Scathing auditor general reports underscore political realities

Nearly 20 per cent of the SDTC projects examined by the AG were in fact ineligible (based on the government’s own rules) for funding, with a total price tag of $59 million. There were also 90 instances where the SDTC ignored conflict of interest provisions while awarding $76 million to various projects. Indeed, the AG found 63 cases where SDTC agency directors voted in favour of payments to companies in which they had declared interests.

If you needed more proof that the Trudeau government is misusing taxpayer money, the auditor general (AG) just released two scathing reports about improper contracting practices, conflict of interest, and funding provided for ineligible projects. Clearly, politicians and bureaucrats in Ottawa do not always act in the best interest of Canadians.

According to the first AG report, Sustainable Development Technology Canada (SDTC), the federal agency responsible for funding green technology projects, demonstrated “significant lapses… in governance and stewardship of public funds.” Nearly 20 per cent of the SDTC projects examined by the AG were in fact ineligible (based on the government’s own rules) for funding, with a total price tag of $59 million. There were also 90 instances where the SDTC ignored conflict of interest provisions while awarding $76 million to various projects. Indeed, the AG found 63 cases where SDTC agency directors voted in favour of payments to companies in which they had declared interests.

The second AG report focused on 97 contracts totalling $209 million awarded by the federal government to the McKinsey & Company consulting firm from 2011 to 2023. According to the AG, the government demonstrated “frequent disregard for procurement policies and guidance and that contracting practices often did not demonstrate value for money.” About 70 per cent of these contracts were awarded non-competitively—meaning no other companies were permitted to bid on the contracts.

These findings also follow an earlier report in February that found the federal government “repeatedly failed to follow good management practices in the contracting, development, and implementation” of the ArriveCAN mobile app, which cost Canadian taxpayers at least $59.5 million.

While the Trudeau government’s record-high levels of spending have made it clear that taxpayer money is being dished out left and right without much regard for the consequences for future generations of Canadians, the AG reports reveal chronic mismanagement, little accountability, and decision-makers acting in their own interests.

Government officials are handing huge sums of taxpayer money to people or companies who spend it without proper transparency or oversight. When considering these findings, Canadians should be skeptical of any politician or commentator who downplays government excesses or says we can’t reduce federal spending.

It’s also naïve to think that politicians and bureaucrats are benevolent civil servants who simply want to make the world a better place. In reality, like most people, they’re human beings motivated by self-interest.

James Buchanan, who won the Nobel Prize in economics in 1986, explained these concepts when pioneering a branch of economics called Public Choice Theory, which pays particular attention to the incentives policymakers face.

Politicians do not always act in the best interest of their constituents, and bureaucrats do not always act in the best interests of the public.

Why? Because it’s often in their interest to make decisions that benefit themselves, family members, friends or other cronies. If you decide to give money to companies despite a conflict of interest or if you award contracts to friends, you’re not making decisions in the best interest of society. People don’t suddenly become selfless when they enter the government sector. They respond to the same incentives as everyone else. The latest AG reports underscore this reality.

Author:

Jake Fuss

Director, Fiscal Studies, Fraser Institute

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Alberta

A Memorandum of Understanding that no Canadian can understand

Published on December 6, 2025

Todayville

From the Fraser Institute

By Niels Veldhuis

The federal and Alberta governments recently released their much-anticipated Memorandum of Understanding (MOU) outlining what it will take to build a pipeline from Alberta, through British Columbia, to tidewater to get more of our oil to markets beyond the United States.

This was great news, according to most in the media: “Ottawa-Alberta deal clears hurdles for West Coast pipeline,” was the top headline on the Globe and Mail’s website, “Carney inks new energy deal with Alberta, paving way to new pipeline” according to the National Post.

And the reaction from the political class? Well, former federal environment minister Steven Guilbeault resigned from Prime Minister Carney’s cabinet, perhaps positively indicating that this agreement might actually produce a new pipeline. Jason Kenney, a former Alberta premier and Harper government cabinet minister, congratulated Prime Minister Carney and Premier Smith on an “historic agreement.” Even Alberta NDP Leader Naheed Nenshi called the MOU “a positive step for our energy future.”

Finally, as Prime Minister Carney promised, Canada might build critical infrastructure “at a speed and scale not seen in generations.”

Given this seemingly great news, I eagerly read the six-page Memorandum of Understanding. Then I read it again and again. Each time, my enthusiasm and understanding diminished rapidly. By the fourth reading, the only objective conclusion I could reach was not that a pipeline would finally be built, but rather that only governments could write an MOU that no Canadian could understand.

The MOU is utterly incoherent. Go ahead, read it for yourself online. It’s only six pages. Here are a few examples.

The agreement states that, “Canada and Alberta agree that the approval, commencement and continued construction of the bitumen pipeline is a prerequisite to the Pathways project.” Then on the next line, “Canada and Alberta agree that the Pathways Project is also a prerequisite to the approval, commencement and continued construction of the bitumen pipeline.”

Two things, of course, cannot logically be prerequisites for each other.

But worry not, under the MOU, Alberta and Ottawa will appoint an “Implementation Committee” to deliver “outcomes” (this is from a federal government that just created the “Major Project Office” to get major projects approved and constructed) including “Determining the means by which Alberta can submit its pipeline application to the Major Projects Office on or before July 1, 2026.”

What does “Determining the means” even mean?

What’s worse is that under the MOU, the application for this pipeline project must be “ready to submit to the Major Projects Office on or before July 1, 2026.” Then it could be another two years (or until 2028) before Ottawa approves the pipeline project. But the MOU states the Pathways Project is to be built in stages, starting in 2027. And that takes us back to the circular reasoning of the prerequisites noted above.

Other conditions needed to move forward include:

The private sector must construct and finance the pipeline. Serious question: which private-sector firm would take this risk? And does the Alberta government plan to indemnify the company against these risks?

Indigenous Peoples must co-own the pipeline project.

Alberta must collaborate with B.C. to ensure British Columbians get a cut or “share substantial economic and financial benefits of the proposed pipeline” in MOU speak.

None of this, of course, addresses the major issue in our country—that is, investors lack clarity on timelines and certainty about project approvals. The Carney government established the Major Project Office to fast-track project approvals and provide greater certainty. Of the 11 project “winners” the federal government has already picked, most either already had approvals or are already at an advanced stage in the process. And one of the most important nation-building projects—a pipeline to get our oil to tidewater—hasn’t even been referred to the Major Project Office.

What message does all this send to the investment community? Have we made it easier to get projects approved? No. Have we made things clearer? No. Business investment in Canada has fallen off a cliff and is down 25 per cent per worker since 2014. We’ve seen a massive outflow of capital from the country, more than $388 billion since 2014.

To change this, Canada needs clear rules and certain timelines for project approvals. Not an opaque Memorandum of Understanding.

Niels Veldhuis

President, Fraser Institute

Business

Carney government should privatize airports—then open airline industry to competition

Published on December 3, 2025

Todayville

From the Fraser Institute

By Alex Whalen and Jake Fuss

This holiday season, many Canadians will fly to spend time to with family and friends. But air travellers in Canada consistently report frustration with service, cost and choice. In its recent budget, the Carney government announced it will consider “options for the privatization of airports.” What does this mean for Canadians?

Up until the 1990s, the federal government served as both the owner and operator of Canada’s major airports. The Chrétien government partially privatized and transferred the operation of major airports to not-for-profit airport authorities, while the federal government remained the owner of the land. Since then, the federal government has effectively been the landlord for Canada’s airports, collecting rent each year from the not-for-profit operating authorities.

What would full privatization of airports look like?

If the government allows private for-profit businesses to own Canada’s major airports, their incentives would be to operate as efficiently as possible, serve customers and generate profits. Currently, there’s little incentive to compete as the operating authorities are largely unaccountable because they only report to government officials in a limited form, rather than reporting directly to shareholders as they would under privatization. Private for-profit airports exist in many other countries, and research has shown they are often less costly for passengers and more innovative.

Yet, privatization of airports should be only the first step in a broader package of reforms to improve air travel in Canada. The federal government should also open up competition by creating the conditions for new airports, new airlines and new investment. Currently, Canada restricts foreign ownership of Canadian airlines, while also restricting foreign airlines from flying within Canada. Consequently, Canadians are left with little choice when booking air travel. Opening up the industry by reversing these policies would force incumbent airlines to compete with a greater number of airlines, generating greater choice and likely lower costs for consumers.

Moreover, the federal government should reduce the taxes and fees on air travel that contribute to the cost of airline tickets. Indeed, according to our recent research, among peer countries, Canada has among the most expensive air travel taxes and fees. These costs get passed on to consumers, so it’s no surprise that Canada consistently ranks as a very expensive country for air travel.

If the Carney government actually privatizes Canada’s airports, this would be a good first step to introducing greater competition in an industry where it’s badly needed. But to truly deliver for Canadians, the government must go much further and overhaul the numerous policies, taxes and fees that limit competition and drive up costs.