Canada: Selected Issues and Analytical Notes

International Monetary Fund

No 2017/211, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper describes the proposed Canada Infrastructure Bank (CIB) that will be allocated Can$35 billion over an 11-year period. It will add to, and not replace, existing methods of financing public infrastructure at all levels of government, including the Federal Government’s Can$187 billion Investing in Canada plan covering 12 years. The CIB will be a wholly government-owned Crown corporation, subject to provisions of the Financial Administration Act (FAA), including the requirement to prepare a corporate plan, operating budget, and capital budget, for approval by the Government. The CIB and its investments will be on the federal government’s balance sheet. However, the infrastructure-related special purpose vehicles (SPVs) in which the CIB invests will not be on the government’s balance sheet. Attracting private capital requires offering a rate of return acceptable to the investor. Worldwide, there are trillions of dollars looking for safe returns over the long-term. The risk-adjusted rate of return sufficient to attract an investor is not known with precision ex-ante. Investors will seek the highest rate of return possible above its minimum threshold.

Keywords: ISCR; CR; credit growth; stamp duty; infrastructure assets; mortgage credit growth; infrastructure investment; CIB investment; LTV ratio; house price growth; Infrastructure; Mortgages; Housing prices; Transaction tax; Macroprudential policy instruments; Global; Australia and New Zealand (search for similar items in EconPapers)
Pages: 62
Date: 2017-07-13
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