OTTAWA—A new federal agency designed to fuse public and private dollars to help build infrastructure in Canada could end up building new roads and bridges south of the border.
The legislation for the Liberals’ proposed infrastructure bank would allow the arm’s-length organization to use public money to help bankroll or financially backstop projects that are “in Canada or partly in Canada.”
The key for the government is that there has to be a financial benefit and a physical connection to the country, meaning Canadian dollars won’t be building any infrastructure solely in the United States or anywhere overseas.
The Liberals are infusing the bank with $35 billion in government funding, hoping that the money can leverage three or four times that much in private dollars to build infrastructure in Canada.
Some observers and investors are concerned that the legislation as written gives politicians too much control.
Benjamin Dachis, associate director of research at the C.D. Howe Institute, says investors could be scared away from working with the bank if they don’t feel that there are strong firewalls to prevent political meddling in long-term projects.