Transport Committee on June 8th, 2023

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

Mr. Sabia also mentioned in his testimony that it was you who recruited him to head up the Canada Infrastructure Bank.

Is that correct?

[Bill Morneau]

In the time period when we asked Mr. Sabia to be the chair of the Canada Infrastructure Bank, I believe I would have been the one who spoke to him about that possibility. I can't recall the exact conversation, but I imagine that would have been one we had.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I asked you the question because it surprised me a little at the time.

If I understand correctly, you met with him and brought him on board as a member of the Advisory Council on Economic Growth. After that, you must have told him that he had good expertise and that you very much appreciated his work on the council. I imagine you also told Mr. Sabia that it would be interesting to get him involved with the Canada Infrastructure Bank, since he was no longer head of the Caisse de dépôt et placement du Québec. Obviously, these are just assumptions based on what you said.

However, what bothered me is that the Canada Infrastructure Bank comes under Infrastructure Canada, not the Department of Finance. Why is it that the Minister of Finance was recruiting for the Canada Infrastructure Bank?

[Bill Morneau]

I believe that, from the very beginning of the discussions around the Canada Infrastructure Bank, there was a joint responsibility between the infrastructure department and the finance department. There was certainly, in most periods during that time, a lead taken by the minister of infrastructure. That was the way the responsibilities were handled. At all times during the period in which I was in office, there was a joint set of responsibilities for that institution.

I would have been the person who had experience with Mr. Sabia, knowing his business reputation from before my time in office and having had exposure working with him at the advisory council. I would have likely had that conversation because of that background.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

A little earlier, you said that the Canada Infrastructure Bank acts independently from the government. That's also what Ms. McKenna, the former minister of Infrastructure and Communities, said. However, Mr. Sabia seems to have been very popular within your government. He was served on the Advisory Council on Economic Growth, obtained a position within the Canada Infrastructure Bank, and was appointed deputy minister of Finance a few months later.

Are you sure that the Canada Infrastructure Bank acted completely independently from the government? What explains Mr. Sabia's popularity within your government?

[Bill Morneau]

Perhaps I can step back to properly answer that question.

We looked at the Canada Infrastructure Bank as being independent from government as a key feature of the bank. We saw that it was important, given the mandate to be able to invest in infrastructure, that it be separate from government in order to develop the kinds of projects that would be required. It would need to work together with different levels of government, and having a level of independence would have been critically important. That was our decision from the very beginning.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Why is Mr. Sabia so popular with your party?

[Bill Morneau]

The decision around putting Mr. Sabia on as one of the members of the advisory council was consistent with our broader view. We wanted to seek people with different levels of expertise. We sought people with climate expertise, people with significant international business expertise, indigenous expertise....

Mr. Sabia brought with him an understanding of infrastructure investment. He brought with him an understanding of the federal government. He brought with him an understanding of a large Canadian corporation. He had multiple areas of expertise that I sought out as being particularly helpful in the advisory council and subsequently, of course—

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Do you think it's normal for a minister to personally take steps to find the person who will be the president of a crown corporation? Generally, when there's a vacancy, people can apply for the position, or headhunters are used.

How is it that it was the Minister of Finance who did this work?

[The Chair, Liberal, Peter Schiefke]

I'd ask you to answer the question in 15 seconds, please.

[Bill Morneau]

Thank you.

I do believe there is an important and robust process in place for seeking the leaders of institutions. For all the leadership roles, that would have been the way it was done. However, there's also an element of trying to convince people that they should be part of this, and that was something I leaned into in the case of the chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Morneau.

Thank you very much, Mr. Barsalou‑Duval.

Next we have Mr. Bachrach for six minutes, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Thank you, Mr. Morneau, for being with us today.

Mr. Morneau, is it fair to say that the goal of the advisory council that you established was to advise the government on the design and structure and strategy behind the Canada Infrastructure Bank?

[Bill Morneau]

No. We were looking to the advisory council for advice and ideas on long-term economic policies that could advantage Canada. It was intended to be a group that could bring an outside perspective and work together with us to develop those ideas. Then, of course, we would have the opportunity to consider its advice, or not, as we moved forward with our public policy decisions.

It was really very much that: How do we develop long-term economic policies that will raise our prospects for prosperity for Canadians.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Morneau, was part of the advisory council's advice to government that it should establish a stand-alone, arm's length, bank-type organization that would facilitate private investment in infrastructure projects? Is that something it recommended?

[Bill Morneau]

The platform that we came in on in 2015 had already identified the Canada Infrastructure Bank framework as something we thought would have a positive economic impact on the country. One of the things the advisory council did was look at that platform commitment and consider how best we might be able to activate that. That was information we took as we thought about how we could move forward on that platform commitment. It ended up with the Canada Infrastructure Bank as you see it.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

The advisory council provided advice to government on how best to activate the platform that the government had already decided was going to be a good platform to further the infrastructure goals.

[Bill Morneau]

Stepping back, I think what we talked about in 2015 was how important it was to not only continue but increase our investments in infrastructure. We saw multiple ways to do that.

One way we wanted to do that was by setting up a structure that would allow us to bring outside investment into Canadian infrastructure. We saw Canadian pension—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I understand, Mr. Morneau. You're going back to the original point, but I wanted to confirm that the bank actually....

What you said earlier was that the advisory council provided the government with advice on how to activate the platform—the platform being the Canada Infrastructure Bank. That's what you said.

I'd like to move on to another theme. On May 16, 2016, you were at a meeting at Meech Lake with the new advisory council. This is a meeting I assume Mr. Sabia and the other advisory council members would have been at. I'm looking at an article here from 2017 that focuses on the concept of conflict of interest. What it outlines is that the members of the advisory council were asked, I assume prior to that first meeting at Meech Lake, to sign a document in which they pledged to act only in the public interest. The document stated:

While recognizing the likelihood that a member of the [council], a company or institution that the member is associated with may benefit from the decisions made by the government based on advice from the [council] and that members may be associated with companies that do business with the government, members are reminded that they should avoid any real, apparent or perceived conflict of interest

Mr. Morneau, could you give me an example of what an apparent or perceived conflict of interest could be in this context? What was envisioned by that document? What kind of situation was envisioned?

[Bill Morneau]

I'm pleased to hear that process was followed. I can tell you I would not have been involved in the process around ensuring that all advisory council members were clear that they needed to avoid conflicts of interest, but I would have known that they needed to make that commitment.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

The question, Mr. Morneau, was if you could give me an example of what an apparent or perceived conflict of interest in this context would be.

[Bill Morneau]

Again, I wasn't involved in setting up those conflict of interest declarations, nor did I—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Morneau, do you know what a conflict of interest is, either apparent or perceived? Are you familiar with the concept? I'm sure you've signed these documents yourself before.

[Bill Morneau]

I, again, didn't have any involvement with that particular document, so I can't really make a comment on something I haven't seen, but of course—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

It wasn't a question about the document. It was a question about the concept, Mr. Morneau.

There's a legal concept of apparent and perceived conflict of interest. Are you familiar with the concept?