Flaherty: ‘huge opportunity’ in oil and gas

In an exclusive interview with Infrastructure Investor in Ottawa’s Parliament building, Canada’s Minister of Finance Jim Flaherty detailed his country’s infrastructure priorities and said the main focus would be on projects that can help drive economic growth. 

“Primarily we will be focused on economic infrastructure and jobs from now on,” he said. “There has been a lot of demand for ice hockey rinks,” he added with a smile, “but the focus should be on long-term economic growth. It was the original intention anyway but when there’s a surplus, you can do recreational projects. But not so much in the times we’re now in.”

In particular, he feels better infrastructure could help to more fully exploit the rich resources in the west of the country. “We have huge infrastructure challenges and economic opportunities,” said Flaherty. “We need pipelines to run from the resource-rich West to the East of Canada and to the US. So there are huge opportunities in oil and gas. There are hydro-electric projects in Quebec, Newfoundland, Labrador and Manitoba and they all need infrastructure to generate electricity and move it.”

He continued: “We have strong commodities demand and a need for more infrastructure to move commodities to the West Coast due to the trade with Asia.”

He also highlighted areas such as highways and rail as needing attention, given the demands of Canada’s largely urban population. And he pointed to the proposed public-private partnership (PPP) for Montreal’s C$5 billion (€3.8 billion; $5 billion) Champlain Bridge replacement as a prime example of the move to develop infrastructure “directly relevant” to economic growth.

In a wide-ranging interview, Flaherty said he was keen to attract more participation from the large Canadian pensions in Canadian infrastructure but admitted they were concerned by regulatory issues that the government needed to address:

“One thing I want to do is go to the pensions and solicit their involvement,” he said. “We have solid fiscal fundamentals in Canada so we are seen as a stable partner. I think some pensions will get substantially involved but it depends on how good we can be on the regulatory side. We have to do our job on the government side and not impede progress. For example we need environmental processes, but we don’t need them to cause delays.”

Other subjects discussed during the course of the interview included the possible effects on Canada of the Eurozone crisis, his battle to establish a firm foothold for PPPs, and how he was inspired by a visit to the UK in 2001 to see how the new Labour government was implementing that country’s Private Finance Initiative.

For the full version of the interview, please click here.