Montreal transit project highlights doubts about independence of proposed infrastructure bank

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Montreal transit project highlights doubts about independence of proposed infrastructure bank

OTTAWA — While senators continue to push back on the government’s plan to create an infrastructure bank, a funding announcement for a transit project in Montreal shows why the bank is controversial in some quarters.

On Thursday, Prime Minister Justin Trudeau promised $1.3 billion for Montreal’s planned regional light rail network, with the money coming as a grant from the government’s Investing in Canada infrastructure plan.

But the announcement also said the money could instead come from the Canada Infrastructure Bank — a proposed new agency that would use just enough public funding to attract private investment, thus reducing the requirement for taxpayer dollars.

Critics of the bank have expressed concern over its governance structure, saying it’s too susceptible to political influence.

The Montreal light rail project is being spearheaded by the Caisse de dépôt et placement du Québec, which manages the second-largest pension fund in Canada.

Documents show Caisse CEO Michael Sabia, who was with Trudeau in Montreal for Thursday’s announcement, was meeting with the infrastructure minister about potential transit funding while he sat on the government’s advisory council that came up with the idea to create the infrastructure bank.

This is part of the problem

Sabia met with Infrastructure Minister Amarjeet Sohi, along with the deputy minister and assistant deputy minister of infrastructure, on April 18, 2016, according to documents obtained through access-to-information laws by researcher Ken Rubin.

“The meeting will provide an opportunity to highlight transit infrastructure initiatives recently announced in the federal budget,” a departmental note states. “It is anticipated that Mr. Sabia will update you on recent developments related to the CDPQ’s transit projects, and may also seek information with respect to potential federal funding for these projects.”

Sabia also had an “introductory call” in January 2016 with Sohi and other officials, including an unidentified Prime Minister’s Office staffer. The briefing material said Sabia was expected to “update you on recent developments related to the CDPQ’s transit projects” and “may also share his expectations with respect to receiving federal funding for these projects.”

In March 2016, Sabia was announced as a member of the government’s Advisory Council on Economic Growth, the body that would go on to propose the Canada Infrastructure Bank to Finance Minister Bill Morneau in October 2016. The bank was subsequently incorporated into the federal budget, and its enabling legislation is in the budget bill being debated by the Senate.

A statement from Morneau’s office said that members of the council “are engaged as individuals,” and that each member has signed a letter of agreement that includes non-disclosure and conflict-of-interest guidelines.

“Though they’ve met with ministers, of course, they most often meet independently and on their own timeline,” it said. “It’s important to point out that the advisory council does not have a role in the policy development process beyond providing recommendations for consideration. In fact it is one voice among many.”

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Conservative MP Dianne Watts said it demonstrates the concerns people have had about the bank’s vulnerability to political influence.

“It’s problematic for sure,” she said. “When we look at who was on the advisory committee in terms of guiding the minister and staff in the writing of the legislation, or in reviewing the minister’s notes and presentations, there are registered lobbyists. This is part of the problem.”

In the meantime, the government and the Senate are still locked in battle over the budget bill, as senators consider multiple amendments.

Morneau was at the Senate finance committee on Thursday to take questions and urge senators to pass the legislation as is.

He seemed to score a big victory shortly afterward when Senate Speaker George Furey ruled an attempt by Sen. André Pratte to split off the infrastructure bank for more study as out of order. But the ruling was then overturned on appeal.

If the senators do split off the bank, then the House of Commons would have to decide whether to accept the Senate’s amendments.

Morneau told reporters his government is prepared to stand its ground.  “We believe the House of Commons has the authority to pass the budget bill, and we view (the infrastructure bank) as central to our budget.”

• Email: bplatt@postmedia.com | Twitter: btaplatt

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