Infrastructure bank belongs in Toronto.

The good news is that Canada’s new infrastructure bank will be in operation by the end of this year. Despite the complaints of other centres, Toronto is the city where it belongs. The bank will be launched with $35 billion in capital from the federal government and will seek Canadian and foreign investors looking for productive investments in Canadian infrastructure needs.

And that makes a great deal of economic sense. Any objections to it being in Toronto are nothing but sour grapes. And any objections some have to where the government is getting advice are way off base.

It was no surprise that the Chamber of Commerce in Montreal was disappointed the bank was not located there. If the bank was set up to just fund infrastructure projects in Quebec, that would make a lot of sense but since the project covers the entire country, Toronto is the truly international financial centre for it.

And for the Conservative opposition in Ottawa to complain about the influence the world’s largest investment management firm telling the government what is needed is silly. If you want to attract investment capital, who would you want to talk to, a tiddly-winks manufacturer or an organization that already does large capital investment.

An infrastructure bank such as is proposed has to have people who can talk to investors in all parts of the world. It has to attract some of their capital to Canada where it can help meet infrastructure needs. It has to create the kind of revenue streams that will interest these investors. If you are going to invest in electrifying the commuter trains in southern Ontario, you want to be sure that your money will produce a reliable return.

The good news is that people do want to invest in Canada. It is no surprise that a Spanish consortium bought Ontario’s Highway 407, an electronic toll road that constantly earns money for their investors. Drivers have a choice, they can pay the toll and drive relatively quickly across the top of Toronto. They can refuse to pay the toll and sit in grid lock.

Commuter trains, subways, light rail tramways, bus tramways and streetcars all deal in funds for use. We can wait for your taxes to pay for these services or we can have them sooner with the aid of a properly functioning infrastructure bank. What is your choice.

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Copyright 2017 © Peter Lowry

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