How to Fix the Canada Infrastructure Bank

by | Feb 19, 2020 | Economics

Andrew Willis (“Ottawa needs to reboot infrastructure bank, or shut it down” – Globe & Mail Feb. 17 2020) suggests three alternatives for the Canada Infrastructure Bank: fund projects with user fees; change the management; or, close it. I’d like to suggest another: implement a transparent, standardized method of choosing infrastructure projects, open up the funding to competition and give us projects that improve our quality of life and our environment.

The Canada Infrastructure Bank should tell project proponents to use Triple Bottom Line Cost Benefit Analysis (TBL-CBA), give them a standardized methodology and the parameters to use (including a scientifically derived social cost of carbon) and prioritize projects based on quality of life not user fees. We don’t have to pay fees to value something.

Standardizing the rules of the competition allows projects of different size and type to be compared. Cost Benefit Analysis (CBA) has been used for over a century to decide what, where, and how to build, or deliver a program. The valuation concepts behind CBA go back even further to Cromwell’s England to decide how much agricultural land was worth. Around eighty years ago, to stop unfair competition amongst competing infrastructure projects, CBA was standardized by the US Army Corps of Engineers for flood control projects. CBA has been further standardized and has been endorsed by governments worldwide and by five US presidents of different political stripes.

The Canada Infrastructure Bank should give us projects for the people and the planet as well as profit by using an objective, transparent, decision making tool.

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