GAGNON: Trudeau’s ban on gas and diesel vehicles will hurt taxpayers

Article content

The federal government is going full throttle on its plan to ban new gas and diesel vehicles without any apparent concern about running into the reality of implementing electric vehicle standards.

Prime Minister Justin Trudeau announced the regulations in 2022. Unsurprisingly, the government still hasn’t provided much explanation about how people will pay for new electric cars or where they’ll get the power to charge them. And we certainly haven’t seen the full bill.

Canadians better buckle up because this ban is coming faster than they expect.

Trudeau’s policy will force automakers to have an inventory with 20% zero-emission vehicles by 2026.

In 2030, this threshold will rise to 60%.

By 2035, new gasoline- and diesel-powered cars will be banned in Canada.

All of this raises the question: Why the push for this ban?

Over the last two years, the Trudeau government, along with the governments of Quebec and Ontario, spent nearly $57 billion of taxpayer cash on subsidies, loans and production credits for companies like Ford, Honda, Volkswagen and Northvolt.

Those companies are set to produce electric car batteries, auto parts and other components over the coming years.

To put this amount in perspective, the federal electric-vehicle subsidies cost $5 billion more than Ottawa sent to provinces this year for health-care services.

Taxpayers may never see a return on these subsidies, since it may take more than 20 years before most of these deals break even, according to a report from the parliamentary budget officer in Ottawa. And that’s if the break-even happens at all.

This may only happen if Canadians are buying electric vehicles in masses. And Trudeau will use their tax money to make it happen.

Since 2019, the feds has been handing rebates of up to $5,000 for buyers of zero-emission vehicles. The initial cost of the incentive program was $300 million.

With the current average price of an electric car nearing $73,000, most families can’t purchase the cheapest EV, let alone a Tesla.

Affordability is the reason why less than half of Canadians are interested in buying an electric car right now.

But Trudeau decided that, if people could not afford an electric car, their tax dollars should still cover the bill for their wealthier neighbour to get a rebate.

He’s even doubling down by spending an additional $608 million on incentives over the next two years. And yet, to date, only 3% of the 26 million vehicles in Canada are electric.

Those huge subsidies are just the tip of the iceberg.

Banning gas and diesel vehicles will also result in a massive energy shift and it won’t be cheap.

The transition to a 100% electric vehicle fleet by 2035 would increase electricity demand across Canada by 15.3%, requiring the construction of 10 additional hydroelectric mega-dams or 13 large gas-fired power plants, according to a recent report from the Fraser Institute.

This means we would need at least 10 more mega-dams like Site C dam in British Columbia, which took nearly 20 years and more than $16 billion to complete.

Under Trudeau’s scheme, taxpayers will have to foot the bill for the new energy infrastructure across the country. But what’s less clear is what will happen if those mega-dams are not built in 10 years, when the EV mandates are in full force.

Energy shortages? Skyrocketing energy bills?

Now let’s take a step back.

Trudeau’s government has no idea if its massive subsidies to automakers will pay off. It doesn’t know how much it will spend on incentives to force people to buy an electric vehicle. And it doesn’t know how much it will cost to add the necessary energy infrastructure to make this transition happen.

But the bills always go to the same place: taxpayers.

Banning new gas and diesel vehicles without a plan is irresponsible. And Ottawa doesn’t seem to have a plan. So it’s time to scrap the ban before it hurts Canadians.

Nicolas Gagnon is the Quebec director of the Canadian Taxpayers Federation