Canada:Selected Issues and Analytical Notes

Publication Date:

July 13, 2017

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This paper describes the proposed Canada Infrastructure Bank (CIB) that 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. However, the infrastructure-related special purpose vehicles (SPVs) in which the CIB invests will not be on the government’s balance sheet. Attracting private capital requires offering a rate of return acceptable to the investor. Worldwide, there are trillions of dollars looking for safe returns over the long-term. 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.

Series:

Country Report No. 2017/211

Subject:

English

Publication Date:

July 13, 2017

ISBN/ISSN:

9781484309650/1934-7685

Stock No:

1CANEA2017002

Pages:

62

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