Canada Infrastructure Bank set to fall well short of 2028 investment target: PBO

Power transmission lines are seen with the Rocky Mountains in the background near Pincher Creek, Alta., on Thursday, June 6, 2024. THE CANADIAN PRESS/Jeff McIntosh

OTTAWA — Parliament’s fiscal watchdog is projecting that the Canada Infrastructure Bank will fall more than $20 billion short of its investment targets for the coming years.

In a new report released Thursday, the Office of the Parliamentary Budget Officer said the infrastructure bank is on track to disburse $14.9 billion by 2027-28 - well below its $35-billion goal.

That sum is also $1 billion lower than earlier PBO projections from 2021.

The bank was launched in 2017 and invests alongside private and public sector partners to help get green energy and other infrastructure projects off the ground in Canada.

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The infrastructure bank also has sector-specific investment goals for five priority areas - broadband, public transit, clean power, green infrastructure, and trade and transportation - ranging between $3 billion and $10 billion each.

But the PBO said the Crown corporation is not on track to meet any of those targets either.

Expanding the funding horizon out to 2029-30, the PBO’s projections see only the public transit sector meeting its $5-billion investment goal.

The report said the infrastructure bank already has hit its goal of investing $1 billion in Indigenous-led projects.

In a media statement Thursday, the Conservative party said the CIB has been a “failure.”

The party pointed to the PBO’s conclusion that, since its inception, two-thirds of the CIB’s co-investments have come from public sector partners, rather than private industry.

The PBO noted that, since 2022-23, that ratio has grown closer to an even split between public and private funding sources.

The Conservatives said the Liberals need to “get the government out of the way so builders can build again” and promised that a Conservative government would encourage investment by cutting taxes and red tape.

The Canadian Press reached out to Infrastructure Minister Gregor Robertson’s office for comment but has not received a response.

In the Canada Infrastructure Bank’s market update for the first quarter of this fiscal year, it said its investments to date are already worth $16.8 billion.

Katarina Michalyshyn, the author of the PBO report, said in an email Thursday that CIB investment estimate tracks financial closes - the point at which deals are struck but the money has yet to flow.

The PBO’s report, on the other hand, focuses more on disbursements, or the point when funding has actually been transferred for the project.

The PBO expects disbursements by 2027-28 to come in two per cent lower - or $350 million less - than the CIB’s most recent projections.

Based on the pace of investments to date, the fiscal watchdog sees the infrastructure bank hitting its disbursement goal of $35 billion by 2034-35 - seven years after its deadline.

The PBO says that, if it were using financial closes as the benchmark, it would predict the bank will hit that goal by 2029-30.

A spokesperson for the CIB said in a media statement that the infrastructure bank has “a lot to be proud of” so far. The CIB has now invested in 100 projects over its eight years in operation, with seven completed.

The spokesperson noted that projects typically take three to five years of funding before completion, which is why the CIB’s financial close figures will lag behind disbursements.

Housing, Infrastructure and Communities Canada said in an emailed statement that the bank “received statutory funding of $35 billion to increase investment in infrastructure in Canada, with no set timeline to commit these funds.”

It said the bank “issues capital to project owners progressively, according to project milestones determined in its contracts with recipients, and as such does not have set disbursement timelines.”

The government’s long-term infrastructure plan states the bank is “responsible for delivering $35 billion on a cash basis over 11 years.”

By Craig Lord.