Business
Trans Mountain pipeline’s soaring cost provides more proof of government failure
From the Fraser Institute
By Julio Mejía and Elmira Aliakbari
To recap, since the Trudeau government purchased the project from Kinder Morgan for $4.5 billion in 2018, the cost of the Trans Mountain expansion has ballooned (in nominal terms) to $34 billion.
According to the latest calculations, the Trans Mountain pipeline expansion project, which the Trudeau government purchased from Kinder Morgan in 2018, will cost $3.1 billion more than the $30.9 billion projected last May, bringing the total cost to about $34 billion—more than six times the original estimate.
This is yet another setback for a project facing rising costs and delays. To understand how we arrived at this point, let’s trace the project’s history.
In 2013, Kinder Morgan applied to the National Energy Board (NEB) to essentially twin the existing pipeline built in 1953, which runs for 1,150 kilometres between Strathcona County, Alberta and Burnaby, British Columbia, with the goal to have oil flow through the expansion by December 2019.
In 2016, after three years of deliberations, the NEB approved the pipeline, subject to 157 conditions. By that time, according to Kinder Morgan, costs had risen by $2 billion, bringing the total cost to $7.4 billion.
And yet, despite Kinder Morgan following the legal and regulatory process to get the necessary approvals, the B.C. NDP and Green Party vowed to “immediately employ every tool available” to stop the project. At the same time, the Trudeau government was planning regulations that would increase the cost and uncertainty of infrastructure projects across the country.
Faced with mounting uncertainty and potential setbacks, Kinder Morgan planned to withdraw from the project in 2018. In response, the Trudeau government intervened, nationalizing the project by purchasing it from Kinder Morgan with taxpayer dollars for $4.5 billion. Once under government control, costs skyrocketed to $12.6 billion by 2020 and $21.4 billion by 2022 reportedly due to project safety requirements, financing costs, permitting costs, and crucially, more agreements with Indigenous communities. One year later, in 2023, the Trudeau government said the cost has risen to $30.9 billion.
To recap, since the Trudeau government purchased the project from Kinder Morgan for $4.5 billion in 2018, the cost of the Trans Mountain expansion has ballooned (in nominal terms) to $34 billion.
Surprised? You shouldn’t be.
When government attempts to build infrastructure projects, it often incurs cost overruns and delays due to a lack of incentives to build in an efficient and resourceful way. According to a study by Bent Flyvbjerg, an expert in this field, a staggering 90 per cent of 258 public transportation projects (in 20 countries) exceeded their budgets. The reason behind this phenomenon is clear—unlike private enterprises, government officials can shift cost overruns onto the public without bearing any personal financial consequences.
And the Trudeau government continues to make a bad situation even worse by introducing uncertainty and erecting barriers to private-sector investment in vital infrastructure projects including pipelines. Federal Bill C-69, for instance, overhauled the entire environmental assessment process and imposed complex and subjective review requirements on major energy projects, casting doubt on the viability of future endeavours.
What’s the solution to this mess?
Clearly, if policymakers want to help develop Canada’s natural resource potential—and the jobs, economic opportunity and government revenue that comes with it—they must enact regulatory reform and incentivize private investment. Rather than assuming the role of construction companies, governments should create an environment conducive to private-sector participation, thereby mitigating risk to taxpayers.
By implementing reasonable and competitive regulations that enhance investment incentives, policymakers—including in the Trudeau government—can encourage the private sector to build large-scale infrastructure projects that benefit the Canadian economy.
Authors:
Business
‘Context Of Chemsex’: Biden-Harris Admin Dumps Millions Into Developing Drug-Fueled Gay Sex App
From the Daily Caller News Foundation
By Owen Klinsky
The Biden-Harris administration is spending millions funding a project to advise homosexual men on how to more safely engage in drug-fueled intercourse.
The University of Connecticut (UCONN) in July announced a five-year, $3.4 million grant from the U.S. National Institute of Health (NIH) for Assistant Professor Roman Shrestha to develop his app JomCare — “a smartphone-based just-in-time adaptive intervention aimed at improving access to HIV- and substance use-related harm reduction services for Malaysian GBMSM [gay, bisexual, and other men who have sex with men] engaged in chemsex,” university news website UCONN Today reported. “Chemsex,” according to Northern Irish LGBTQ+ nonprofit the Rainbow Project, is the involvement of drug use in one’s sex life, and typically involves Methamphetamine (crystal meth), Mephedrone (meth), and GHB and GBL (G).
Examples of the app’s use-cases include providing a user who has reported injecting drugs with prompts about ordering an at-home HIV test kit and employing safe drug injection practices, UCONN Today reported. The app is also slated to provide same-day delivery of HIV prevention drug PrEP, HIV self-testing kits and even a mood tracker.
“In Malaysia, our research has indicated that harm reduction needs of GBMSM [gay, bisexual, and other men who have sex with men] engaged in chemsex are not being adequately met,” Shrestha told UCONN Today. “Utilizing smartphone apps and other mHealth tools presents a promising and cost-effective approach to expand access to these services.”
Homosexuality is illegal in Malaysia and is punishable by imprisonment, according to digital LGBTQ+ rights publication Equaldex. Drug use, including of cannabis, is illegal in Malaysia, and drug trafficking can be a capital offense.
The Old Border Czar VS The New Border Czar pic.twitter.com/9Ie8JRsroR
— Daily Caller (@DailyCaller) November 12, 2024
The NIH disbursed $773,845 to Shrestha in July to conduct a 90-day trial testing the efficacy of JomCare among 482 chemsex-involved Malaysian gays. It also provided Shrestha with $191,417 in 2022 to “facilitate access to gender-affirming health care” for transgender women in the country.
“Gender-affirming care” is a euphemism used to describe a wide range of procedures, including sometimes irreversible hormone treatments that can lead to infertility as well as irreversible surgeries like mastectomies, phalloplasties and vaginoplasties.
Shrestha has a track record of researching mobile health (mHealth) initiatives for foreign homosexuals, co-authoring a 2024 study entitled, “Preferences for mHealth Intervention to Address Mental Health Challenges Among Men Who Have Sex With Men in Nepal.”
The proliferation of LGBT rights has been a “foreign policy priority” under the Biden-Harris administration, a State Department spokesperson previously told the Daily Caller News Foundation, with President Joe Biden instructing federal government department heads to “to advance the human rights of LGBTQI+ persons.”
“Around the globe, including here at home, brave lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI+) activists are fighting for equal protection under the law, freedom from violence, and recognition of their fundamental human rights,” a 2021 White House memorandum states. “The United States belongs at the forefront of this struggle — speaking out and standing strong for our most dearly held values.”
President-elect Donald Trump announced on Nov. 12 that Elon Musk and Vivek Ramaswamy would collaborate to establish a new Department of Government Efficiency (DOGE), with Musk claiming the agency would feature a leaderboard for the “most insanely dumb spending of your tax dollars.” Some DOGE cuts could come from LGBTQ+ programs, such as a grant from the United States Agency for International Development to perform sex changes in Guatemala and State Department funding for the showing of a play in North Macedonia entitled, “Angels in America: A Gay Fantasia on National Themes.”
“The woke mind virus consists of creating very, very divisive identity politics…[that] amplifies racism; amplifies, frankly, sexism; and all of the -isms while claiming to do the opposite,” Musk said at an event in Italy in December 2023, according to The Wall Street Journal. “It actually divides people and makes them hate each other and hate themselves.”
Shrestha and the NIH did not respond to requests for comment. When reached for comment, a UCONN spokeswoman told the Daily Caller News Foundation that, “specific questions about the grant and the decision to award it to our faculty member should be directed to the NIH, since that’s the funding agency.”
From the Fraser Institute
By Alex Whalen and Tegan Hill
Back in the summer at a meeting in Halifax, several provincial premiers discussed a lawsuit meant to force the federal government to make changes to Canada’s equalization program. The suit—filed by Newfoundland and Labrador and backed by British Columbia, Saskatchewan and Alberta—effectively argues that the current formula isn’t fair. But while the question of “fairness” can be subjective, its clear the equalization program is broken.
In theory, the program equalizes the ability of provinces to deliver reasonably comparable services at a reasonably comparable level of taxation. Any province’s ability to pay is based on its “fiscal capacity”—that is, its ability to raise revenue.
This year, equalization payments will total a projected $25.3 billion with all provinces except B.C., Alberta and Saskatchewan to receive some money. Whether due to higher incomes, higher employment or other factors, these three provinces have a greater ability to collect government revenue so they will not receive equalization.
However, contrary to the intent of the program, as recently as 2021, equalization program costs increased despite a decline in the fiscal capacity of oil-producing provinces such as Alberta, Saskatchewan, and Newfoundland and Labrador. In other words, the fiscal capacity gap among provinces was shrinking, yet recipient provinces still received a larger equalization payment.
Why? Because a “fixed-growth rule,” introduced by the Harper government in 2009, ensures that payments grow roughly in line with the economy—even if the gap between richer and poorer provinces shrinks. The result? Total equalization payments (before adjusting for inflation) increased by 19 per cent between 2015/16 and 2020/21 despite the gap in fiscal capacities between provinces shrinking during this time.
Moreover, the structure of the equalization program is also causing problems, even for recipient provinces, because it generates strong disincentives to natural resource development and the resulting economic growth because the program “claws back” equalization dollars when provinces raise revenue from natural resource development. Despite some changes to reduce this problem, one study estimated that a recipient province wishing to increase its natural resource revenues by a modest 10 per cent could face up to a 97 per cent claw back in equalization payments.
Put simply, provinces that generally do not receive equalization such as Alberta, B.C. and Saskatchewan have been punished for developing their resources, whereas recipient provinces such as Quebec and in the Maritimes have been rewarded for not developing theirs.
Finally, the current program design also encourages recipient provinces to maintain high personal and business income tax rates. While higher tax rates can reduce the incentive to work, invest and be productive, they also raise the national standard average tax rate, which is used in the equalization allocation formula. Therefore, provinces are incentivized to maintain high and economically damaging tax rates to maximize equalization payments.
Unless premiers push for reforms that will improve economic incentives and contain program costs, all provinces—recipient and non-recipient—will suffer the consequences.
Authors:
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