Kevin Carmichael: Star-crossed bank will only succeed if investors are confident it operates free of political interference
Prime Minister Justin Trudeau, the daily face of his government’s response to the COVID crisis, wasn’t going to missa $10-billion announcement.
So there he was on Oct. 1, big-footing his infrastructure minister, Catherine McKenna, to leadthe press conference on the Canada Infrastructure Bank’s new spending plans.
The Toronto-based Crown corporation is supposed to have little to do with the Prime Minister’s Office, but never mind that. For Trudeau, the appearance came with the added bonus of getting to place himself above the bank’s chair, Michael Sabia, a legend of Canadian business who commands something the prime minister and his government lack with the Bay Street crowd: credibility. If you were Trudeau, you would have crashed that party, too.
That’s politics. Former prime minister Stephen Harper was playing the same game in 2013 when he summoned Stephen Poloz, the new central bank governor, fora photo-op, even though the central bank’s only contact with the government is technically supposed to be just the occasional meeting with the finance minister. Some leaders can’t help reminding everyone who’s boss.
Trudeau did Sabia no favours by showing up for the announcement of CIB’s new “Growth Plan,” which puts major cash on the table for private investors willing to partner with the infrastructure bank on initiatives related to clean energy, retrofitting buildings to make them greener, electric buses and agricultural irrigation.
The star-crossed infrastructure bank, which was seeded with $35 billion in 2017 that it has struggled to spend, will only succeed if investors are confident it operates free of political interference. Thanks to Trudeau, it is now fair to wonder who is calling the shots, which might be why Sabia made a point of stating that the new initiative was his doing, not that of the politicians who joined him in front of the cameras.
Source: Kevin Carmichael | Financial Post