MPs had some tough questions about spending at the Canada Infrastructure Bank (CIB) this week, including why salary bonuses ate up nearly a fifth of the bank’s operating costs last year.
Bank executives received bonuses totalling over $1.2 million in 2023, which works out to about $204,000 per senior manager, according to a story in Blacklock’s Reporter.
The information was tabled in the Commons in a cabinet response to an Inquiry of Ministry.
Another $6.9 million in bonuses was paid to 105 bank employees, or about $66,000 per employee. Conservative MP Dan Muys calculated that the combined bonuses of $8.1 million represent about 18 percent of the bank’s total operating costs.
“So that’s 18 per cent of your operating costs,” Mr. Muys told bank CEO Ehren Cory. who was testifying before the Commons Transport, Infrastructure and Communities Committee on April 9.
“That seems like a very excessive amount. Do you think that’s justifiable?” he asked.
Mr. Cory, who makes around $600,000 a year, defended the bonuses, saying the bank’s “compensation structure is ”benchmarked rigorously” to the private sector.
“People who work at the CIB come because they believe in the public sector mission of the bank, and they take compensation that does not match what they can get in the private sector,“ Mr. Cory said. ”But it does need to be at least competitive. So that’s why we benchmark, and it’s a mix of base salary and bonus.”
Mr. Muys replied, “I would find that 18 per cent of your operations to be bonuses is excessive, but we’ll disagree on that.”
Parliament created the Canada Infrastructure Bank in 2017 with $35 billion in financing and a mandate to build new public works by attracting private investment. In a 2022 report, the transport committee recommended abolishing the bank due to its lack of efficiency, citing problems with costs and transparency as well.
The bonuses were disclosed at the request of Conservative MP Leslyn Lewis, who told the transport committee the bank “has spent more on salaries and overhead than on actual infrastructure projects.”
She asked, “Why should Canadians who are struggling with daily living expenses not be concerned about these hefty bonuses and salaries?”
Mr. Cory answered, “We take every taxpayer dollar extremely seriously,” and said staff costs “are all in pursuit of making investments that both build new infrastructure and deliver the public benefits of greenhouse gas reductions.”
The transport committee is reviewing the bank’s approximately $900,000 loss on the Lake Erie Connector, a proposed 117-kilometre underwater electrical transmission line from Haldimand County, Ontario, to Erie County in Pennsylvania. The CIB spent the money on lawyers and consultants for the project, which was suspended because estimated costs were too high.
“So even though no official work began on the project, the CIB managed to spend close to a million dollars … and that was largely spent on consultants and lawyers,” said Ms. Lewis.“My first question to Mr. Cory is where did the $900,000 of taxpayers’ money go?”
Mr. Cory said costs included permits as well as consultants and “technical advisers who understand electricity markets, have detailed models, who helped model for us how electricity would flow over the line.”
That spending was “due diligence money,” he said, “and as in any large transaction, I think that’s money well spent and taxpayer money well used.”
Ms. Lewis responded, “Money well spent is of no value now because the project is cancelled,“ and said Mr. Cory had confirmed that ”$900,000 of taxpayers’ money has now been wasted because the project is now cancelled.”
There is a chance the Lake Erie project could be restarted because a large transmission operator is now its new owner, Mr. Cory said.
“One of the first things someone taught me in this industry is every project dies a few times before it really lives,” he said. “This project was suspended, but it continues apace. It is a necessary part of the transmission grid in North America and we still think it'll get built.”
In his opening remarks, Mr. Cory lauded the work the CIB has done since its founding.
“Over the last three years the CIB has really hit its stride,” he told the committee. “We have now made more than 70 investments that have reached financial close, investing nearly $13 billion of taxpayer money in projects in every region of Canada.”
More infrastructure is needed across the country, but governments don’t have enough money to pay for it by themselves, he said. “We deliver value for taxpayers by making loans that get paid back with interest,” he said.
