OTTAWA, Nov 1 (Reuters) - The Canadian government will set up an infrastructure bank and give it access to C$35 billion ($26.1 billion) to help fund major projects that might otherwise not get built, Finance Minister Bill Morneau said on Tuesday.
Morneau told the House of Commons that the proposed bank - which Ottawa hopes will be up and running next year - would attract as much as C$4 to C$5 in private capital for every tax dollar invested.
The Liberals of Prime Minister Justin Trudeau had promised to set up an infrastructure bank in the run-up to the election of October 2015, which they won.
Morneau, presenting a fiscal update, told legislators that the money would “flow to help us undertake transformational projects that might not otherwise get built.”
The bank - working with institutional investors as well as public and private pension funds - would conclude and execute complex infrastructure deals using loans, loan guarantees and equity investments, the finance ministry said in document.
Of the initial C$35 billion, C$15 billion would come from already announced federal investments in sectors such as public transit and green infrastructure. An additional C$20 billion will be available for investments that would result in the bank holding assets in the form of equity or debt.
“Canada, a country with low political risk, is a very desirable place for international pension funds who’d like to make investments in infrastructure,” Morneau told reporters.
The bank - which Morneau said would be at arm’s length from the federal government - will work with Canada’s 10 provinces, three northern territories and municipalities across the country.
$1=$1.34 Canadian Reporting by David Ljunggren; Editing by Lisa Shumaker