Failed Climate Project Cost Federal Infrastructure Bank $900K in Consultants’ Fees

Federal Infrastructure Bank Spends $900K on Consultants’ Fees for Unsuccessful Climate Project

January 8, 2024 TruthUSA

The Canada Infrastructure Bank (CIB) incurred a loss of approximately $900,000 on the Lake Erie Connector project, an initiative aimed at constructing a 117-kilometre underwater electricity transmission line of “clean, non-emitting power” from Ontario to Pennsylvania.

The failed project, which was intended to export electricity from Ontario to a significant power market, never commenced construction and was subsequently abandoned in 2022. The incurred costs were attributed to legal, financial, and power transmission consultancy fees, according to Blacklock’s Reporter.

CIB tabled the information in the House of Commons in an Inquiry of Ministry dated Dec. 11, in response to a question from Conservative MP Leslyn Lewis.

“What are the total expenditures by the CIB on projects that were not completed, indefinitely delayed or otherwise abandoned?” asked Ms. Lewis, her party’s infrastructure critic.

The Bank’s response broke down the nearly $900,000 in expenditures on the failed project, the largest being an approximately $555,000 lump cost for, “Legal advice related to Canadian law for project structuring, due diligence, environmental and regulatory law, and drafting legal documentation for the Project.”

Initially, the Bank had committed up to $655 million, nearly 40 percent of the total cost, to the project in 2021, marking its inaugural venture into transmission projects.

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The commitment was part of a broader $10 billion growth plan aimed at fostering green investments.

“This is the Bank’s first investment commitment in a transmission project,” the Crown Bank said at the time.

The Bank’s management wrote in 2021 that the project was “yet another” example of how it will “quickly implement its $10 billion growth plan” and will allow Ontario to “export clean, non-emitting power to one of the largest power markets in the world.”

However, the project’s abandonment led to significant financial losses and questions about the Bank’s operational efficiency and project management.

“The Lake Erie Connector Project is yet another failure for the Canada Infrastructure Bank – a $35 billion taxpayer-funded bank that has not completed one project in almost 6 years,” Ms. Lewis said in a statement released Nov. 30, 2022.

The Canada Infrastructure Bank, established in 2017 with $35 billion in financing from taxpayers, is mandated to leverage private sector investments for public infrastructure projects.

The Commons transport committee recommended disbanding the institution in May 2022, based on a study conducted in the previous Parliament.

“CEOs at the Bank have all made amazing claims that the $35 billion the Infrastructure Bank has, taxpayers’ money, would be able to unlock two times, four times, even seven times the investment from the private sector,” Conservative MP Andrew Scheer had told a 2021 transport committee hearing.

Despite the recommendation and criticism from various MPs regarding the Bank’s inefficiency and unfulfilled claims of leveraging taxpayer money, then-Infrastructure Minister Dominic LeBlanc in 2022 dismissed the committee’s recommendation, asserting the Bank’s ongoing progress in aligning with government priorities.

CIB has invested $10.1 billion, as of Sept. 30, into projects across Canada totalling $28.9 billion in value, including $52 million in Manitoba’s Thompson Regional Airport, $210 million in the Parkland Electric Vehicle Charging Network, and up to $535 million into Ontario’s Oneida Energy Storage.

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