Canada: Selected Issues and Analytical Notes

IMF Staff Country Reports, July 13, 2017

Source details

The CIB will be allocated Can$35 billion over an 11-year period.
It will add to, and not replace, existing methods of financing public infrastructure at all levels of government, including the Federal Government’s Can$187 billion Investing in Canada plan covering 12 years.
The CIB will be a wholly government-owned Crown corporation, subject to provisions of the Financial Administration Act (FAA), including the requirement to prepare a corporate plan, operating budget, and capital budget, for approval by the Government.
The CIB and its investments will be on the federal government’s balance sheet.
Infrastructure-related special purpose vehicles (SPVs) in which the CIB invests will not be on the government’s balance sheet.

Worldwide, there are trillions of dollars looking for safe returns over the long-term.
Attracting private capital requires offering a rate of return acceptable to the investor.
The risk-adjusted rate of return sufficient to attract an investor is not known with precision ex-ante.
Investors will seek the highest rate of return possible above its minimum threshold.

CIB structure: wholly government-owned Crown corporation governed by FAA provisions and subject to government approval of corporate plan, operating budget, and capital budget.
Fiscal reporting: CIB and its investments recorded on the federal government’s balance sheet, while SPVs used for infrastructure projects remain off the government’s balance sheet.

Relevant subject areas: Financial institutions, Financial sector policy and analysis, Housing prices, Infrastructure, Macroprudential policy instruments, Mortgages, National accounts, Prices, Taxes, Transaction tax.
Keywords included in the report: Australia and New Zealand, CIB investment, CR, credit growth, Global, house price growth, Housing prices, Infrastructure, infrastructure assets, infrastructure investment, ISCR, LTV ratio, Macroprudential policy instruments, mortgage credit growth, Mortgages, stamp duty, Transaction tax.

Source: International Monetary Fund. Canada: Selected Issues and Analytical Notes, IMF Staff Country Reports 2017, 211 (July 13, 2017).