OTTAWA - Federal investments doled out through the government's new infrastructure financing agency may be used to ensure a financial return to private investors if a project fails to generate enough revenues, documents show.
The revenues attached to projects financed through the soon-to-be-created infrastructure bank are key to the government's plan to leverage private capital to pay for public roads, bridges and transit systems.
What investors have recently been told -- and what the finance minister was told late last year -- is that if revenues fall short of estimates, federal investments through the bank would instead act as a revenue floor to help make a project commercially viable.
That would be the case when the bank takes a subordinated equity position, where the government buys ownership shares in a project, and would only be reimbursed after those higher up the equity ladder receive their repayments.
Experts say the wording in the documents suggests taxpayers will be asked to take on a bigger slice of the financial risk in a project to help private investors, a charge the government rejects.
A spokesman for Infrastructure Minister Amarjeet Sohi said the infrastructure bank would only be liable for its own stake in a project and the possibility of lower-than-expected revenues would be part of the risk private investors assume in financing a project.