OTTAWA — The head of the Asian Infrastructure Investment Bank says Canada’s new membership in his multinational organization will create opportunities for Canadian companies abroad and even offer indirect support for Ottawa’s efforts to build bridges, highways and rail lines at home.
The Beijing-based multilateral development bank will bring a number of economic benefits to Canada and lift the international profile of the Trudeau government’s own $35-billion infrastructure bank among investors, Jin Liqun said in an interview.
The Canada Infrastructure Bank, a key component of the Liberal government’s economic growth strategy, seeks to use public funds as leverage to attract billions more in private investment for major infrastructure projects.
Last year, Ottawa committed $256 million over five years in its budget plan to join the Asian Infrastructure Investment Bank, which now has 84 members. The actual budget legislation, however, showed that the federal government left room to dedicate as much as $470 million to the bank.
The issue has become a source of political debate in Canada — the Liberals have come under attack by rivals for making such a large commitment to an organization based in China.
Jin argued there are many reasons that Canada should be part of his bank.
While it won’t translate directly into any immediate infrastructure projects in Canada, Jin predicted it would open doors for Canadian firms to bid on overseas projects. The infrastructure itself will also improve connectivity in emerging markets and open up new trade opportunities for Canada, Jin added.
The effort will also serve as sales pitch of sorts for Canada’s infrastructure bank, Jin said, noting that he’s already discussed the possibility of co-operation, in broad terms, between the two organizations.
Such co-operation could “help mobilize private-sector resources to work with Canadian infrastructure bank,” said Jin, who met Tuesday in Ottawa with Finance Minister Bill Morneau.
Jin said his organization works with a wide range of investors, including sovereign wealth funds, private companies, pension funds and insurance companies that could be interested in making investments in Canada’s infrastructure bank.
“By this kind of exchange of information we can also help the outside better understand the mandate of Canadian infrastructure investment bank.”
The federal government, including Prime Minister Justin Trudeau, has made efforts to woo foreign investment to help the country upgrade existing infrastructure and build new projects. To make projects financially attractive for investors, Ottawa has mandated that eligible projects will have to generate revenue through user fees, which could include road tolls.
Jin also outlined other benefits.
“For the major countries in this world, participation and membership in an international institution is very important because you can contribute to the governance, to the standards and to take care of the global issues or regional issues,” he said.
“That, in my view, is the responsibility of the big countries in this world.”
Following his meeting with Jin, Morneau’s office released a statement saying that engaging in multilateral development efforts would help boost growth in Asia and beyond, with significant commercial benefits for Canada.
Canada was accepted as a member about a year ago.
Political opponents criticized the Liberals for committing a large sum of taxpayer cash to join the bank, particularly when the federal government is still running budgetary deficits.
“Much of what they are doing does not benefit Canadians,” Conservative Leader Andrew Scheer told the House of Commons in February, the day after Morneau tabled his budget.
“Some $500 million will be taken from hard-working Canadians and spent in an Asian infrastructure bank to build projects in other countries. Nobody living in a Canadian city wants to see their tax dollars go to build projects around the world. They want those dollars to be spent making their lives better.”
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Andy Blatchford, The Canadian Press