Update on the Spending Outlook of the Canada Infrastructure Bank
The PBO estimates that the Canada Infrastructure Bank (CIB) will disburse $14.9 billion by 2027-28, compared to its target of $35 billion by that year. By 2029-30, the CIB will disburse $20.7 billion. However, the CIB has already met its target of $1 billion for Indigenous investments.
Summary
The Canada Infrastructure Bank (CIB) was established in 2017. Its purpose is to co-invest in infrastructure projects that would not have been financially feasible for public and/or private sector investors to proceed with alone.
The CIB invests in 5 priority sectors, each with their own funding target. These sectors are (target in brackets):
- Public Transit ($5 billion);
- Green Infrastructure ($10 billion);
- Trade & Transportation ($5 billion);
- Broadband ($3 billion); and
- Clean Power ($10 billion).
Across these projects, the CIB has a goal of investing $1 billion in Indigenous projects.
As well, the CIB has a target of $500 million for Project Acceleration, which is meant to help potential projects get to a point where the CIB may make a full investment.
In 2021, the PBO published a report on the progress of the CIB’s disbursement of investment funding. The report found that the pace of disbursement was too slow to be on track to meet the goal of $35 billion by 2027-28.
The current report projects that the CIB will disburse $14.9 billion by 2027-28. This will still fall short of the target and is slightly lower than the projected disbursements in the previous report. By 2029-30, the CIB is projected to disburse $20.7 billion.
However, the CIB has already met its disbursement target for Indigenous investments. By 2027-28 and 2029-30, it is projected to invest $3.1 billion and $5.4 billion respectively in Indigenous projects.
This report also briefly comments on the split of public and private sector partners that co-invest with the CIB.
Background
The Canada Infrastructure Bank (CIB) was established in 2017. Its purpose is to co-invest in infrastructure projects that would not have been financially feasible for public and/or private sector investors to proceed with alone.[^1]
In 2021, the PBO published a report on the progress of the CIB’s disbursement of funding. The report found that the pace of disbursement was too slow to be on track to meet the goal of $35 billion by 2027-28.[^2] The PBO estimated that the CIB would miss its target by $19 billion.
Four years have passed since the 2021 PBO report. In that time, the CIB has made further investments. The additional years of data now allow the PBO to create projections for the progress by sector.
The CIB invests in 5 priority sectors, each with their own funding target. Some of these targets have changed since the beginning of the CIB. These will be discussed in the results section. Table 1 shows the current targets.
Included in the funding for the five sectors is a target of $1 billion for investments in Indigenous projects.
In addition, the CIB’s Project Acceleration program has a target of $500 million. Project Acceleration funding is meant to help potential projects get to a point where the CIB may make a full investment.[^4]
Data
The PBO obtained data from the CIB through Information Requests IR0809 and IR0819.[^5][^6] The CIB provided confidential data about projects that have achieved financial close (FC) and Project Acceleration funding commitments, as well as expected disbursements for both types of projects.[^7] As well, data was provided about projects in other stages of consideration.
Information from annual reports, corporate plans, and quarterly updates was also used, as well as other data about CIB projects from public sources.
Methodology
Given that the timing of FC’s and disbursements can be unpredictable, especially among larger projects, the PBO’s projections reflect what is expected to happen on average over several years, as opposed to being accurate in any given year. The CIB’s own projections are performed in a similar way.
To estimate the disbursements that will eventually stem from projects currently under consideration, the PBO calculated the following from historical CIB data for each of the five sectors:
- The average growth rate of projects in the initial stage of consideration from 2022-23 to 2024-25;
- The percent of projects that will be removed from consideration before achieving FC in each stage of consideration;
- Of the projects that are not removed, the percentage of projects in each of the 3 stages that will move on to the next stage or to FC within 12 months;
- The distribution of the number of years between a project reaching FC and its first disbursement;
- The distribution of how much funding will be disbursed during each year of disbursement; and
- The average CIB investment in each of the five sectors since 2021-22.
As well, the PBO projected Project Acceleration disbursements by taking into account how, in most cases, projects only use a percentage of Project Acceleration funding.
Further, to project Indigenous investments, the PBO calculated the historical proportion of each sector’s CIB funding that has gone to Indigenous projects. The PBO combined these proportions and each sector’s overall projections to create projections for Indigenous investments.
These projections assume that the CIB will not change its behaviour in the future.
Results
Disbursements
The CIB is expected to disburse $14,902 million by 2027-28 and $20,675 by 2029-30.
The CIB is not expected to reach its disbursement goals in any sector by 2027-28.
The PBO’s 2021 report projected that by 2027-28, the CIB would have disbursed $15,937 million. The current report projects similar, although slightly lower, cumulative disbursements of $14,902 million. This is $1,035 million, or 6%, less than the 2021 report projection.
However, the public transit sector is projected to meet its target by 2029-30. As well, the broadband sector will only be 9% lower than its $3 billion goal by 2029-30. The Indigenous disbursement target was already surpassed by the end of 2024-25.
Further, Project Acceleration has a very low level of disbursements so far. However, this is partially due to the way Project Acceleration funding is classified. If a project receives Project Acceleration funding and later achieves FC, the Project Acceleration funding that was disbursed becomes part of the investment funding instead. Therefore, the more projects that receive Project Acceleration funding and later achieve FC, the lower the amount of funds that will be ultimately classified as Project Acceleration funding. By the end of 2024-25, 18% of Project Acceleration projects have ultimately achieved FC.
In some cases, the CIB initially had different sector targets. These include:
- Green Infrastructure: Current target is $10 billion, original target was $5 billion;[^10]
- Broadband: Current target is $3 billion, original target was $1 billion;[^11]
- Clean Power: Current target is $10 billion, original target was $5 billion.[^12]
These initial targets and their comparison to the PBO projections are in Table 4.
If the original sector targets were still in place, the broadband target would have been achieved in 2025-26, while the clean power target would have been achieved in 2028-29.
As well, the CIB surpassed its $1 billion Indigenous funding target in 2024-25. By 2027-28, it is expected to have achieved $3.1 billion in disbursements, and $5.4 billion in disbursements by 2029-30.
The PBO’s disbursement projections are similar but slightly lower than the CIB’s most recent corporate plan.[^13] See Appendix A for a comparison with more details.
Public and Private funding
Public and private partners co-invest with the CIB to bring projects to fruition.
The PBO considered certain partners to be public that the CIB considered to be private, and vice versa. However, the differences did not substantially impact the results of this report. The PBO defined what was public and private based on Statistics Canada’s Public Sector Universe (PSU) and its associated documentation.
Since the CIB was established, two-thirds of partner funding has come from public-sector partners. However, in more recent years, the amount from private partners have been almost equal, reaching 48% of total partner funds. Private sector funding consistently originates in equal parts from publicly traded companies and other private sector entities.
CIB data and PBO calculations.
CIB data and PBO calculations.
Totals may not add due to rounding.
CIB data and PBO calculations.
CIB data and PBO calculations.
Totals may not add due to rounding.
CIB data and PBO calculations.
CIB data and PBO calculations.
Totals may not add due to rounding.
Further, since the start of the CIB, more than three quarters of public sector funding has come from the provincial level. The rest of the public sector funding has been provided almost equally between the federal and municipal levels of government.
CIB data and PBO calculations.
CIB data and PBO calculations.
Totals may not add due to rounding.
Sources of uncertainty
The PBO assumed that the CIB will continue to prioritize the same sectors and move projects along the various phases at the same pace as in the last couple of years. The CIB could, however, decide to focus on sectors that are at risk of not reaching their targets. However, it is unclear how this would increase the overall performance of the CIB, given that the overall target of $35 billion is higher than the combined sector and Project Acceleration targets. In order to reach the overall target of $35 billion, the CIB would need to exceed at least some of its sector targets.
The size of projects and the rate at which they progress through the CIB’s consideration process could vary over time, which would affect the rate of financial closes and disbursements.
As well, the willingness of partners to invest with the CIB can be affected by broader economic conditions, including geo-political events. This could affect the amount of CIB investments.
Appendix A: Disbursements and Financial Closes
The CIB's corporate plan for 2024-25 to 2028-29 projects $3 billion in FC’s in each of those years. The corporate plan also projects that additional FC’s of at least $10 billion will occur during those years or in later years. This $10 billion is expected to come from large projects, which typically have longer and less predictable timelines than other projects. The corporate plan also assumes that on average, $3.5 billion in FC’s will be achieved annually.
To provide a meaningful comparison between the corporate plan and PBO projections, Table 3 presents the corporate plan data under 3 scenarios:
- Lower bound: only $3 billion per year in FC’s;
- Upper bound: $3 billion per year in FC’s, with an additional $10 million spread equally across five years, for a total of $5 million per year; and
- Middle bound: $3.5 billion per year in FC’s.
The CIB 2024-25 to 2028-29 corporate plan does not extend to 2029-30. The PBO has assumed that the amounts for 2029-30 will be the same as the CIB’s projected amounts for 2028-29.
The PBO’s projected total by 2027-28 is similar to the CIB’s upper bound scenario, while the total by 2029-30 is in between the CIB’s middle and upper bound scenarios.
Based on its methodology, the PBO is expecting $350 million, or 2%, less in disbursements to be made by 2027-28 than the CIB’s corporate plan projects. By 2029-30, the PBO’s estimate is $1,170 million, or 8%, less than the CIB’s.