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Trans Mountain pipeline’s soaring cost provides more proof of government failure

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4 minute read

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.

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Addictions

The Fentanyl Crisis Is A War, And Canada Is On The Wrong Side

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From the Frontier Centre for Public Policy

By Brian Giesbrecht

Drug cartels, China, and Canada’s negligence are fueling the deadliest epidemic of our time

It took the threat of U.S. tariffs for Canada to wake up to the horrors of the fentanyl epidemic that is destroying young lives and shattering families. Canadians, who panicked over COVID-19 deaths, have hardly noticed that far more healthy Canadians and Americans are now dying from fentanyl overdoses than ever died from COVID.

Yet while Americans confront this deadly epidemic, Canada remains oblivious to how deeply the crisis has infiltrated our borders.

A grim milestone came in 2021 when U.S. opioid overdose deaths exceeded 100,000 in a single year. More than a million Americans have died from opioid overdoses since these highly addictive drugs first entered the market. Today, fentanyl overdose is the leading cause of death for Americans aged 18 to 25.

Behind every kilogram of fentanyl lies half a million potential deaths. Behind every pill—a game of Russian roulette.

Fentanyl is a synthetic opioid so powerful that one kilogram can kill 500,000 people. Its extreme potency makes it both highly dangerous and easy to smuggle. A single backpack thrown across the border can carry $1 million worth of the drug. It is easy to see why so many opportunists are willing to risk their lives producing and selling it. Overdose statistics fail to capture the bodies found in deserts or those murdered in the vicious drug trade.

Fentanyl is produced for a few cents per pill but sold on the street for many times that, making it both profitable and a cheap high. Incredibly addictive, it is found in virtually all street drugs, giving “the most bang for the buck.” Made by amateurs, these drugs are carelessly laced with lethal doses. And because the pills look identical, users never know whether a dose will get them high—or kill them.

But Canada is not just a bystander in this crisis. A loophole in our border laws—the “de minimis” exemption—has turned Canada into a gateway for fentanyl entering U.S. communities. This exemption allows exporters to ship small packages valued at less than $800 directly to customers with minimal border inspection. Chinese exporters exploit this loophole to ship fentanyl precursors into Canada, where they are processed into pills or moved to Mexico under the supervision of Mexican drug cartels.

The Trump administration has pressed Canada to close this loophole. That it has existed for years, almost unnoticed, should shock us to the core.

The problem of fentanyl production within Canada should not be minimized. The RCMP reports that fentanyl labs are appearing across B.C., often producing methamphetamine alongside fentanyl. These small labs supply both domestic and international markets. The threat is real, and it is growing.

Exactly how many Canadians have died from fentanyl overdoses is unclear. However, with Canada’s population roughly one-ninth of the U.S., it is reasonable to estimate that Canadian deaths are approximately one-ninth of U.S. numbers.

But overdose numbers alone don’t tell the whole story. The number of lives wrecked by this drug is staggering. Parents watch their children—once vibrant and full of promise—disappear before their eyes. Their beauty fades, their minds unravel, and their lives collapse into the desperate cycle of chasing the next fix. Some escape. Many don’t. Until death takes them, that is.

The new Trump administration has promised to confront this carnage. “This is a drug war,” Peter Navarro, assistant to the president and director of the Office of Trade and Manufacturing Policy, recently told reporters. “The Mexican cartels have expanded up to Canada, making fentanyl there and sending it down to the U.S. The Chinese are using Canada to send in small parcels below the radar. It’s important that Canadians understand we are trying to stop the killing of Americans by these deadly drugs.”

But while the U.S. acts, Canada hesitates. Trump is addressing the problem—Canada is enabling it.

The Trump administration also views Canada’s lax drug laws and casual attitude toward buying and selling even the most dangerous drugs as an exacerbating factor. However, on the fentanyl issue, it is clear Trump is determined to tackle a problem Canada has largely ignored. He should be commended for this, and Canada should start cleaning up its own mess.

Yet fentanyl smuggling from Canada is only part of a larger issue. Behind the drug trade lies an even more insidious enemy: the Chinese Communist Party (CCP).

The importation of fentanyl precursors from China, facilitated by Mexican cartels, has turned Vancouver into a money-laundering hub for the CCP. Investigative reporters like Sam Cooper and Terry Glavin have revealed the depth of this corruption, despite the Hogue Commission’s failure to expose it fully.

Ryan P. Williams, president of the Claremont Institute, warns that “The fentanyl crisis is part of a larger campaign by the CCP to destabilize Western nations. They flood our streets with poison while corrupting our institutions from within. If Canada doesn’t confront this threat, it will lose not only lives—but its sovereignty.”

Our new “fentanyl czar,” appointed by Prime Minister Justin Trudeau, should not only address the drug crisis but also expose how deeply a hostile CCP has compromised Canada.

Tackling the fentanyl problem will be enormously difficult—likely impossible— for the Trump administration without cooperation from China, Mexico and even Canada. And forcing that cooperation is likely the first part of Trump’s plan.

Canada’s role may be small, but it must take full responsibility for securing its borders and confronting the fentanyl crisis. Trump has forced us to act. Now, if we are serious about restoring our nation’s integrity, we must break the CCP’s grip on our institutions.

In doing so, we will save Canadian lives.

Brian Giesbrecht is a retired Manitoba judge. He is a Senior Fellow at the Frontier Centre for Public Policy. He was recently named the ‘Western Standard Columnist of the Year.’

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Business

Biden-era tax on natural gas repealed, a boon for energy industry

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Fr0m The Center Square

By Thérèse Boudreaux

America’s natural gas industry celebrated Monday after President Donald Trump signed into law a resolution repealing Biden-era fees on methane emissions.

The Waste Emissions Charge, which Republicans say is the equivalent of a natural gas tax, was authorized by the 2022 Inflation Reduction Act and implemented by the Environmental Protection Agency in November 2024.

The resolution rescinds that regulation under the Congressional Review Act. The CRA legislation gives Congress the authority to repeal regulations issued during the final months of a previous administration.

House Committee on Energy and Commerce Chairman Brett Guthrie, R-Ky., called the repeal “a victory for the American businesses and families who would have been forced to bear the cost of the Biden-Harris Administration’s natural gas tax.”

“It’s time to restore American energy dominance by harnessing innovation and producing the natural gas needed to support our electric grid,” Guthrie added.

Energy experts who testified before Congress in February said the high energy prices during Joe Biden’s presidency directly resulted from increased environmental regulations on energy production. The regulations slowed down domestic energy production and consequently led to increased costs, they said.

The American Exploration and Production Council (AXPC) shares the same view, praising Republicans in Congress and Trump for repealing the Waste Emissions Charge.

“AXPC thanks President Trump for signing the Congressional Review Act legislation – to undo EPA’s flawed rule to implement the natural gas tax,” AXPC CEO Anne Bradbury stated. “While American energy producers remain laser focused on reducing methane emissions, this punitive rule risked undermining those efforts.”

An analysis by the Congressional Budget Office shows that “Charging for methane emissions leads to an increase in the price of natural gas and a decrease in the quantity of natural gas produced and consumed.”

But environmental groups have argued that the legislation will increase energy costs and disrupt efforts to reduce emissions of a potent greenhouse gas. Nearly 80 environmentalist groups recently sent a letter urging lawmakers to keep the regulation, about to take effect, in place.

The Center Square reached out to multiple environmental groups but received no response in time for publication.

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