of total indicators were achieved? As for metrics and indicators not achieved in the previous year, can you explain if your department has some kind of accountability mechanisms?
I ask because it seems like everybody works together, but I’m just wondering about bumping and what happens between the various groups. Obviously, you have assertive leaders and people who want to do well. What type of bumping takes place and what type of relationship takes place in relation to the question?
Ms. Bertrand: Thank you for the question. I will start by answering the first part of our results. The 2021-22 Departmental Results Report indicated that we met 75% of our indicators, so 9 out of 12, which was a huge improvement over the previous year where only 54% of our indicators had been met. We always strive.
Senator Smith: Why the difference? Why was it better than the previous year?
Ms. Bertrand: We would have to respond to that question.
Senator Smith: That would be great if you could. Is there anything else you would like to add? I wasn’t trying to throw you off. I was trying to understand the accountability mechanisms.
Mr. Campbell: Thank you for the question, senator. I think our public reporting demonstrates our overall ambition in terms of what indicators we want to judge ourselves by accountability.
In terms of collaboration versus the friction or bumping up that may happen, in our experience it is largely a collaborative basis inside like our ministry as well as across ministries. There is also a performance management framework for all executives and senior executives that take into account our indicator, but also collaboration and how we achieve results and objectives. We stand behind that and are happy to respond more in writing about the progress we are making, particularly in a growing department with a lot of changing programs and activities to respond to.
Senator Smith: There are a lot of moving pieces. If you could send us a one-pager, that would be fantastic. We are very busy.
Mr. Campbell: Coming back to the questions about the Canada Infrastructure Bank from the Government of Canada’s point of view, a legislative review of the statute is under way and the minister intends to bring forward a report to Parliament by the end of June as per the statute. We are consulting with provinces, territories, municipalities and Indigenous groups. We have opened some public consultation and we will do more to probe into these questions about the progress that the Canada Infrastructure Bank is making.
The feedback from our provincial, territorial and municipal jurisdictions, given the flexibility of innovative financing, the way in which the institution and the government have responded to meet their needs I think will play out in that story. We can always do better and always learn, but going forward we look forward to coming back to this house with that report.
Senator Loffreda: My question is for the Canada Infrastructure Bank.
After almost six years since its creation, can you share with us and elaborate on some of the lessons learned and best practices that might be useful for the Canada Growth Fund or other funds to know about as they are starting up? What should funds that are being established avoid or implement to ensure their rapid success, maybe some key learning to take forward and note?
Mr. Cory: Thank you very much for the question. I will try to do a brief version. This is something we have spent a lot of time on, as you can imagine, over the last few years.
One, recognizing the nature of our country and infrastructure needs is important. I have sometimes described it this way: We have home-run projects, rail systems that connect our country, transmission lines that connect clean and less clean parts of our electricity grid. These are multi-billion-dollar projects and sometimes take a decade.
We also have $6 million in a wastewater treatment facility in a First Nation community that needs access to clean drinking and clean processed water, or broadband in 20 northern communities at a $10 million scale.
One of the lessons learned is that you have to play at all of those levels at once. Early on, the CIB was perhaps over-indexed on megaprojects which are really important in moving our country forward, but you have to get the balance right. That’s something we have learned.
Certainly if you are the Canada Infrastructure Bank, you have to be able to work across Canada at a scale that is relevant for Canadians. That has the benefit of having much more of a fly wheel of progress and success. That’s why you can be on a trajectory that we are because you are doing things of different sizes but keep moving the ball down the field on the mega projects, but also doing smaller.
Another thing we’ve learned is that while we are an independent Crown — and that’s really important; we act like investors and we take every deal to our board in a very commercial way — it was critically important for us to figure out, as you have heard in today’s testimony, how to work in a coordinated way with colleagues on the broadband file — both Ms. Kaminsky and Mr. Dagenais are partners of ours — at INFC, and you would say the same at Natural Resources Canada, or NRCan, and Environment and Climate Change Canada, otherwise known as ECCC. While we are independent and get to act commercially as investors, we are not divorced from the objectives of government. Another important lesson is that there is that coordination while maintaining independence. It took us time to get that balance perfect.
Senator Loffreda: Thank you.
Senator Yussuff: Mr. Cory, obviously climate change is driving innovation at the municipal level. They are the first line of defence in trying to deal with some of these challenges we face.
You were talking about municipalities purchasing electric buses across the country. I know that we manufacture those buses here in Canada. Of course, jobs and a tax base for this country are really important.
Is the bank determined to support municipalities in terms of buying electric buses? How frequently are they using Canadian suppliers? Given that our people produce the buses, there is a tax base here. Are you keeping some data on this? I know that not all municipalities are buying Canadian electric buses.
Mr. Cory: We are now at $1.6 billion in loans to municipalities and school bus providers for buses, to give you some context. Over 4,000 buses are now on order.
We are lenders and we have tried not to dictate to municipalities their approach to procurement. Every municipality and jurisdiction has procurement rules. We do not, as part of our funding, dictate that they must buy Canadian buses.
The overwhelming majority of our loans have been used to buy buses from Canadian suppliers. I think that’s because Canada has built a success story in the electric bus market — and I hope, more generally, over time, we will in the electric vehicle space. We don’t dictate it, but that’s where most of our money has ended up going.
Ms. Kaminsky: I think it’s worth stressing the importance of the bigger picture of these kinds of investments in the Canadian supply chain. The Strategic Innovation Fund has a direct focus, through the Net Zero Accelerator Initiative, on building out the Canadian capacity to capture opportunities in a net-zero future. There is a large-scale global investment revolution happening in terms of anchoring the investments in supply chains that will be critical to the manufacturing and procurement within Canadian companies.
For example, the government has secured investments in new large-scale battery manufacturing, the critical minerals development that will go into those batteries, the processing and recycling. There is, and continue to be, large-scale changes that will allow for a greater and greater level of Canadian suppliers from the entire supply chain associated with electric vehicle production. That is just one area of investment opportunity that we are focused on and collaborating on.
[Translation]
Senator Moncion: My question has to do with electric vehicles, charging stations and the capacity of the Canadian electricity system. People seem to think that Canada’s hydroelectric and electricity system is unlimited, but that is not true. How are you dealing with that?
[English]
Mr. Cory: Thank you for the question. As I mentioned, it is not a coincidence that our sectors include transit and transportation — so the charging infrastructure and electric vehicles but then, working backwards, the transmission. To meet our demand side, we’re going to have to get the power to where it needs to be, as well as clean power generation and storage.
We are making investments across that full chain. To get to our goals, we are doubling to tripling the consumption of electricity in this country. That’s what it takes to get to net zero.
In terms of the CIB’s current portfolio of $35 billion, we have allocated money to each sector: $5 billion to transit; $7 billion to clean power; and $7 billion to green energy, which includes hydrogen and fuels.
Senator Moncion: What is the buy-in for provinces for the electrical grid?
Mr. Cory: The buy-in is really high. Each province has their own strategy of how they’re getting there. For some, it is by expanding hydro resources. Ontario is building new nuclear capacity, and others are investing heavily in renewables.
Senator Moncion: How many are working with you?
Mr. Cory: I want to say this carefully, but we are having conversations with every province about their electricity plans.
Senator Moncion: Thank you.
Senator Pate: My question is for ISED. Your results summary 2018-19, 2021-22, indicated that several ISED responsibilities did not meet annual targets. Key is that 4 out of the 21 not met in 2021-22 pertain to core responsibilities with respect to people skills and communities’ and companies’ investment in growth.
In addition, the ISED 2022-23 Departmental Plan outlined numerous initiatives and programs to assist women, Indigenous people, youth and racialized groups.
I have two questions. If time doesn’t permit, perhaps they could be provided if writing.
First, could you explain why the targets were not met and what steps you are taking to remedy these? Could you provide updates on the progress of the new initiatives that are in the departmental plan, whether you feel you are reaching those intended populations and how you know that?
Mr. McConnachie: Thank you. Perhaps a written response on the latter question, because I don’t think I’ll be able to go through the entire suite of ISED programs that speak to those communities, although we do have significant results to report.
Perhaps I could speak to the broader issue of results reporting. It is germane to the question that was posed to my colleague at Infrastructure Canada.
There have been challenges for generations in terms of departments and governments having appropriate data sources for their long-term indicators. You have heard a lot today from all of our colleagues that we, as organizations, make long-term investments in industrial sectors, communities, provinces and territories, utilities, et cetera, and in many cases it does take time for those investments to materialize.
One of the faults we do to ourselves — perhaps a self-inflicted wound — is to look at expenditures going out the door and jobs created, which doesn’t necessarily recognize the significant ramp-up effect that is related to these investments.
Often you will see in our performance measurement structures that we are targeting long-term objectives out of these programs that are difficult to demonstrate in the short term. Certainly, I prefer to look at our investment portfolio — the areas of my colleagues, in particular, but other ISED programs as well — by looking at the deal flow, for example.
To take Ms. Kaminsky’s program areas as a good example, despite the fact that only a small percentage of the overall money has gone out the door for the Strategic Innovation Fund, the vast majority are contractually committed and we are at the point where we are running out of money to be able to make new deals. That is a much more significant indicator than how much money we have spent in the current term.
I hope that answers the question. Thank you.
[Translation]
The Deputy Chair: You can submit your answers in writing. Thank you very much.
[English]
Senator Bovey: Thank you. I’m just going to ask you to provide material in writing, because I’m well aware of the clock.
Mr. McConnachie, could you submit to the clerk, the funding commitments you have made, by province, to cultural tourism projects?
Mr. McConnachie: Briefly, I would indicate that cultural industries aren’t the specific remit of ISED, although tourism certainly is. Under Minister Boissonnault, some major engagements have been made through the tourism fund and also the Indigenous tourism fund, which is currently being developed but not yet launched.
In response to your question, we would be happy to provide an update on where we are on our tourism initiatives.
[Translation]
Senator Dagenais: My question will be brief. The Government of Canada concluded a $600-million agreement with Telesat to obtain high-speed internet coverage in Canada through low-orbit satellites.
Is the Telesat technology meeting expectations? Is it cost-competitive with the satellite-based deployment of Elon Musk’s SpaceX? Do you believe that investing in Telesat was the best option?
You can answer with a simple yes or no.
Mr. McConnachie: I think that would be a good question for my colleague, Mr. Dagenais.
Mr. Dagenais: I can start by saying that no money has been disbursed. The Telesat project is still on the drawing board. We are talking to investors. Based on what we have seen, the technology will work, but no money has been spent yet. The $600-million sum is still in the Government of Canada’s coffers.
[English]
Senator Cardozo: I have a brief comment following Senator Marshall’s last comment. In terms of the reputation of the bank, it’s important for you to give it a lot of consideration. Starting a new organization is always difficult. The entire population is not thinking about you, and it’s nothing personal. But those who are, some think it’s a great idea and some think it’s a colossal waste of money. I think you need to focus on being able to demonstrate in very short, pithy terms what your results are and how many projects you are able to help and how much private sector money you are able to bring to the system. I would say I think you need to step up.
While you’re so involved in the work you do, you need to step up PR about what you are able to achieve.
Mr. McConnachie: Telling that story. Thank you.
[Translation]
The Deputy Chair: Thank you for your questions. We managed to fit everyone in for a question during the second round.
[English]
Now that we have reached the end of our time, we will conclude this meeting.
[Translation]
I would like to thank all of our witnesses for appearing today. It is much appreciated. Before adjourning the meeting, I would like to remind witnesses to please submit written responses to the clerk by the end of day on Tuesday, February 28, 2023. It is a public commitment; we will await your responses.
I would also like to inform honourable senators that our next meeting will be tomorrow, Wednesday, at 6:45 p.m., to hear from the Auditor General of Canada.
(The committee adjourned.)