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Taxpayer risk in Liberal infrastructure bank explored

0 83 Infrastructure

by The Canadian Press

OTTAWA —Federal investments doled out through the government's new infrastructure financing agency may be used to ensure a financial return to private investors if a project fails to generate enough revenues, documents show.
Taxpayer risk in Liberal infrastructure bank explored

The revenues attached to projects financed through the soon-to-be-created infrastructure bank are key to the government's plan to leverage private capital to pay for public roads, bridges and transit systems.

What investors have recently been told and what the finance minister was told late last year is that if revenues fall short of estimates, federal investments through the bank would instead act as a revenue floor to help make a project commercially viable.

That would be the case when the bank takes a subordinated equity position, where the government buys ownership shares in a project, and would only be reimbursed after those higher up the equity ladder receive their repayments.

Experts say the wording in the documents suggests taxpayers will be asked to take on a bigger slice of the financial risk in a project to help private investors, a charge the government rejects.

A spokesman for Infrastructure Minister Amarjeet Sohi said the infrastructure bank would only be liable for its own stake in a project and the possibility of lower-than-expected revenues would be part of the risk private investors assume in financing a project.

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