The Canada Infrastructure Bank has asked the federal government for millions of dollars in operational expenses over the past year — even though it has announced only one project so far.

According to Finance Canada documents obtained through the Access to Information Act, in March 2018 the bank requested a draw-down from the federal Consolidated Revenue Fund of $5,756,000 to cover operational expenses until the end of June. That followed an earlier request in August 2017 for $5,610,000 to cover initial expenses.

The two requests amount to $11,366,000 to pay for salaries and compensation, administration, legal services, travel, communications, IT and other professional services. In August 2017, the bank also asked Ottawa for $1,381,000 to cover capital expenses; according to the documents, the bank is not requesting any more funds for capital expenditures at this time.

We may find out at some point that this turns out to be an absolute boondoggle. - Randall Bartlett, economist, University of Ottawa

Infrastructure Bank CEO Pierre Lavallée said the bank will follow the highest standards of due diligence in managing its expenses.

"The big money here really is in the investments that we're making. Not to say the operating expenses don't matter. They do, and we will manage those as aggressively as taxpayers would expect," Lavallée said.

"That said, building an organization whose mandate is to deploy $35 billion and to do it responsibly means we have to hire credible people with relevant experience and expertise."

Slow train coming

It's all getting off to a slow start, though. The only project the Canada Infrastructure Bank has announced so far — a $6 billion electric rail system in Montreal — was in the works long before the bank itself came along.

Critics say that, considering the speed at which the bank seems to be moving, it's difficult to work out if the millions of dollars being spent are worth it.

"Compared to the pace at which the government anticipated it would have the bank set up, have a CEO hired and have projects rolling out the door, the Canada Infrastructure Bank is well behind the anticipated pace," said Randall Bartlett, chief economist for the Institute of Fiscal Studies and Democracy at the University of Ottawa.

The infrastructure bank was a key plank in the Liberals' 2015 election platform. Once in power, the Liberal government announced it would actually happen as part of the 2016 fall fiscal update.

Legislation to make it happen was passed in June 2017. Janice Fukakusa, the former chief financial officer of the Royal Bank of Canada, was made chair of the bank's board a month later. But the bank didn't get a CEO and president until this past May, when Lavallée was named.

In August, the bank announced it would provide a $1.28 billion loan to help build a $6.3 billion electric rail system in Montreal — the Réseau express métropolitain, or REM.

That announcement came just three months after Lavallée had said it could be up to 18 months before the bank would be ready to go forward with any project. That, and the fact that the Liberal government had been touting the REM as the perfect Canada Infrastructure Bank project before the bank even existed, has critics musing about possible political pressure on the arms-length agency.

But they need to have a national interest lens in how they are investing because we created the bank to make a difference in Canada. - Minister for Infrastructure and Communities François-Philippe Champagne

"I don't think there are many coincidences in terms of political timing," said Bartlett. "This will demonstrate the Canada Infrastructure Bank is doing something. And it's early enough that the government can brag about it in the fall economic statement."

Speaking to CBC News, Minister for Infrastructure and Communities François-Philippe Champagne sidestepped a question about political pressure. He said the goal of the bank is to show Canadians that the money it's lending frees up direct government investment for other infrastructure projects that the private sector would not be interested in, such as community centres and shelters.

"This is about doing more. I think Canadians should be happy that that money that is done by the bank as co-investors is freeing up capital so we can invest more in other places in Canada," he said Champagne.

Low rate of return

But the slow progress on getting the Canada Infrastructure Bank up and running has diminished the clout of that freed-up federal borrowing room. Interest rates have risen in the period since the bank was announced, meaning the federal government must pay more to borrow funds to build the projects the bank doesn't cover.

Critics also have lamented the low rate of return for the bank under the REM deal. The bank's investment is a 15-year secured loan at a rate starting at 1 per cent, escalating to 3 per cent over the 15 year duration.

Meanwhile, institutional investor CDPQ Infra's 70 per cent equity stake in the REM will see an 8 to 9 per cent return, while the Government of Québec's 30 per cent stake will see a 3.7 return.

"That's a commercial decision for the bank. They operate on an arms-length basis," said Champagne. "But they need to have a national interest lens in how they are investing because we created the bank to make a difference in Canada. My challenge to the board is think big and think smart."

Asked whether the bank plans to publish a list and timeline for prospective future projects, CEO Lavallée said it's almost impossible at this point to predict when an investment might come together.

"A series of conditions have to align for an investment to actually take place," he said. "What we are trying to identify as investments ... are projects where our participation allows a project to come to life."

Bartlett isn't optimistic.

"We may find out at some point that this turns out to be an absolute boondoggle. Or it may actually be something that works well," he said. "I'm thinking more the former than the latter."

The bank's corporate plan for 2018/19 to 2022/23 is set to be submitted to Parliament this fall, and is expected to show updated operating and capital budgets for the bank for that entire period.

The Access to Information documents say that the Department of Finance anticipates additional draw-downs to be requested for expenses this fiscal year, once the corporate plan is approved.