Infrastructure bank possible option for funding U.S.-Canada high-speed rail
OTTAWA – Washington state is exploring whether Canada’s new infrastructure bank could help finance a multibillion-dollar proposal for high-speed rail between Vancouver and the U.S. northwest.
The Trudeau government’s soon-to-be-launched, $35-billion infrastructure bank will seek to use public funds as leverage to attract billions more in private investment for major infrastructure projects, such as bridges, transit systems and rail lines.
The legislative blueprint for the infrastructure bank also allows for the use public money to help bankroll projects “in Canada or partly in Canada,” provided there’s a financial benefit and a physical connection to the country.
The state of Washington has taken notice.
It’s looking at the infrastructure bank as a potential financing option for a long-discussed high-speed rail connection between Portland, Seattle and Vancouver, says one of the governor’s senior policy advisers.
Charles Knutson, an adviser for Washington Gov. Jay Inslee, said Ottawa’s infrastructure bank will be analyzed as a financing option in an ongoing feasibility study for the rail proposal.
Earlier this year, Inslee committed US$1 million towards a cost-benefit analysis of the “ultra high-speed” rail line that would see trains run at speeds of at least 400 km/h. The final report is due in December.
“We’ve heard from some of our Canadian counterparts that that’s a tool that we could explore and we’re open to looking into that further,” Knutson told The Canadian Press in an interview.
“The fact that it is something that could support cross-border projects seems to be a good match, but we’d need to know more.”
He added that the cost-benefit analysis will provide a better sense of the scope of the project and help determine what kinds of financing options would be available.
The high-speed rail link has support from political leaders in the region and from the business community, including high-tech giant Microsoft. They see it as part of a broader plan to deepen regional economic ties and contribute to a Seattle-Vancouver technology network dubbed the Cascadia Innovation Corridor.
Knutson, who attended a meeting between Inslee and Prime Minister Justin Trudeau in May, said they discussed the potential benefits of the high-speed rail project, including construction jobs, better workforce mobility and reduced road traffic.
“They both expressed their support for ultra high-speed rail that could improve connectivity, help grow business opportunities on both sides of the border,” he said.
“They talked about how this is an idea that’s time has come.”
Knutson said he doesn’t specifically recall hearing the infrastructure bank come up during the discussion, but noted other Canadian leaders have spoken about it with Inslee.
A spokesman for Amarjeet Sohi, Canada’s infrastructure minister, said the proposed Portland-Vancouver rail line would be legally eligible under the bank’s legislation.
“But ultimately any decision to move forward with assessing the project for a potential investment will be the bank’s to make,” Brook Simpson wrote in an email.
The bank is central to the Trudeau government’s economic growth strategy. It’s committed more than $180 billion for new projects over the next 11 years and, as part of the effort, its hoping to further boost investments with a lift from private cash.
But in order to attract private capital the projects will have to be designed to generate steady, reliable returns for investors through revenue streams such as user fees.
Sohi has argued the bank will be a tool to fund infrastructure projects that may not otherwise be built, or projects that public or private bodies can’t afford on their own.
The infrastructure bank has also been a source of controversy.
The government has faced heavy criticism about the bank, including allegations that argue it will put the priorities of wealthy investors ahead of Canadian taxpayers, who will be stuck assuming too much of the risk.
Political rivals have warned the Crown corporation will likely force Canadians to pay twice for their infrastructure – first via the public treasury and then through user fees that will generate corporate profits.
The Liberals also faced repeated calls to slow down its plan to create the bank amid concerns Ottawa was rushing through the legislation to create the bank without proper parliamentary scrutiny.
© 2017 The Canadian Press