OTTAWA -- The new chief executive of the federal infrastructure agency says it will be nine to 18 months before it will be ready to announce its first investment.
The Trudeau government today announced Pierre Lavallee, a former senior executive of the Canada Pension Plan Investment Board, will be the first CEO of the $35-billion Canada Infrastructure Bank.
The bank is a key component of the Liberal government's long-term economic growth strategy with a mandate to use public funds to attract private capital to build revenue-generating public infrastructure projects such as pipelines, electricity grids and transit.
Lavallee told The Canadian Press there is no deadline for making the first investment, but a lot has to happen before then.
"This is a startup, a very well funded startup, but nonetheless a startup operation," he said. "So we need to hire people, we need to put in place the right investment decision-making processes, we need to identify the projects and we need to line up financial partners. All of that will take some time ... nine to 18 months perhaps."
Lavallee said he has no comment on any particular project options, including the Kinder Morgan Trans Mountain pipeline.
However the timeline of up to a year and a half before the bank is ready to make its first investment announcement suggests the government won't be able to turn to the bank to save the pipeline project if Kinder Morgan chooses not to go forward next week.
The company has set May 31 as a deadline to make a decision on whether to move on with construction of the $7.4 billion pipeline that will twin an existing line to bring three times as much oil to Kinder Morgan's marine terminal in Burnaby, B.C., from Edmonton. The company has investment jitters because of a court challenge from the B.C. government over whether the province can regulate what flows through the pipeline.
B.C. wants to be able to stop additional oil flows unless or until it can be convinced a spill of the diluted bitumen can be properly cleaned up.
Finance Minister Bill Morneau said last week the federal government is willing to cover cost overruns caused by political uncertainty, but also said if Kinder Morgan pulls out there are other investors eager to step in. He has not said who they may be, but many have publicly wondered if the infrastructure bank is an option.
The bank has been criticized by political rivals who argue it will boost corporate profits by forcing Canadians to pay twice for these projects -- first through the treasury and then through user fees, such as tolls.
Some opponents have warned the bank will put the priorities of wealthy investors ahead of ordinary Canadians, whom they say will be stuck carrying too much of the risk.
Lavallee most recently served as senior managing director and global head of investment partnerships at the CPPIB, where he led a team that managed about $94 billion in assets.
The government said Lavallee will create the bank's strategy, assemble a team, establish investment policies and lead partnerships with global institutional investors.
"The bank will help attract private sector investment to help public dollars go further and encourage innovation in helping communities advance their infrastructure priorities," Infrastructure Minister Amarjeet Sohi said in a statement.
