When news broke of the Liberal’s 180‑degree turn on an infrastructure bank last fall, reaction was swift. Critics pointed to the bank’s many potential flaws – and dangers.
The more people learn, the less they like the bank.
As more details are revealed (or exposed through Access to Information), and as the Liberals attempt to ram the multi-billion dollar bank through Parliament in an omnibus bill, the criticism is deepening.
There’s an ever‑growing list of financial experts, academics, and MPs from across party lines who are criticizing the Liberal plans. Together, they are speaking up against a bank that’s clearly been designed by corporations, to serve the need of corporations.
“The Liberal government has become the instrument of certain very powerful corporations that are in the midst of creating an entity that corresponds to their interests. And when I say their interests, it’s their financial interests first and foremost. If this isn’t a major conflict of interest, I don’t know what else you could call it.”
— NDP finance critic Alexandre Boulerice, quoted in the Globe and Mail. Read more.
“No homeowner in their right mind would commit to a mortgage at a rate of 7 per cent or more when they can borrow at 2.5 per cent—especially when it involves locking in over 10, 20, or 30 years, and pay close to twice as much in costs. So why would the federal government make the Canada Infrastructure Bank rely on higher-cost private finance? This may appear to be good politics, but it’s terrible public policy. We could build almost twice as much infrastructure through the Canada Infrastructure Bank if it was financed at the lower rates available for direct public borrowing instead of using higher cost private finance.”
— CUPE economist Toby Sanger, releasing his Canadian Centre for Policy Alternatives report. Read more.
“It is important to note that investors are most likely to prioritize those projects with the highest return and lowest risk, as one would expect. Therefore, it is the higher-value assets which are most likely to be subject to private ownership. Since it is Canadian taxpayers that will pay for these assets regardless of whether they are publicly or privately owned, this does beg the question: Why would taxpayers sell their most valuable assets to the private sector, thereby transferring these high risk‑adjusted returns from the public sector to the private sector?…
“Finally, even if we did have all of this information, the case for establishing the CIB is not compelling, as it has the potential to increase overall costs to taxpayers while privatizing the most high-return, low-risk infrastructure assets. So, why the CIB? We don’t know, and ‘just because innovation’ is not a good enough answer.”
— Azfar Ali Khan and Randall Bartlett, Institute for Fiscal Studies and Democracy. Read more.
“The bank is being presented to the public as a way to attract billions of private sector dollars to help pay for our public infrastructure. But the bank’s unusual design will also, for the first time, give powerful private institutional investors — even foreign-owned entities — the opportunity to actually own important pieces of Canadian infrastructure, with the ability to charge us fees for using them.”
— Linda McQuaig, in her Toronto Star column. Read more.
“A lucrative equity trading game is afoot and the Canada Infrastructure Bank, with its stated aim of expanding opportunities for private equity taking, will certainly encourage the expansion of this share-swapping market, putting Canadians at further risk of service cuts, inflated fees, reduced ownership transparency, and diminished public control over things that should be in public hands.
— Heather Whiteside, University of Waterloo assistant professor of political science, in a Toronto Star column. Read more.
“For any project, Canadian taxpayers will end up holding the fiscal bag through higher fees and taxes, whereas the government could finance the project at much cheaper rates. This makes no economic sense, which raises the question, is the government doing this simply as a way of thanking their financial supporters? There is a more sinister argument looming under all this, and it regards the role of public spending and the privatization of the state. Indeed, with all these musings about privatizing airports, ports and public spending, Trudeau is in fact championing the privatization of the state itself, robbing it further of its powers to create jobs and regulate unstable markets. This is clearly not what Canadians were expecting when they elected him last year.”
— Laurentian University economics professor Louis‑Philippe Rochon, in a CBC News commentary. Read more.
“The Liberals believe the Infrastructure Bank will hold about $150 billion within 10 years. Financed through 2 per cent bonds, the annual interest cost on $150 billion is $3 billion. But at 8 per cent, the cost is $12 billion. A difference of $9 billion in corporate welfare will be paid by your taxes, road tolls, service fees and bus fares. It extracts money from the middle class and pipelines it to the affluent. At $9 billion, Trudeau would be wasting more on a single corporate welfare program in one year than he plans to invest in child care or housing over a decade - programs that would actually help middle class Canadians.”
— Tom Parkin, Sun Media columnist. Read more.
“Pension funds such as the Caisse de Depot, and other large investment funds need higher returns and what better place to turn to than public infrastructure? This would provide large financial institutions with secure revenue streams through the “ownership” and “control” of public assets. These public-private investments can yield private investors very high rates of return, while leaving the government to take much of the risk.”
— former senior Liberal finance officials Scott Clark and Peter DeVries. Read more.
“The infrastructure bank portion of Bill C‑44 will be studied for just one hour. For something as significant as this, with $35 billion of taxpayers’ dollars, to be studied at committee for one hour is absolutely not enough time. Within the motion that has been put forward today, the NDP has requested that this be brought back to the House separately so we can have a wholesome debate on it. Unfortunately, the government has invoked time allocation. It is shutting down debate and giving one hour in committee. This is absolutely unacceptable.”
— Conservative MP and former Surrey, B.C. mayor Dianne Watts, speaking in the House of Commons in support of an NDP motion that forced a debate about the bank, and that called for the bank to be removed from the omnibus budget bill.