TRAN Committee Report

NDP SUPPLEMENTARY REPORT ON THE ROLE OF MCKINSEY & COMPANY IN THE DEVELOPMENT AND EARLY STAGES OF THE CANADA INFRASTRUCTURE BANK

The New Democratic Party agrees with most of the findings and recommendations of the Committee’s report which details the influence of McKinsey & Company on the creation and early stages of the Canada Infrastructure Bank(CIB). Specifically, the NDP supports the conclusion drawn by many witnesses that McKinsey’s influence in the creation and early operations of the CIB presents a troubling conflict of interest. The NDP also agrees with the recommendations calling on the government to, avoid the use of pro bono services from private consulting firms, increase its due diligence around conflicts of interest, minimize the CIB’s reliance on internal consultants by increasing internal capacity, and establish a sustainability requirement for all CIB projects.

This supplementary report aims to highlight further witness testimony detailing the systemic problems with both the use of external consultants, and the public-private-partnership (P3) model, that is central to the CIB’s mandate.

While the NDP supports the concept of an infrastructure bank, the Liberals’ chosen model for the CIB is inherently flawed, costs taxpayers more, leads to worse project outcomes, and increases the risk of to corruption. The committee heard from multiple witnesses who recommended that the CIB be reformed to a fully public model.

“The CIB must change its core mandate and reorient back towards a truly public model, wherein the beneficiaries are citizens, community members and Canadians across the country.”- Diane Therrien, Senior Research Officer, Canadian Union of Public Employees

These witnesses pointed out that, despite the assertions by the government and P3 advocates that P3s save the taxpayer money and offload risk onto private corporations, in reality, this model costs taxpayers more, reduces transparency and accountability, has poorer project outcomes, and leaves taxpayers holding the risk when projects fail.

“Independent audit studies that have looked at the P3 experiences have almost universally said this actually costs more and delivers less, whether they're cutting corners, whether they're reducing the wages of workers or whether it's the precarity of workers. What we do know is that we used to have a huge pool of capital to support infrastructure investment. It was called the Canada pension plan. That money was available at cost. Government bonds are lower than the normal prime interest rate. That's what supported municipalities, regions and provinces in the past.”- John Cartwright, Chairperson, Council of Canadians

“With regard to P3 models, we've seen and have experience with the fact that, again, it puts municipalities in particular in a precarious situation when they have reliance on these private corporations, if anything goes wrong. We've seen examples of that across the country. There was one in Edmonton where private waste collectors went bankrupt, and then trash wasn't picked up for a couple of weeks until the municipal government and the public works figured out a strategy to do that.” - Diane Therrien, Senior Research Officer, Canadian Union of Public Employees

In conclusion, given that the majority of research has shown that P3s are a more costly and risky model for citizens; and that with its current mandate, the CIB has not only been heavily influenced by corporate interests but has failed to live up to the promises made by the Liberal government, the NDP recommends that the core mandate of the CIB be reformed to a fully public model, designed to benefit the Canadian public rather than corporate interests.

NDP Recommendation

That the Government of Canada reform the core mandate of the Canada Infrastructure Bank to a public model, wherein the beneficiaries are citizens, community members and Canadians across the country, rather than private corporations and shareholders.