The federal Liberals have selected Toronto as the home of the new Canada Infrastructure Bank, aiming to place the new entity in the heart of Canada's financial sector.
The fact that Toronto is home to the infrastructure practices of all of the major Canadian banks and is also where the majority of Canada's public-private partnership firms are located were among the reasons cited by the government.
"The role of the Bank is to build more infrastructure, and when you look at the institutional investors, when you look at some of the private sector investors and the infrastructure investments they make, they have expertise related to infrastructure financing available in Toronto," Infrastructure Minister Amarjeet Sohi said.
Montreal and Calgary had lobbied hard for consideration, and the Montreal Chamber of Commerce said on Monday that it was extremely disappointed with the decision.
The bank is a new concept that would aim to leverage $35-billion in federal cash and loans in order to finance large projects as a minority partner with private investors in areas such as public-transit expansion, energy-grid improvements and trade infrastructure.
Opposition MPs accused the government of acting prematurely in announcing the bank's location, given that legislation to create the bank has not yet been approved by Parliament. The legislation is included as part of Bill C-44, the government's omnibus budget bill.
Prime Minister Justin Trudeau also faced questions on Monday over the degree of access his government has granted institutional investors over the past year as it developed its plans for the bank.
For a second sitting day in a row, the Conservatives and NDP asked several questions about details published last week by The Globe and Mail outlining the roles played by BlackRock, the world's largest asset manager, and other investors as cabinet ministers and senior officials worked to develop and promote the Canada Infrastructure Bank.
"The Prime Minister has turned to BlackRock for all kinds of advice setting up this bank. That is like the three little pigs hiring the big bad wolf to be their contractor," Conservative interim Leader Rona Ambrose said. "Everyone can see the conflict of interest here. It is obvious, and thanks to the Prime Minister, the rich just keep getting richer. Who is going to stick up for the taxpayer?"
Mr. Trudeau said his government is planning to draw on different sources of capital in order to get more things built that will help Canadians and the broader economy.
"We believe in collaboration. We believe in working with people," Mr. Trudeau said.
Government documents show officials from BlackRock were part of a high-level federal working group that prepared for a Nov. 14 closed-door meeting organized by BlackRock at Toronto's Shangri-La Hotel. At the event, Mr. Trudeau and his cabinet promoted their plans for the bank to BlackRock's international clients, who collectively control funds worth trillions of dollars. The documents showed BlackRock officials reviewed and commented in advance on a presentation that Mr. Sohi, the Infrastructure Minister, made to BlackRock's clients.
Addressing the issue for the first time, Mr. Sohi said he and his government spoke with a wide range of people about the bank and that his presentation was ultimately made public.
"Our consultation was very, very wide and did not focus just on a single sector," he said.
A spokesperson for BlackRock told The Globe in an e-mailed statement that the company's role in preparing for the Nov. 14 meeting involved logistical planning, helping the government establish more relationships with global investors and "providing directional feedback" on Canada's long-term investment opportunities.
"Any investments in Canada that may ultimately result from the summit's discussions would likely be made directly by an investor and wouldn't necessarily include BlackRock or a BlackRock advised fund," the spokesperson said.
Ottawa has launched a search to fill the bank's executive positions and is hoping to have it up and running before the end of the year.
Michel Leblanc, president of the Chamber of Commerce of Metropolitan Montreal, said he believes the decision to locate the bank in Toronto is partly because of the fact that Finance Minister Bill Morneau is from a Toronto riding. He said he would have liked to have seen more support from Quebec's federal Liberal ministers in favour of Montreal's campaign to host the bank.
"Over the last month, I did not see the expression of that leadership," he said.
Calgary Mayor Naheed Nenshi called it a "shame" that his city lost out. He told reporters that by choosing to establish the bank in Toronto, Ottawa missed an opportunity to make a symbolic point that it would be new and innovative.