Most of the noise in Ottawa this week has been focused on varying degrees of outrage related to a statement from Prime Minister Trudeau on the passing of Cuban dictator Fidel Castro. The Prime Minister’s statement and comments on his death has been widely criticized internationally for not referencing the numerous human rights violations that have occurred in Cuba under the Castro regime. From my perspective while I believe the statement could have been worded in a manner more reflective of these human rights violations it is also important to not allow issues such as this one to overshadow other important concerns, one of these is the Liberals pending new “Infrastructure Bank”.
In my November 3rd MP report I shared several concerns about the Liberals promised new $35 Billion Federal Infrastructure Bank. In that report I questioned the need to develop yet another federal agency as well an expensive new federally run bank. I also pointed out one of the advantages of Government borrowing money is that Government can do so at rates much lower than the private sector can. In order for the Infrastructure Bank to gain any private sector investors, the bank will need to pay competitive rates of return– these interest rates will of course be higher than the rates that the Government can borrow at so in effect this new Infrastructure Bank could ultimately end up subsidizing private investors who would enjoy lucrative and guaranteed rates of return – this in my view is not the role of Government.
This is in stark contrast to what the Liberals proposed in their election platform. Originally they said it would be set up to help all Canadian municipalities to access lower cost borrowing rates and would be largely used to finance social housing.
Since writing that report the Liberals have now announced further details on the Infrastructure Bank that in my view should be of very serious concern to citizens in our region. The most troubling aspect of the mandate for the Infrastructure Bank is that it will only fund projects with a price tag of $100 Million or more. While major cities such as the Liberal strongholds of Toronto and Vancouver have projects within this price range, for smaller and rural municipalities these types of projects are completely un-affordable. As the Canadian Press recently reported the Finance Minister has admitted that global investors will only invest in "large transformational projects" that produce enough revenue from which they can earn a high rate of return on their investment. In other words the Liberal Government is borrowing money it does not have at reduced rates so that Canadian taxpayers can finance and subsidize high rates of return for private international investors.
What is more disappointing about this scheme is that taxpayers in rural, smaller and even mid-size municipalities will be taking on this debt, will help pay for the high interest paid to private investors and will not even be eligible or able to afford the projects in question because of the pricey $100 Million minimum price tag. Worse is that the roughly $32 Billion the Liberals are borrowing to use as seed money for the creation of the Investment Bank is money that could but will not be spent on building infrastructure in the very same municipalities that will not be able to participate in this expensive program. This Infrastructure Bank in my view will be detrimental to not just our region but many regions across Canada.
As it is my practice to not just oppose but also propose I have a different idea. Instead of paying lucrative returns to private global investment firms the Liberal Government could instead increase the rate of return on Canada Savings Bonds so that everyday Canadians could benefit and at the same time lower the $100 Million project minimum so that the majority of Canadian municipalities can participate. As always I welcome your views on this or any subject before the House of Commons. I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.
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Dan Albas is the Member of Parliament for the riding of Central Okanagan-Similkameen-Nicola.