Trudeau Retools Canada Infrastructure Bank for Covid Recovery

(Bloomberg) -- Prime Minister Justin Trudeau mapped out a new plan for Canada's infrastructure bank as his government looks for ways to spur long-term economic growth after the Covid-19 pandemic.

The new strategy commits C$10 billion ($7.5 billion) over three years through the Canada Infrastructure Bank and is expected to create 60,000 jobs across the country, the government said Thursday.

Clean power is the largest spending item, with C$2.5 billion earmarked for renewable energy generation and storage. The plan commits C$2 billion each to developing broadband Internet in rural areas and to retrofitting buildings to become more efficient.

Agricultural irrigation projects will get C$1.5 billion, and another C$1.5 billion will be directed toward zero-emission buses and electric vehicle charging infrastructure. The remaining C$500 million will be used to speed up projects already in the bank's pipeline

“With smart, targeted investments, we can get people back on the job and grow the economy, while building a healthy, sustainable future for everyone,” the prime minister told reporters in Ottawa.

What Is Trudeau's Infrastructure Bank and How Does It Work?

Trudeau was joined by Infrastructure Minister Catherine McKenna and Michael Sabia, the former chief executive officer of provincial pension fund Caisse de Depot et Placement du Quebec who was named chairman of the government-run bank in April.

News of the plan was first reported by the Canadian Press agency and Globe and Mail newspaper.

The Liberal government created the infrastructure bank in 2017, endowing it with a budget of C$35 billion. Its aim is to invest in or give loans to large-scale projects in partnership with institutional investors like pension funds.

Money, however, hasn't flowed swiftly, leading to a shakeup in the bank's leadership this year. Sabia told reporters a new CEO would be named in coming weeks.

Trudeau opted to headquarter the bank in Canada's financial capital of Toronto, despite a push at the time by civic leaders in Calgary -- the heart of the nation's oil patch -- and elsewhere. Its first investment was a C$1.3 billion commitment in 2018 to help build a light-rail network in the Montreal area.

©2020 Bloomberg L.P.