The Canadian Infrastructure Bank has a mandate to disburse CIB’s $35 billion in capital contributions by the end of the 2027-28 fiscal year. This commitment is nowhere near enough for it to meet its ambitious pledge to invest $35 billion. The CIB started out in 2017 with a really ambitious mandate. It leads the nation in promoting innovative green energy solutions and more proactive, efficient infrastructure projects nationwide, working with private and public sector partners. Recent projections from the Parliamentary Budget Officer (PBO) show that gaining the target amount will not be achievable until 2034-35. This timeline is well beyond what we had originally expected.
The current disbursement target of $14.9 billion is $1 billion lower than previous PBO projections in 2021. The CIB’s investment strategy includes specific goals in five priority areas: broadband, public transit, clean power, green infrastructure, and trade and transportation. Each sector is expected to attract investments of $3 billion to $10 billion. Public transit is right on track to meet its $5 billion investment target by 2029-30.
Challenges in Meeting Investment Goals
The CIB still has a rocky road ahead if it’s to achieve $10 billion in investments. Infrastructure projects typically require at least three to five years of funding certainty before they reach the ground. This lag creates a bit of a mirage between financial close numbers and real world disbursements. While financial close figures show when deals are agreed, the cash is still yet to flow. Conversely, the CIB continues to experience challenges as it works to achieve its stated goals.
Alongside these sector-specific investments and building upon its original mandate, the CIB has been successful in allocating $1 billion directly to Indigenous-led projects. Though this is a significant achievement, the slow pace of overall investment has led to major questions on the effectiveness and future of the CIB.
“Responsible for delivering $35 billion on a cash basis over 11 years.” – Government’s long-term infrastructure plan
The Conservative party, currently in opposition, has been critical of the CIB’s ability to deliver and called it a “failure.” More strongly than ever defend the idea that when it comes to economic development, the federal government should help build infrastructure, not block it.
Government and Public Sentiment
The CIB pushes for change by aligning with the government’s own long-term infrastructure agenda. Its success thus far is measured by an equally daunting task of $35 billion spent in a limited amount of time. The CIB spokesperson highlighted that despite current challenges, there remains “a lot to be proud of” regarding the projects underway.
According to Housing, Infrastructure and Communities Canada, the CIB has won $35 billion in statutory funding. This grants program is meant to encourage private capital to flow into Canadian infrastructure. They conceded there is no firm deadline by which to obligate these dollars. This injects yet one more layer of uncertainty into the future operations of the CIB.
Future Outlook
Moving forward, realizing this $4 trillion+ investment target will take new ideas and stakeholders working together in partnership. We agree with the PBO’s finding that the current pace is unsustainable. If nothing changes, it will be at least 2034-35 before they get to their target of $35 billion.
The CIB largely avoids investing in short-lived assets, focusing on clean power and green infrastructure. Smart renewables implementation This focus fits like a glove with Canada’s sustainable development agenda generally. Yet, stakeholders still demand shortened timelines and faster trains in order to leverage the most investment possible.