National Newswatch

OTTAWA — Before its controversial tax proposals triggered a bitter war of words this summer, Finance Minister Bill Morneau's department was waging a similar communications battle over another contentious file: the Trudeau government's infrastructure bank.

A briefing note to Morneau last spring offered a glimpse of the strategy his department hoped to use to overcome "communications challenges" surrounding a $35-billion infrastructure financing agency central to the government's economic plans.

The "secret" memo offered reassurances to Morneau that his department would continue to work with Infrastructure Canada to find openings where they could proactively counter criticisms and misunderstandings related to the bank.

"The purpose and the benefits of the (Canada Infrastructure Bank) are not well understood," said the May memo, signed by deputy finance minister Paul Rochon.

"Messaging on the purpose of the CIB and the merit of its design could be reinforced. The (Finance) Department will be actively seeking opportunities to communicate the merits of the CIB to a broader audience."

It also offered some detail on how they could defend the bank, including a presentation designed to communicate its benefits "more plainly."

The partially redacted document, obtained by The Canadian Press under the Access to Information Act, was released last week as Morneau continues to fight fresh communications fires.

This time, Morneau is struggling to sell his controversial proposals to change the tax system for small businesses, a measure that's been met with howls of both opposition and grassroots outrage.

Morneau bills the changes as necessary to end tax advantages unfairly exploited by some wealthy business owners. Critics, including some Liberal backbenchers, fear the changes could hurt middle-class entrepreneurs, damage the economy, hinder investment and potentially drive doctors out of the country.

Amid the backlash, Morneau conceded last week that changes will be required to the proposals he announced in mid-July. The government is reviewing feedback it received on its tax plan during a 75-day consultation period that ended last week.

In defending his tax proposals, Morneau has said misinformation is circulating about the tax reforms.

"It's not always the case that everything we're hearing is unvarnished truth," Morneau told the Senate last week in reference to some of the complaints the government has heard about the tax reforms.

The government's efforts to sell the infrastructure bank earlier this year also became a victim of misperceptions, according to the memo to Morneau.

"A number of issues have been raised in the media coverage of the CIB proposal, which suggests there are communications challenges to overcome," said the briefing, which also provided examples:

— Media commentary suggested a lack of understanding about the bank's functions and the country's infrastructure issues, such as the infrastructure gap, the types of projects the bank would be involved in and why a new institution is needed.

— Concerns that the bank would only help private-sector profits and do little for the public.

— An impression the bank would privatize airports, even though Infrastructure Minister Amarjeet Sohi had publicly stated it would not be part of its mandate.

The document also listed key areas of criticism from parliamentary hearings into the bank, including concerns about the financial risk of the bank's activities for taxpayers, that it would not provide benefits to small municipalities and insufficient time for parliamentarians to study it.

In the weeks after the memo was created, the bank attracted a significant amount of media attention — thanks, in part, to Independent Sen. Andre Pratte's unsuccessful attempt to divide the budget bill to separate out provisions for the creation of the bank.

Objections were also raised about the bank's governance structure, which gives cabinet the final approval over projects to be financed.

Political rivals have warned the Crown corporation will likely force Canadians to pay twice for their infrastructure — first via the public treasury and then through user fees that will generate corporate profits.

The soon-to-be-operational bank is designed to use billions of public dollars as leverage to attract billions more in private investment for large, new projects — such as highways, bridges and transit systems.

Infrastructure is central to the Trudeau government's long-term growth strategy. It's committed more than $180 billion for new projects over the next 11 years and, as part of the effort, its hoping to further boost investments with a lift from private cash.

But in order to attract private capital the projects will have to be designed to generate steady, reliable returns for investors through revenue streams such as user fees.

Sohi has argued the bank will be a tool to fund infrastructure projects that may not otherwise be built, or projects that public or private bodies can't afford on their own.

Follow @AndyBlatchford on Twitter

Andy Blatchford, The Canadian Press

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