| OTTAWA, March 22
OTTAWA, March 22 Canada plans to have its
infrastructure bank, a key initiative set up to facilitate
private financing for infrastructure projects, open for business
by the end of the year, Finance Minister Bill Morneau said in
his federal budget on Wednesday.
However, Morneau's budget contained few other new details on
the new agency, which the Liberal government committed to set up
last year to provide access to C$35 billion ($26.25 billion) to
help fund major projects that might not otherwise get built. It
plans to supplement public investment with funding from private
investors such as pension and sovereign wealth funds.
Infrastructure spending was a big part of the ruling
Liberals' successful election campaign in 2015. The government
acknowledged in Wednesday's budget, however, that the
infrastructure and other stimulus measures laid out so far are
now estimated to lift economic growth by 0.4 percent in the
first year of implementation. That is slightly lower than the
0.5 percent it had expected in last year's budget.
The government said on Wednesday it would invest the C$35
billion over 11 years using loans, loan guarantees and equity
investments with a focus on projects such as regional transit
plans, transportation networks and electricity grid connections.
No new information was provided on how large a role private
investors would play or on specific projects that would be
financed through the bank.
A government advisory panel recommended last year it could
target C$4 to C$5 of private funding for every C$1 provided by
taxpayers to fund projects.
The government said it would propose legislation soon for
establishing the bank and would begin a process of identifying
the bank's chief executive and chairperson of the board of
directors, with a goal of having it operational in late 2017.
Doug Porter, chief economist at BMO, said there were still
more questions than answers on how it would be executed.
"I think it is going to be difficult to do," he said. "I
think it speaks to the point of how complex an undertaking we're
talking about. I would not be shocked if it takes longer than
what they're expecting."
The budget showed that over the 11 years, C$15 billion for
the planned Canada Infrastructure Bank will come from money
provided for public transit, green infrastructure and trade and
transportation in the C$81.2 billion long-term infrastructure
plan, but not from money provided for social infrastructure.
($1 = 1.3331 Canadian dollars)
(Additional reporting by Matt Scuffham in Toronto; Editing by