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Economy

Surprise Senate vote would overturn Biden environmental rule

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8 minute read

By Matthew Daly in Washington

WASHINGTON (AP) — In a surprise victory for Republicans, the Senate on Thursday voted to overturn a Biden administration rule requiring rigorous environmental review of major infrastructure projects such as highways, pipelines and oil wells — an outcome aided by Democratic Sen. Joe Manchin of West Virginia.

Manchin, a key player on energy and climate issues and a swing vote in the closely divided Senate, joined Republicans to support the measure, which was approved 50-47. The vote comes as Manchin has proposed a separate list of legislative measures to speed up federal permitting for major projects in return for his support of a Democratic bill to address climate change.

Republicans voted unanimously to overturn the Biden permitting rule, while Manchin was the only Democrat to support it. Three senators were absent: Republican John Cornyn of Texas and Democrats Patrick Leahy of Vermont and Jeff Merkley of Oregon. The vote sends the measure to the Democratic-controlled House, where it is unlikely to move forward.

Still, the vote signaled strong Senate support for action to reform the often onerous federal permitting process, which can take up to eight to 10 years for highways and other major projects. Streamlining federal review is a top Manchin and GOP priority that is not shared by most Democrats.

Sen. Dan Sullivan, an Alaska Republican, sponsored the measure to overturn the Biden rule, saying new regulations under the National Environmental Policy Act, or NEPA, will further bog down the permitting process and delay critical infrastructure projects the country needs.

The Biden rule — which overturns an action by the Trump administration loosening environmental reviews — requires regulators to consider the likely impacts on climate change and nearby communities before approving major projects. The new requirement “is going to add to the red tape” that prevents major infrastructure projects from being approved in a timely manner, Sullivan said.

While President Joe Biden has called infrastructure a priority — and pushed for a $1 trillion bipartisan infrastructure law passed last year — the new NEPA rule actually “makes it harder to build infrastructure projects” in the United States, Sullivan said.

“The only people, in my view, who really like this new system are radical far-left environmental groups that don’t want to build anything … and probably the Chinese Communist Party,” he said on the Senate floor. China and other competitors likely “love the fact that it takes 9 to 10 years to permit a bridge in the U.S.A.,” Sullivan said.

The White House strongly opposed the measure and threatened a veto if Congress approves it.

“This action would slow the construction of American infrastructure, lead to the waste of taxpayer resources on poorly designed projects and result in unnecessary and costly litigation and conflict that will delay permitting,” the White House said in a statement Thursday.

Manchin countered that, “for years I’ve worked to fix our broken permitting system, and I know the (Biden) administration’s approach to permitting is dead wrong.”

Manchin called Thursday’s vote “a step in the right direction” but said the measure likely “is dead on arrival in the House. That’s why I fought so hard to secure a commitment (from Democratic leaders) on bipartisan permitting reform, which is the only way we’re going to actually fix this problem.”

The new rule, finalized this spring, restores key provisions of NEPA, a bedrock environmental law that is designed to ensure community safeguards during reviews for a wide range of federal projects, including roads, bridges and energy development such as pipelines and oil wells. The longstanding reviews were scaled back under former President Donald Trump in a bid to fast-track projects and create jobs.

The White House Council on Environmental Quality said in implementing the new rule that it should restore public confidence during environmental reviews. The change could speed development by helping to “ensure that projects get built right the first time,” said CEQ Chair Brenda Mallory.

Projects approved by the Trump administration were frequently delayed or defeated by lengthy court battles from groups challenging environmental reviews as inadequate.

Manchin, who brokered a surprise deal last week on climate legislation with Senate Majority Leader Chuck Schumer, said he’s won promises from Biden and Democratic leaders in Congress to pursue permitting reforms in the Senate to speed approval of projects in his energy-producing state and across the country. Manchin’s wish list includes swift approval of the controversial Mountain Valley natural gas pipeline in his home state and Virginia. The pipeline is nearly complete but has been delayed for years by court battles and other issues.

Manchin’s list includes a number of proposals supported by Republicans, including a two-year deadline on environmental reviews; changes to the Clean Water Act; limitations on judicial review; and prompt action on projects determined by the Energy secretary to be in the national interest.

Environmental groups have decried Manchin’s proposals as counter-productive to the climate legislation and a threat to the environment and communities where projects would be built.

Madeleine Foote, deputy legislative director of the League of Conservation Voters, dismissed the Senate vote Thursday as “nothing more than a Republican-led stunt to appease their fossil fuel-industry allies.”

Foote and other environmentalists said strong NEPA review is needed to ensure that those most affected by an energy project have a say in the projects built in their communities.

“Thorough, community-based environmental reviews are critical to helping eliminate environmental racism and making sure low-income communities and communities of color are protected from polluters who want to build dirty, toxic projects in their backyards,” Foote said.

She called on Congress to approve the Manchin-Schumer climate bill as soon as possible. Schumer said votes on the bill are likely this weekend.

Kabir Green, director of federal affairs at the Natural Resources Defense Council, another environmental group, said Americans are “seeing the effects of climate change in catastrophic detail, from the heat waves in Texas to wildfires in New Mexico to the devastating flooding in Kentucky. But the Senate is voting to prevent the federal government from considering climate change when making decisions. This makes no sense.”

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Business

Federal departments failed to spend $38B on promised programs, services last year

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By Lee Berthiaume in Ottawa

The federal government failed to spend tens of billions of dollars in the last fiscal year on promised programs and services, including new military equipment, affordable housing and support for veterans.

Federal departments are blaming a variety of factors for letting a record total of $38 billion in funding lapse in 2021-22, including delays and disruptions caused by the COVID-19 pandemic.

They also say much of the money remains available for future years.

The unspent funds also played a big part in the Liberal government posting a smaller-than-expected deficit in the year ending March 31, 2022.

Canada rang up a $90.2 billion deficit — $23.6 billion less than had been projected in the budget.

The unprecedented amount of lapsed funding, much of which has been returned to the federal treasury, has one observer suggesting it is a sign of long-standing challenges delivering on big federal projects for the country.

The amount of lapsed funds across government is spelled out in the most recent iteration of the public accounts, a report on federal revenues and spending by every department and agency tabled in the House of Commons every year.

The $38.2 billion that was reported as lapsed in the last fiscal year marks a new record over the previous year, which was $32.2 billion. That was a dramatic increase over the previous record of $14 billion in 2019-20.

That compares to around $10 billion about a decade ago, when Stephen Harper’s Conservative government was accused by political opponents and experts alike of using large lapses to make cuts by stealth.

Health Canada and the Public Health Agency of Canada reported the largest lapses of all departments and agencies, with nearly $11.2 billion of their combined $28.2 billion budgets going unspent.

Much of that had been set aside for COVID-19 initiatives that were not needed, said Health Canada spokeswoman Tammy Jarbeau. Those include vaccines, personal protective equipment and rapid tests.

“Both Health Canada and the Public Health Agency of Canada have rigorous internal financial management controls designed to prevent, detect and minimize errors and financial losses, and ensure the funding is spent in the best interests of Canadians,” she wrote in an email.

The pandemic figured in the responses and explanations from many other departments and agencies, with many blaming COVID-19 for delays.

One of them was the Defence Department, which reported a lapse of $2.5 billion in the last fiscal year. Much of the money wasn’t spent due to delays in the delivery of new military equipment such as Arctic patrol vessels and upgrades to the Army’s armoured vehicles.

There were also delays on major infrastructure projects for the military, according to Defence Department spokeswoman Jessica Lamirande. Those include upgrading and rebuilding two jetties for the Navy in Esquimalt, B.C., and a new armoury in New Brunswick.

“The COVID-19 pandemic has had a significant impact on many of our business lines,” Lamirande said.

“The impacts of the pandemic on supply chain and industry capacity are causing manufacturing backlogs and delays.”

Lamirande added most of the unspent funds are expected to be available in future years through a process called reprofiling, in which schedules are revised to reflect planned spending in future years due to those delays.

Former parliamentary budget officer Kevin Page said the government’s handling of lapsed funding now is “a little more relaxed” than in previous years, when unspent funds were not reprofiled and even used to justify budget cuts in Ottawa.

But defence analyst David Perry of the Canadian Global Affairs Institute said the Defence Department’s lapse, which has been steadily growing in recent years, is a symptom of Ottawa’s continued difficulties purchasing new military equipment.

“If we’re not getting those procurement projects through, we’re not getting new equipment into the inventory, so we don’t actually have the gear for our troops,” he said, noting many of the delayed projects were launched under the Harper government.

Perry also noted the current rate of inflation, which is already naturally higher for military equipment and the defence sector than most other parts of the economy. Not spending money now means Canada will have to pay more for the same gear and services later, he said.

The Infrastructure Department, the Canadian Mortgage and Housing Corp. and the Fisheries Department, which includes the Canadian Coast Guard, also reported delays with different capital projects, including on affordable housing and broadband internet.

“Due to the unprecedented circumstances over the last few years such as the COVID-19 pandemic, disbursing funds to proponents for many projects are expected to and will take longer,” CMHC spokeswoman Claudie Chabot said in an email.

Perry suggested a bigger problem.

“The government of Canada’s ability to actually deliver services to the public, especially when it comes to large projects, large capital projects, be it for equipment or infrastructure or IT projects, is struggling across the board,” he said.

Other federal entities with large lapses included Indigenous Services Canada, which failed to spend $3.4 billion, and Crown-Indigenous Relations and Northern Affairs Canada, which reported a lapse of $2.2 billion.

Spokesman Vincent Gauthier attributed much of the latter lapse to “the timing and progress of negotiations for specific claims and childhood litigations,” adding that funds will available “in some instances” in future years.

Gauthier did not say why Indigenous Services, which is responsible for delivering federal services to First Nations, Inuit and Métis, failed to spend billions of dollars. He did say most of the money had been reprofiled “so that it will be available when recipients need it.”

Veterans Affairs Canada also reported a nearly $1 billion lapse last year, which the department blamed on fewer ill and injured ex-soldiers applying for assistance than expected.

However, critics have described earlier lapsed funding as evidence of the challenges many veterans face in accessing benefits and services. In 2014, the Royal Canadian Legion demanded the Harper government explain why $1.1 billion went unspent over seven years.

This report by The Canadian Press was first published Jan. 30, 2023.

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Alberta

Alberta budget set for Feb. 28, with focus on funding for health, school growth

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By Dean Bennett in Edmonton, Alberta, Canada

Alberta Finance Minister Travis Toews says the United Conservative Party government’s 2023 budget will be delivered on Feb. 28, the first day of the spring legislature sitting.

Toews said Friday it will focus on investing in health care and school enrolment growth.

It’s expected to be the final budget before voters go to the polls for a scheduled May 29 general election.

Alberta’s fortunes, powered mainly by energy revenues and further diversification of its economy, have been on the upswing since the global economy began rebounding from the COVID-19 pandemic.

Last fall, Toews announced the current budget year, which finishes at the end of March, is expected to record a $12.3-billion surplus.

That surplus comes even with $2.8 billion being set aside over the next three years to cover inflation-fighting programs and payouts to shield Albertans — particularly families, seniors and the vulnerable — from higher costs.

Toews said while energy prices remain volatile, the outlook is for them to stay strong.

“This budget will reflect the fact that health care is a priority, that health care capacity is a priority, ” said Toews in an interview.

“Alberta is leading the nation on net-inflow migration,” he added.

“Our population is growing. Our enrolment in our K-12 education system is growing, and the budget will reflect that good news story with additional enrolment growth.”

One outstanding question after the budget will be whether Toews will run again in the May vote.

He is a first-term UCP member representing Grande Prairie-Wapiti.

Toews declined to say whether he has made a decision.

“I’ll have more to say on that one later,” he said, “I’m focused on preparing the budget.”

This report by The Canadian Press was first published Jan. 27, 2023.

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