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Scathing auditor general reports underscore political realities

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From the Fraser Institute

By Jake Fuss

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.

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Biden Admin Energy Policies Putting Americans Further At Risk In Potential War With China, Analysis Finds

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From the Daily Caller News Foundation

By NICK POPE

 

The environmental, social and corporate governance (ESG) movement is undermining U.S. energy security by artificially sapping demand for new refining projects, even though demand for fossil fuels and petrochemicals remains strong and could grow stronger in the event of a prolonged military conflict.

America’s energy systems and infrastructure may be currently unprepared to sustain a wartime economy in the event of a hot war with China, thanks in part to the Biden administration’s green policies, according to a new report published by the Heritage Foundation.

The report, published Thursday and titled “Chinese Handcuffs: Don’t Allow the U.S. Military to Be Hooked on Green Energy from China,” examines the state of American energy security and resilience in a potential war with China, taking stock of markets at home and overseas. The paper emphasizes the need for American policymakers to get ahead of any possible conflict with China by ensuring that the U.S. military has a robust and secure supply of traditional energy available, rolling back certain environmental regulations and targets pushed by the Biden administration, building more strategic energy infrastructure and bolstering existing commercial relationships with friendly countries, all of which may heighten deterrence with an adversarial country considering escalation with the U.S.

“Due to a heavy reliance on foreign sources, poor policy choices, and constraints on the transport of fuels, the U.S. military could be vulnerable,” the report states. “The risk is for localized fuel shortages, global supply disruptions, and Chinese economic coercion during a conflict driving significantly increased energy demands.”

Brent Sadler, the report’s author and a 26-year U.S. Navy veteran who now works as a senior research fellow for naval warfare and advanced technology at the Heritage Foundation, further emphasized that while steps to heighten America’s energy security will be expensive and require political will, they are necessary measures to ensure that the U.S. can transition to and sustain a wartime footing against near-peer competitors like China. Numerous pundits and ex-military personnel have suggested that China is getting ready for a war to start in the coming years, whether in Taiwan or in the South China Sea.

“America’s energy network is brittle in some regions and unable to adjust easily to surges in demand,” the report states. “In wartime, the consequences of such weaknesses could be an inability to sustain military combat operations and the inability of wartime industry to keep America safe. On the other hand, readiness for this possibility could be a significant advantage, enabling the United States to deter China by confronting it with a foe that is able to wage a prolonged war backed by a resilient wartime economy.”

The insistence of some federal and state officials — particularly Democrats — on transitioning the American economy to reliance on green energy poses a major problem for American security, the report asserts. Additionally, the environmental, social and corporate governance (ESG) movement is undermining U.S. energy security by artificially sapping demand for new refining projects, even though demand for fossil fuels and petrochemicals remains strong and could grow stronger in the event of a prolonged military conflict.

The Biden administration has pledged to invest at least $1 trillion over the next decade to advance its massive climate agenda, and federal agencies have pushed stringent regulations and taken other bureaucratic actions targeting the broader American energy sector. The administration is also looking to make the military a more climate-friendly organization, including by seeking to have the Department of Defense (DOD) transition its non-tactical vehicle fleet to electric models by 2030.

Additionally, the supply chains for many of the green energy technologies favored by the Biden administration are dominated by China, the report points out. Numerous energy and national security experts have highlighted that retiring existing energy infrastructure in favor of products reliant on China-dominated supply chains is likely to make America more vulnerable, particularly in the event of an acute geopolitical crisis.

One specific element of the American energy system in need of change is the Strategic Petroleum Reserve (SPR), a de facto emergency supply of oil stored in underground caverns along the Gulf Coast established in the 1970s amid an energy crisis, according to the report. Sadler recommends that policymakers begin to treat the SPR as a key tool for the military to use in the event of war, given China’s rise, as well as improving energy transportation infrastructure to more easily get SPR supply to coastal regions where the military can use it expediently.

The Biden administration has used the SPR as a tool for manipulating markets, as officials decided to release approximately 180 million barrels from the stockpile to bring down spiking energy costs ahead of the 2022 midterm elections. Several million of those barrels were sold to Chinese entities, and the administration has subsequently floated the possibility of again tapping into the SPR ahead of the pivotal 2024 elections while the reserve remains at its lowest levels in about 40 years, according to the U.S. Energy Information Administration.

Stadler calculated that the SPR’s current inventory would need a boost of about 55 million more barrels in order to single-handedly supply the amount of oil that U.S. forces used in Operation Desert Storm in 1990.

Deliberate policy choices and infrastructure upgrades are needed to make sure that the U.S. is able to effectively fight China in a prolonged conflict, Stadler contends in the report. Making these adjustments would help to provide an advantage over potential adversaries like China that rely on energy imports, according to Stadler.

Beyond SPR-related adjustments, the report also identifies an urgent need to unleash refiners and build out more pipeline capacity in light of China’s possible ability to launch highly disruptive cyber attacks against key pipeline and shipping infrastructure.

Additionally, Stadler emphasizes the importance of strengthening relationships with energy-rich countries that could be key sources of energy for American forces around the world in the event of a hot war with China. While several memoranda of understanding are in place with such countries, Stadler suggests that U.S. officials should move to elevate these agreements to treaty status to enhance America’s standing with those countries and decrease China’s ability to pressure third-party countries against assisting American forces.

“This is especially true for scenarios in which a major war disrupts overseas energy markets and normal shipping methods. Under such conditions, the U.S. will need more diverse and reliable overseas suppliers for military operations,” the report states. “Given the global impact that a war with China would have, the U.S. urgently needs to ensure that it has enough fuel stocks and crude oil to allow it time to adjust to a wartime footing.”

Neither the White House nor DOD responded immediately to requests for comment.

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Weaponizing human rights tribunals

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From the Macdonald Laurier Institute

By Stéphane Sérafin for Inside Policy

If adopted, Bill C-63 could unleash a wave of “hate speech” complaints that persecute – and prosecute – citizens, businesses, or organizations while stifling online expression.

Much has already been written on Bill C-63, the Trudeau government’s controversial Bill proposing among other things to give the Canadian Human Rights Tribunal jurisdiction to adjudicate “hate speech” complaints arising from comments made on social media. As opponents have noted, the introduction of these new measures presents a significant risk to free expression on many issues that ought to be open to robust public debate.

Proponents, for their part, have tended to downplay these concerns by pointing to the congruence between these new proposed measures and the existing prohibition contained in the Criminal Code. In their view, the fact that the definition of “hate speech” provided by Bill C-63 is identical to that already found in the Criminal Code means that these proposed measures hardly justify the concerns expressed.

This response to critics of Bill C-63 largely misses the point. Certainly, the existing Criminal Code prohibitions on “hate speech” have and continue to raise difficult issues from the standpoint of free expression. However, the real problem with Bill C-63 is not that it adopts the Criminal Code definition, but that it grants the jurisdiction to adjudicate complaints arising under this definition to the Canadian Human Rights Tribunal.

Established in 1977, the Canadian Human Rights Tribunal is a federal administrative tribunal based on a model first implemented in Ontario in 1962 and since copied in every other Canadian province and territory. There is a Canadian Human Rights Tribunal, just as there is an Ontario Human Rights Tribunal and a British Columbia Human Rights Tribunal, among others. Although these are separate institutions with different jurisdictions, their decisions proceed from similar starting points embedded in nearly identical legislation. In the case of the Canadian Human Rights Tribunal, that legislation is the Canadian Human Rights Act.

Tribunals such as the Canadian Human Rights Tribunal are administrative bodies, not courts. They are part of the executive branch, alongside the prime minister, Cabinet, and the public service. This has at least three implications for the way the Tribunal is likely to approach the “hate speech” measures that Bill C-63 contemplates. Each of these presents significant risks for freedom of expression that do not arise, or do not arise to the same extent, under the existing Criminal Code provisions.

The first implication is procedural. As an administrative body, the Tribunal is not subject to the same stringent requirements for the presentation of evidence that are used before proper courts, and certainly not subject to the evidentiary standard applied in the criminal law context. But more importantly still, the structure of the Canadian Human Rights Act is one that contemplates a form of hybrid public-private prosecution, in which the decision to bring a complaint falls to a given individual, while its prosecution is taken up by another administrative body, called the Human Rights Commission.

This model differs from both the criminal law context, where both the decision to file charges and prosecute them rest with the Crown, and from the civil litigation context, where the plaintiff decides to bring a claim but must personally bear the cost and effort of doing so. With respect to complaints brought before the Tribunal, it is the complainant who chooses to file a complaint, and the Human Rights Commission that then takes up the burden of proof and the costs of prosecution.

In the context of the existing complaints process, which deals mainly with discriminatory practices in employment and the provision of services, this model is intended to alleviate burdens that might deter individuals from bringing otherwise valid discrimination complaints before the Tribunal. Whatever the actual merits of this approach, however, it presents a very real risk of being weaponized under Bill C-63. Notably, the fact that complainants are not expected to prosecute their own complaints means that there is little to discourage individuals (or activist groups acting through individuals) from filing “hate speech” complaints against anyone expressing opinions with which they disagree.

This feature alone is likely to create a significant chilling effect on online expression. Whether a complaint is ultimately substantiated or not, the model under which the Tribunal operates dispenses complainants from the burden of prosecution but does not dispense defendants from the burden of defending themselves against the complaint in question. Again, this approach may or may not be sensible under existing anti-discrimination measures, which are primarily aimed at businesses with generally greater means. But it becomes obviously one-sided in relation to the “hate speech” measures contemplated by Bill C-63, which instead target anyone engaging in public commentary using online platforms. Anyone who provides public commentary, no matter how measured or nuanced, will thus have to risk personally bearing the cost and effort of defending against a complaint as a condition of online participation. Meanwhile, no such costs exist for those who might want to file complaints.

A second implication arising from the Tribunal’s status as an administrative body with significant implications for Bill C-63 is that its decisions attract “deference” on appeal. By this, I mean that its decisions are given a certain latitude by reviewing courts that appeal courts do not generally give to decisions from lower tribunals, including in criminal matters. “Deference” of this kind is consistent with the broad discretion that legislation confers upon administrative decision-makers such as the Tribunal. However, it also raises significant concerns in relation to Bill C-63 that its proponents have failed to properly address.

In particular, the deference granted to the Tribunal means that proponents of Bill C-63 have been wrong to argue that the congruence between its proposed definition of “hate speech” and existing provisions of the Criminal Code provides sufficient safeguards against threats to freedom of expression.

Deference means that it is possible, and indeed likely, that the Tribunal will develop an interpretation of “hate speech” that diverges significantly from that applied under the Criminal Code. Even if the language used in Bill C-63 is identical to the language found in the Criminal Code, the Tribunal possesses a wide latitude in interpreting what these provisions mean and is not bound by the interpretation that courts give to the Criminal Code. It may even develop an interpretation that is far more draconian than the Criminal Code standard, and reviewing courts are likely to accept that interpretation despite the fact that it diverges from their own.

This problem is exacerbated by the deferential approach that reviewing courts have lately taken towards the application of the Canadian Charter of Rights and Freedoms to administrative bodies such as the Tribunal. This approach contrasts to the direct application of the Charter that remains characteristic of decisions involving the Criminal Codeincluding its “hate speech” provisions. It also contrasts with the approach previously applied to provincial Human Rights Tribunal decisions dealing with the distribution of print publications that were found to amount to “hate speech” under provincial human rights laws. Decisions such as these have frequently been criticized for not taking sufficiently seriously the Charter right to freedom of expression. However, they at least involve a direct application of the Charter, including a requirement that the government justify any infringement of the Charter right to free expression as a reasonable limit in a “free and democratic society.”

Under the approach now favoured by Canadian courts, these same courts now extend the deference paradigm to administrative decision-makers, such as the Canadian Human Rights Tribunal, even where the Charter is potentially engaged. In practice, this means that instead of asking whether a rights infringement is justified in a “free and democratic society,” courts ask whether administrative-decision makers have properly “balanced” even explicitly enumerated Charter rights such as the right to freedom of expression against competing “Charter values” whenever a particular administrative decision is challenged.

This approach to Charter-compliance has led to a number of highly questionable decisions in which the Charter rights at issue have at best been treated as a secondary concern. Notably, it led the Supreme Court of Canada to affirm the denial of the accreditation of a new law school at a Christian university in British Columbia, on the basis that this university imposed a covenant on students requiring them to not engage in extra-marital sexual relations that was deemed discriminatory against non-heterosexual students. Four of the nine Supreme Court of Canada judges would have applied a similar approach to uphold a finding by the Quebec Human Rights Tribunal that a Quebec comedian had engaged in discriminatory conduct because of a routine in which he made jokes at the expense of a disabled child who had cultivated a public image. (With recent changes to the composition of the court, that minority would now likely be a majority). This approach to Charter-compliance only increases the likelihood that the proposed online hate speech provisions will develop in a manner that is different from, and more repressive than, the existing Criminal Code standard.

Finally, the third and potentially most consequential difference to arise from the Tribunal’s status as an administrative rather than judicial body concerns the remedies that the Tribunal can order if a particular complaint is substantiated. Notably, the monetary awards that the Tribunal can impose – currently capped at $20,000 – are often imposed on the basis of standards that are more flexible than those applicable to civil claims brought before judicial bodies. An equivalent monetary remedy is contemplated for the new online “hate speech” provisions. This remedy is in addition to the possibility, also currently contemplated by Bill C-63, of ordering a defendant to pay a non-compensatory penalty (in effect, a fine payable to the complainant, rather than the state) of up to $50,000. This last remedy especially adds to the incentives created by the Commission model for individuals (and activist groups) to file complaints wherever possible.

That said, the monetary remedies contemplated by Bill C-63 are perhaps not the most concerning remedies as far as freedom of expression is concerned. Bill C-63 also provides the Tribunal with the power to issue “an order to cease the discriminatory practice and take measures, in consultation with the Commission on the general purposes of the measures, to redress the practice or to prevent the same or a similar practice from recurring.” This remedy brings to mind the Tribunal’s existing power to under the anti-discrimination provisions of the Canadian Human Rights Act.

It is not entirely clear how this kind of directed remedy will be applied in the context of Bill C-63. The Bill provides for a number of exemptions to the application of the new “hate speech” measures, most notably to social media platforms, which may limit their scope of application to some extent. Nonetheless, it is not inconceivable that remedies might be sought against other kinds of online content distributors in an effort to have them engage in proactive censorship or otherwise set general policy with little or no democratic oversight. This possibility is certainly heightened by the way in which the existing directed remedies for anti-discrimination have been used to date.

A prominent example of directed remedies being implemented in a way that circumvents democratic oversight is provided by the Canada Research Chairs (“CRC”) program endowed by the federal government at various Canadian universities. That program has recently come under scrutiny due to the on appointments under the CRC program. In reality, those implementing the quotas are merely proceeding in accordance with a settlement agreement entered into by the federal government following a complaint made by individuals alleging discrimination in CRC appointments. That complaint was brought before the Tribunal and sought precisely the kind of redress to which the government eventually consented.

Whatever the merits of the settlement reached in the CRC case, the results achieved by the complainants through their complaint to the Tribunal were far more politically consequential than the kinds of monetary awards that have been the focus of most discussion in the Bill C-63 context. As with the one-sidedness of the procedural incentives to file complaints and the deference that courts show to Tribunal decisions, the true scope of the Tribunal’s remedial jurisdiction presents significant risks to freedom of expression that simply have no equivalent under the Criminal Code. These issues must be kept in mind when addressing the content of that Bill, which in its current form risks being weaponized by politically motivated individuals and activist groups to stifle online expression with little to no democratic oversight.


Stéphane Sérafin is a senior fellow at the Macdonald-Laurier Institute and assistant professor in the Common Law Section of the Faculty of Law at the University of Ottawa. He holds a Bachelor of Social Science, Juris Doctor, and Licentiate in Law from the University of Ottawa and completed his Master of Laws at the University of Toronto. He is a member of the Law Society of Ontario and the Barreau du Québec.

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