Infrastructure and Energy CommitteeNovember 22, 2017

Session AgendaCommittee Member Introduction

Committee Mandate

2017 Achievements

Infrastructure Funding: Now and into the future

Questions

Committee Members• Councillor Tony Caterina (Chair), City of

Edmonton• Councillor Andre Chabot (Vice Chair), City

of Calgary• Mayor Chris Warwick, Town of Hanna• Mayor Ralph Leriger, Town of Westlock• Deputy Mayor Trina Jones, Town of Legal• Councillor Bill Cocks, City of Medicine Hat• Mr. Kevin Nagoya, Town of Cold Lake• Mr. Marty Paradine, Town of Valleyview

Committee Mandate• The Energy Economy• Asset Management• MGA Change Management • Infrastructure Funding• Broadband

Key Achievements 2017Energy Economy

• Input into the Alberta Energy Regulator liability management review

• Working with municipalities impacted by the phase out of coal

Key Achievements 2017Asset Management

• $135,000 Grant from FCM

• Asset Management Hub available at auma.ca/advocacy-services/programs-initiatives

Key Achievements 2017Broadband

• Provided input into the CRTC’s broadband funding regime

• Recent Provincial outreach to AUMA regarding an upcoming survey

MSI Replacement

Infrastructure Funding

Infrastructure Funding: Now and Into the Future

Bruce McCuaig• Executive Advisor to the Privy Council Office on

the Canadian Infrastructure Bank • Former President and Chief Executive Officer of

Metrolinx• Former Deputy Minister at the Ontario Ministry

of Transportation• Ontario Ministry of Transportation for 15 years • Ontario Ministry of Municipal Affairs and

Housing for 10 years

Shawn Menard• Owner, Municipal Advocacy Solutions• Completed extensive research on

infrastructure funding across Canada • Public Policy and Government Relations

Practitioner• Former Government Relations Manager with

the Federation of Canadian Municipalities (FCM)

Innovative Financing: The Canada Infrastructure Bank

November 2017 – Alberta Urban Municipalities Association

Investing in Canada Plan• More than $180 billion in federal funding over 12 years to create long-

term economic growth; build inclusive, sustainable communities; and support a low carbon, green economy

$91.1BN Existing Funds

$21.8B GAS TAX FUND

$10.4B GST REBATE

$14B NEW BUILDING CANADA FUND

$12.7 LEGACY PROGRAMS

$14.4 BN Budget 2016

$81.2 BN Phase 2

$32.2 OTHER DEPARTMENTS*

POST SECONDARY INSTITUTIONS

RURAL BROADBAND

Infrastructure Bank

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Outline• Mandate• Functions• Governance• Investments• Tools• Illustrations• Progress and Next Steps

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Mandate• Bank’s mandate is:

to make investments in revenue-generating infrastructure projects that are in public interest, and,

seek to attract investment from private sector and institutional investors to those types of projects

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Functions• Act outlines functions to carry out Bank's purpose:

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Investment Non-investmentStructuring and delivering federal support for revenue-generating infrastructure

Acting as a centre of expertise on infrastructure projects involving private sector investment

Investing in projects, including through innovative financial tools(debt or equity, loan guarantees)

Advising governments on revenue-generating projects

Receiving unsolicited proposals from private sector investors

Working with all orders of government to collect and share data to inform future investments

Governance Arm’s length Crown corporation:

• Led by a Chief Executive Officer and governed by an independent Board of Directors

• Operate like a merchant or investment bank

Independent commercial decisions on how to structure project financing, if project deemed "bankable"

• Government responsible for setting the overall policy direction and high-level investment priorities of the Bank

• Governments determine public interest of projects eligible for consideration of support from the Bank or other contribution programs

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Tools• The Bank would invest $35 billion towards

transformative infrastructure projects (with $15 billion in expendable capital over 11 years)

• Wide breadth of financial instruments: • debt and equity investments; • loan guarantees; and,• other innovative tools

• Instrument choice and mix will depend on what makes most sense for any given project

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Investments• Bank would work cooperatively with all orders of

government as well as investors to identify a pipeline of projects and potential investment opportunities

• Due diligence on investments and approval process of projects consistent with private/institutional investors

• Investments would be made strategically, in the public interest, and aims to crowd-in private sector capital that would not have otherwise been invested and efficiently transfer risk

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Expertise• Serve as a centre of expertise on infrastructure projects in which

private sector or institutional investors are making a significant investment;

• Foster evidence-based decision making and advise all orders of government on the design of revenue-generating projects; and

• Collect and share data to help governments make better decisions about infrastructure investments

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Progress and Next steps• Canada Infrastructure Bank to be

operational in late 2017

• Legislation passed by Parliament

• Chair and Board of Directors appointed

• Head office to be set up

• Design and Structure

• Chief Executive Officer process underway

• Continued outreach

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Illustrative Example

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Risk Transfer

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Traditional Procurement

P3 Procurement

CIB Projects

Taxpayer Risk

Cost of Capital

10%2% 4% 6% 8%

100%

0%

Board of Directors• Janice Fukakusa, Chair• Kim Baird• Paul Bronconnier• James Cherry• Michele Colpron• Bruno Guilmette• Christopher Hickman• Poonam Puri• Stephen Smith• Patricia Youzwa

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New Federal Funding OpportunitiesShawn Menard Founder, Municipal Advocacy Solutions

Presentation to AUMA Infrastructure and Energy CommitteeNovember 2017

About the Presentation

Federal Budget 2017 Breaking Down $186 BillionMost Significant Opportunities for Municipalities in AlbertaLatest IntelligenceThe Future of Municipal-Federal Advocacy

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What was Delivered in Budget 2017

• National Housing Strategy – This Fall• A New Infrastructure Bank – By End of Year• Impact Canada Hub – ‘Smart Cities Challenge’• Phase 2 Infrastructure Funding

– Rural and Northern Funding Stream – Public Transit – Green Infrastructure – Social Infrastructure – Trade and Transportation Infrastructure

• Bilateral Agreements to be Signed

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Breaking Down The Plan

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Breaking Down The Plan• $186 Billion over 12 years

– $91 Billion Legacy Infrastructure Programs– $14 Billion from Budget 2016– $81 Billion from Budget 2017

• What portion of this is actually earmarked for Municipalities?

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Breaking Down The Plan• The simple answer is about 60%. $113

billion over 12 years.– The Legacy Infrastructure Programs (GTF, BCF, GST

Rebate) are about $45 Billion.– The Old Green, and Social Infrastructure Pieces

are about $16 billion.– From Budget 2016, of $14 billion invested,

municipalities will see about $8 billion.– From Budget 2017, of the $81 billion invested,

municipalities will see about $44 billion.

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Breaking Down The Plan• Of that $113 billion over 12 years, the

majority is actually ‘back end loaded’.• For example, of the $81 billion

committed in Budget 2017, municipalities will see about $44 billion, and within the first 5 years, $10 billion is allocated to 2022.

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Most Significant Opportunities For Municipalities in Alberta

• Public Transit – Largest Opportunity– Unlike Phase 1, Majority of Funding is Going to

New Builds• Water, Wastewater, Green Initiatives• Trade• Housing• Rural and Northern Funding• Smart Cities Challenge

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Most Significant Opportunities For Municipalities in Alberta

• Gas Tax Fund Bump• Disaster Mitigation and Adaptation• Culture and Recreation Funding• Rail Safety Improvement• FCM Based Funding

– MCIP– Asset Management– GMF

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Latest Intelligence

• How much will municipalities need to contribute? • When will this funding flow?• What are the outcomes the government is looking for?• Other intelligence• How to prepare

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The Future of Federal-Municipal Advocacy

• Cannabis and Public Safety• Gas Tax Fund• Conversation on Constitution? • The emergence of the municipal order of government as

power brokers• Next 2 election cycles

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The Future of Federal-Municipal Advocacy

Current Party Standings

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Questions?

Submit committee interest form by Friday, November 24!

auma.ca/about-us/about-auma/join-committee