RC110 JanFeb 2024 - Magazine - Page 4
EDITOR’S NOTE
BANK ON IT
JANUARY/FEBRUARY 2024
VOLUME 22, NUMBER 1
by John Tenpenny
YOU HAVE TO GIVE DOUG FORD points for audacity.
Despite the province of Ontario facing a $5.6-billion de昀椀cit, Ford’s government
doubled down and announced it will invest $3 billion to create the Ontario
Infrastructure Bank (OIB).
According to the province, the new bank will be an arms-length, board-governed
agency to enable public-sector pension plans and other trusted institutional investors
to participate in large-scale infrastructure projects across the province. “Projects will
be focused on long-term care homes, a昀昀ordable housing and infrastructure in the
municipal, community, energy, and transportation sectors.”
The government hasn’t given a speci昀椀c timeline for launching the bank, which
will be set up as a provincial agency with a board of directors appointed by the
government.
Ontario faces a signi昀椀cant infrastructure de昀椀cit and cannot a昀昀ord to pay for it
through the tax base alone, so it’s not surprising the province has launched its own
infrastructure bank.
Ontario isn’t alone; there are a growing number of infrastructure bank-like
organizations globally that are focused on creating innovative partnerships
between public and private organizations for the purpose of accelerating public
infrastructure.
Initial reaction was positive from some sectors: “By prioritizing energy
infrastructure, the OIB will be critical as Ontario embarks on the most consequential
period of growth for the electricity sector in a century,” said OPG president and
CEO, Ken Hartwick.
The theory, attracting private investment in infrastructure projects that reduce the
burden on taxpayers, is a good one.
It might also be a touch naïve. It’s a little like Field of Dreams—build it (public
infrastructure funding), and they (private sector) will come.
When the Canada Infrastructure Bank (CIB) was created in 2017, it was widely
criticized for not being able to attract private investments and was considered
a failure by many. However, after some growing pains, the CIB 昀椀gured out by
providing long-term, low-cost, risk-sharing loans, projects become more attractive
to private and institutional lenders. This has sped up projects and cost Canadian
taxpayers less.
More, though, needs to be known about how the OIB will operate and who will
oversee it. According to government, the OIB Board of Directors “shall manage or
supervise the management of the Ontario Infrastructure Bank’s a昀昀airs and will be
comprised of at least three and at most 11 members.”
Hopefully the province will take its own advice and follow the example of
well-governed public infrastructure banks, such as Germany’s KfW—established
in 1948—which has a board comprised of not only government o昀케cials, but also
representatives from municipal government and the business community.
The model of public-private partnership has proven it can work. Let’s just hope
Ford’s Ontario Infrastructure Bank doesn’t succumb to the same issues that beset the
province’s Greenbelt legislation.
John Tenpenny is the
editor of ReNew Canada.
john@actualmedia.ca
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RENEW CANADA – JANUARY/FEBRUARY 2024
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