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MEBCO Response to Ontario Infrastructure Bank

Dear Ms. Best,

MEBCO has considered information regarding the establishment of the Ontario Infrastructure Bank (OIB). We understand that the OIB is in its orientation phase and is not operational and therefore we hope our early insights are helpful.

Many of MEBCO’s members invest extensively in infrastructure assets, inside Ontario, within Canada and globally. Each pension plan board would establish its own governance and due diligence practices when investing in any asset class, including infrastructure. One common element of due diligence is the consideration of the governance structure of the investee company and in the case of the OIB that is the OIB’s governance structure as well as any organization proposed to receive OIB funds. We believe our members would look at the board members of the OIB as a window into the investment culture. Our members would be interested in the investment process and philosophy – how investments are identified, what are the key criteria for investment. Key criteria our membership are likely to consider would be rate of return on a risk adjusted basis and labour practices, to name just two.

If the OIB is seeking funds from a membership base such as MEBCO’s we think it is essential that the OIB governance structure include labour and management representation. We believe the OIB will need to consider the sources of funds it seeks out and include those sources in the decision making process. We believe diverse representation at the governance level will help the success of the OIB.

MEBCO will be pleased to further discuss our thoughts with you to support the Ministry and the OIB as it develops.

Background on MEBCO

MEBCO was established in 1992 to represent the interests of Canadian multi-employer pension plans (MEPPs) and benefit plans (MEPs) with provincial and federal governments regarding proposed or existing legislation and policies affecting these plans. MEBCO is a federal no-share capital corporation, operating on a not-for-profit basis.

MEBCO is representative of all persons and disciplines involved in MEPs, including union and employer trustees, professional third-party administrators, non-profit or "in-house" plan administrators, professionals including actuaries, benefit consultants, lawyers and chartered accountants. MEBCO is administered by a Board of Directors consisting of representatives from each of the above groups. MEBCO represents all stakeholders in target benefit multi-employer pension plans (MEPPs) – employers, unions, and professionals.

Multi-employer pension plans (MEPPs) are typically administered by a board of trustees. The trustees in most MEPPs are appointed by some combination of the trade union(s) representing plan members and employer association(s) representing the participating employers. Both the trade unions and the employer associations are not-for-profit organizations with limited resources. The trade unions and the employer associations typically receive most of their funding through dues payable in accordance with the applicable collective agreements.

Yours truly,
Alex McKinnon, MEBCO President

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