Article content

OTTAWA — The head of the $35-billion Canada Infrastructure Bank (CIB) defended a recent loan that was awarded to a Montreal light rail project, pushing back against questions over whether the bank can operate free of political influence.

In an interview with the National Post, the bank’s CEO Pierre Lavallée said the $1.28-billion loan, beginning at just one per cent interest and rising to three per cent over 15 years, will ultimately lessen the risk assumed by taxpayers. The CIB offered the loan to Montreal’s Réseau express métropolitain (REM) light rail project on August 22, marking its first investment since Finance Minister Bill Morneau announced plans to form the bank in November 2016.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Head of $35B Infrastructure Bank pushes back against political influence claims, defends low-interest loan Back to video

But the loan’s ultra-low interest rate came as a surprise to some in the finance community, prompting questions over whether the CIB will operate as a fully autonomous and self-sustaining body. Ottawa has long said the taxpayer-funded bank would make decisions based on market principles, funnelling money into public transit, green technology and trade-related infrastructure.