Canada Infrastructure Bank taps CPPIB exec as CEO

Canada Infrastructure Bank has named former Canada Pension Plan Investment Board executive Pierre Lavallée as its first CEO.

Lavallée most recently was senior managing director and global head of investment partnerships at the CPPIB, where he led a team managing $94 billion of assets. He previously worked as executive vice-president of Reitmans and was a partner at Bain & Co. He will take over the top role at the bank on June 18.

“I am excited to build a team and start working with the board, private and institutional investors and public-sector proponents on innovative transactions to develop new infrastructure projects for Canadians,” Lavallée said in a release.

Read: Feds name new infrastructure bank board

Canada Infrastructure Bank had already named Annie Ropar to the position of chief financial officer and chief administrative officer, starting June 1.

The $35-billion Canada Infrastructure Bank is a key component of the Liberal government’s long-term economic growth strategy with a mandate to use public funds to attract private capital to build revenue-generating public infrastructure projects such as pipelines, electricity grids and transit.

Lavallée told The Canadian Press there is no deadline for making the first investment, but a lot has to happen before then.

“This is a startup, a very well-funded startup, but nonetheless a startup operation,” he said. “So we need to hire people, we need to put in place the right investment decision-making processes, we need to identify the projects and we need to line up financial partners. All of that will take some time […] nine to 18 months perhaps.”

Lavallée said he has no comment on any particular project options, including the Kinder Morgan Trans Mountain pipeline.

However, the timeline of up to a year and a half before the bank is ready to make its first investment announcement suggests the government won’t be able to turn to the bank to save the pipeline project if Kinder Morgan chooses not to go forward next week.

The company has set May 31 as a deadline to make a decision on whether to move on with construction of the $7.4-billion pipeline that will twin an existing line to bring three times as much oil to Kinder Morgan’s marine terminal in Burnaby, B.C., from Edmonton. The company has investment jitters because of a court challenge from the B.C. government over whether the province can regulate what flows through the pipeline.

Finance Minister Bill Morneau said last week the federal government is willing to cover cost overruns caused by political uncertainty, but also said if Kinder Morgan pulls out there are other investors eager to step in. He has not said who they may be, but many have publicly wondered if the infrastructure bank is an option.

The bank has been criticized by political rivals who argue it will boost corporate profits by forcing Canadians to pay twice for these projects—first through the treasury and then through user fees, such as tolls.

Some opponents have warned the bank will put the priorities of wealthy investors ahead of ordinary Canadians, whom they say will be stuck carrying too much of the risk.

Also read:

CPPIB reports 11.6% return, adds $39.4B in fiscal 2017

Global public assets rise by $2.5T in 2017