Thursday, June 1, 2017

The Infrastructure Bank: Another Taxpayer-Funded Subsidy To Big Business

There are undoubtedly those who will never accept the fact that in electing Justin Trudeau and his sunny band of men and women, they were, in fact, putting into power a group as neoliberal as the outgoing Harper regime. It is a hard truth, one that I have had to accept despite the fact that mine was one of the many votes that put the Liberals back into power.

The latest evidence of this sad truth is found in new information about the Canadian Infrastructure Bank, a scheme ostensibly designed to raise private capital to fund various projects to rebuild our steadily decaying roads, bridges, etc.
Federal investments doled out through the government’s new infrastructure financing agency may be used to ensure a financial return to private investors if a project fails to generate enough revenues, documents show.

What investors have recently been told — and what the finance minister was told late last year — is that if revenues fall short of estimates, federal investments through the bank would act as a revenue floor to help make a project commercially viable.

Experts say the wording in the documents suggests taxpayers will be asked to take on a bigger slice of the financial risk in a project to help private investors, a charge the government rejects.
The devil, as they say, is in the details:
An October briefing note to Finance Minister Bill Morneau ahead of the fall economic update where the government unveiled the financial plan for the bank, said federal funding could be structured in such a way that the bank’s “return on investment will only materialize if defined institutional investor revenue thresholds are met.”

“The infrastructure bank could enter in the capital structure to bridge the gap between reasonable returns on investment for investors and the revenue generation capacity of specific infrastructure projects,” reads the briefing note, obtained by The Canadian Press under the Access to Information Act.
In other words, if I interpret this correctly, should revenues for private investors fall below expectations, we, the taxpayers, will be propping up their profits.

Despite my aging olfactory system, I am forced to conclude that this scheme does not pass any reasonable smell test.


  1. I don't think anyone saw this comming Lorne and I include myself in that.Trudeau is not only carrying on with Harper's neoliberal policies, he is implementing them at an astonishing speed. Harper implemented his neoliberal policies incrementally.

    This government went rogue almost right out of the starting gate. They have also NOT been given the mandate from Canadians to implement all the policies that their neoliberal agenda requires.

    This neoliberal promotion by Trudeau comes with many costs to the Canadian people and these costs are not just economic. In the long run it may even cost us our sovereignty.

    I notice the government lately is legislating more wide spread secrecy. This tells me that there is nore corruption and deception coming.

    The policies that are inimical to Canadian freedom, the secrecy, the chronic deceit and lies and Trudeau's complete betrayal of the Canadian people on a scale that has no equal to previous prime ministers, including Harper and Mulrony. Who would have thought?

    1. The traditional arrogance and duplicity of the Liberals is now back in full force, Pamela. I wonder what it is about our democracy that leads to such ignominious leadership and pathetic representation.

  2. I suppose setting a floor is a way to minimize private sector risk and thereby getting a better deal from the private capital side. But, if you're going to have a floor you should be willing to introduce a cap. We've had toll roads here that paid for themselves many times over despite government promises that once the investment was recovered the tolls would be removed. This is just an area where, with the passage of time, graft can set in almost unnoticed.

    1. It seems to me, Mound, that the risk is borne entirely by the public here. More of the usual corporate welfare, perhaps?