You are working in the Government of British Columbia as an economist, and have been asked to write a
briefing note to inform Premier Richard McBride about the proposed agreement between the Canadian
Government and the Canadian Pacific Railway to build a rail connection between Lethbridge in the
Territory of Alberta and Nelson BC.

• Why should the government act? What is the rationale? Why won’t the market solve
the problem on its own?
• Why is there pressure to act now?
• Is the agreement on the whole a good idea from an economic perspective? Who is likely
to benefit, and will there be losers?