The Canadians Are Building a National Infrastructure Bank

In November 2016, Canadian Finance Minister Bill Morneau stood up in the House of Commons and announced plans to create a new infrastructure bank, a Canada Infrastructure Bank, for the country. Building infrastructure and creating jobs are popular themes that resonate with many voters in Western countries. Tapping on wealth fund, pension and infrastructure asset manager hunger for suitable infrastructure opportunities, the bank would seek to attract C$ 4 to C$ 5 in private capital from institutional investors for every C$ 1 of Canadian federal money. The proposed bank aims to have C$ 35 billion in capital to help finance infrastructure projects. C$15 billion would come from federal infrastructure funding, while C$ 20 billion would be solicited from institutional investors. The formation of a new infrastructure bank was a campaign promise the Liberals talked about during campaign season. However, legislation to actually form the bank will come after Canada’s federal budget.

The reality is that most institutional investors like sovereign funds focused on infrastructure are attracted to brownfield investments, while governments want new construction (greenfield). This infrastructure bank seeks to give assurances for investors to take on large greenfield infrastructure investments.

Beginning with Leech

Canada’s Liberal government seeks to partner with Canadian pension funds and overseas investors such as sovereign funds to back country infrastructure. The government needs a networking chief with extensive contacts. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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