CIB wants private sector financing to enter the “revenue stream” associated with water “assets”
In a transcript obtained by PressProgressCanada Infrastructure Bank CEO Ehren Cory eagerly proposed to let “private sector financing” reshape the supply of water “assets” – because water has a stable base of “paying customers”.
In leaked notes from a CIB board meeting on April 23, 2021, Cory said the bank has big plans to overhaul “the water sector.”
“Partnering with the public and private sectors means that we must engage with a wide variety of stakeholders in both the private and public sectors,” Cory told the board.
Water infrastructure, they said, is unique among public works projects because it “has an element of revenue flow associated with it” or “some form of repayment capacity”.
“Water has customers who pay to use it. It pays for a portion of the use of that asset,” Cory said. “When we talk about innovative models, what we’re really talking about is how you leverage them to drive innovation, to bring private sector funding to the table, to accelerate the renewal of our water sector.
That means, Cory said, a “hybrid funding model” – “both public and private.”
Through the Canada Infrastructure Bank, the Liberal government says it is trying to push cash-strapped municipalities to privatize their water systems
—PressProgress (@pressprogress) August 6, 2019
In 2020, the Infrastructure Bank announced its commitment to $20 million at “attracting private sector capital” to help renew the wastewater treatment system in Mapleton, Ontario, could serve as a model for the country.
Over the next few months, the city has launched plans to launch a PPP, with a proposal to set up a “debt refinancing package” to repay investors – plus interest. According to the IPC, in 2020 it was a “new model” for cash-strapped municipalities everywhere.
While later that year the city got out, the CIB was obviously still looking for opportunities until 2021.
Robert Ramsay, research officer for the Canadian Union of Public Employees, said it’s not a new model – “It’s a P3, it’s a revenue-based utility model “.
“There are many distraction techniques used to mask the business model of these schemes. These investors need to be repaid – through higher user fees or repayment plans,” he said.
Either way, Ramsay said, “it’s a huge public subsidy of private sector profits.”
While Cory said the CIB sewage plan doesn’t automatically mean higher rates for users — in 2018, youformer CEO of CIB said “the users will fund most of the operations”.
When asked if he stood by those comments, a CIB spokesperson said:
“It is widely recognized that Canada needs more infrastructure. The Canada Infrastructure Bank was created to explore ways to accelerate investment in infrastructure projects with significant public outcomes related to our priority sectors, and this may include forms of public, private and indigenous community.
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