The Liberal government’s plans to funnel $10 billion in spending on sustainable projects through the Canada Infrastructure Bank (CIB) ignores mounting evidence of the high costs of privatization. This decision will mean the public foots the bill for more expensive private lending and long-term debt repayments for risky public-private partnerships (P3s).
The money will go to clean power, broadband, building retrofits, agricultural irrigation, and zero-emission buses and the infrastructure to charge them. This green investment is critical but should be made with public funding and financing.
The federal government should also fund high quality, affordable broadband as a public utility instead of privately-owned infrastructure. Any projects, whether public or private, must support in-house delivery, not outsourcing, to maximize the public benefits.
The federal government can borrow money at historically low rates right now to support the green infrastructure needed to address climate change. Instead, they are creating opportunities for corporations to profit from essential climate-related projects. CUPE research shows that using private sector financing could more than double total project costs, reducing infrastructure dollars available for the green transition.
The CIB’s mandate is to use $35 billion in public money to attract and subsidize private sector financing, ownership and operation of revenue-generating infrastructure projects. The public will pay through user fees and charges in order to guarantee this revenue.
Instead of investing in privatization, the government should support a public recovery that:
- Invests in public projects by providing grants or low-cost public financing for infrastructure projects.
- Streamlines investments to ensure needed infrastructure spending gets out the door, while ensuring safeguards are in place to ensure communities and equity-seeking groups benefit.
- Prioritizes green investments that are publicly owned and operated, such as renewable energy and helping municipalities respond to climate change.
- Prioritizes social infrastructure in areas such as child care, long-term care and social housing where a predominantly female workforce has been disproportionately affected by the COVID-19 crisis.
The federal government should also increase the federal share of infrastructure project costs to relieve the intense financial pressure provinces, territories, and municipalities are under because of the COVID-19 pandemic.