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Canada isn’t a country, so much as an elaborate program for distributing public money to a handful of manufacturing companies in southern Ontario. It doesn’t matter if the government in Ottawa is Liberal or Conservative. And it doesn’t matter if whatever is being manufactured is something people want to buy. The existence of industries in other parts of the country, such as oil and gas in Alberta, that thrive largely without subsidies only seems to reinforce Ottawa’s need to coddle Central Canada.
The farce that has become the electric vehicle industry, with more than $40 billion in Canadian subsidies and tax breaks, is, perhaps, the greatest example of this grift. In decades past, Ontario manufacturing companies produced something people actually needed or wanted. Under the National Policy, western farmers were forced to purchase equipment at inflated rates, while they competed, largely unprotected, on international grain markets, but at least farmers needed the equipment. Though the traditional auto industry was bailed out under the Harper government, you could at least make the case that Canadians were interested in buying cars and trucks.
As for the EV battery plants that the federal and Ontario governments are dispensing cash to, in order to be successful, they would have to produce batteries for cars that have a hope of selling, and that is not at all clear. Sales have fallen flat, as consumers are put off by the high cost and poor performance of electric vehicles compared to gas-powered options. Carmakers — such as Volkswagen, Ford, General Motors and Mercedes — are scaling back production, and even Tesla sales are dropping.
The Liberals remain unmoved by market realities, however. At an announcement of yet more EV-related subsidies on Monday, Prime Minister Justin Trudeau said that, “Canada has positioned itself to be a leader in the EV industry and we will continue to be because those are where the jobs are going to be.” But if it was truly the industry of the future, it wouldn’t need government support to grow, a reality that is entirely lost on Ottawa.
In any case, if Canadians don’t want to buy EVs of their own accord, the feds will try to force them to by requiring an increasing percentage of vehicles sold in Canada to be electric. The aim is for 20 per cent of all cars and light trucks sold in this country to be zero-emitting by 2026, 60 per cent by 2030 and 100 per cent by 2035. So not only will taxes subsidize the EV industry, under the Liberals’ preferred scenario, Canadians will be compelled, if they want to drive, to spend their (ever dwindling) disposable income on vehicles they’ve already paid for through the public purse.
The Liberals claim their goal is to meet emissions targets, but their EV policies are pretty much the same old Central Canadian protectionism, just with the added pretension of saving the planet. This is especially true given the fact that many of the minerals needed in the production of electric vehicles can be found in Canada, but under current regulations, it can take a decade or more to bring a new mine online. As mineral mining is not the primary industry in southern Ontario, where elections are won and lost, the inexpensive option of government just getting out of the way isn’t even on the Liberals’ radar, though it is on Ontario Premier Doug Ford’s agenda.
Similar policies of subsidizing, then mandating (directly or indirectly) the production and sale of EVs exist in the United States and Europe, and, just like in Canada, they exist to protect favoured industries. All that separates the industrial policy of today from the industrial policy of, say, 10 years ago, is how important the Liberals, and the Biden Democrats, claim their policies are to the existence of humanity.
It was only natural that China would try to exploit this by flooding global markets with cheap electric vehicles. If governments are going to rig it so that only EVs can be sold, why wouldn’t the Chinese Communist Party, which aims to destabilize western democracies at any chance it gets, seek to benefit from that? The West is obsessed with climate posturing. China is obsessed with testing and taking advantage of our self-delusions to gain dominance.
The fact that the U.S. and the European Union have responded by putting massive tariffs, 100 per cent and up to 38 per cent respectively, on Chinese EVs, shows that subsidies and mandates were never really about controlling carbon emissions. If that were the case, why not just let Chinese cars in, especially if they are affordable enough to encourage people to buy them?
In Canada, the political interests at play are obvious. While the government continues to study whether or not to implement tariffs, the Opposition sensed an opening and promised to match the American toll of 100 per cent. Conservative Leader Pierre Poilievre said China was motivated by the goal of “crushing our steel, our aluminum and our automotive production and taking our jobs.” At least he didn’t claim to be saving the world. Trudeau was incredulous and accused Poilievre of faking his support for the auto industry, calling it “baloney.”
The suggestion that this has anything to do with anything beyond trying to win seats in Ontario is laughable.
An added wrinkle is the fact that China is an unfriendly nation with obviously malevolent intentions, and Chinese EVs are potential security threats, with technology that could gather data and be accessed remotely. A possible solution, though, would be to be ban the import of certain technologies, rather than the cars themselves, as Chinese EVs are often already equipped with western-developed software.
Whether a true threat or not, the importation of Chinese vehicles has only become a problem because of subsidies pouring into the EV market across the western world. As long as governments maintain their subsidize-and-mandate approach to EVs, China will be incentivized to take advantage, no matter how high the tariffs go.
National Post
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