EDITORIAL: Canada’s bet on EVs coming up snake eyes

Article content

On April 27 last year, then prime minister Justin Trudeau posted a video on X boasting that, “We bet big on electric vehicles. Now that industry is betting on us.”

Fifteen months later, all bets are off.

Trudeau’s gone and U.S. President Joe Biden, who shared his enthusiasm for subsidizing the EV industry, has been replaced by Donald Trump, who is dismantling those subsidies.

Despite that, Trudeau’s successor, Prime Minister Mark Carney, appears to be doubling down on Trudeau’s bet.

In some ways, the government is trapped.

Canada’s federal and provincial governments — mainly Ontario and Quebec — have already earmarked up to $52.5 billion of taxpayers’ money to subsidize 13 major EV projects in Canada.

That’s $6.3 billion, or 14%, more than the $46.1 billion the industry itself is investing in them, according to the parliamentary budget officer.

Meanwhile, EV sales are dramatically down in Canada and some EV projects are on hold as a result.

Sales dropped by almost a third in May compared to a year ago, comprising a mere 7.9% of all new car sales, according to Statistics Canada.

That’s far below the federal government mandate that begins next year, requiring that zero emission vehicles — meaning battery-electric, hydrogen fuel cell or plug-in hybrid — account for 20% of all new car sales, rising to 60% in 2030 and 100% in 2035.

The auto sector says the only way to achieve that would be to pull a million new gas-powered vehicles off the market, limiting consumer choice, increasing delivery times and driving up costs for consumers at a time when our auto sector is under siege from Trump’s tariff war.

The only way for the Liberal government to increase EV sales —  which are more expensive than gas-powered vehicles — is to restore a federal program giving taxpayer-funded subsidies of up to $5,000 to purchasers of new EVs.

It began in 2019 and was suspended in January 2025 after doling out $3 billion in subsidies to EV buyers, whose incomes are already above average.

With the Carney government promising to restore the program, the problem is that subsidizing a product few Canadians want to buy in an attempt to reach an unrealistic government-imposed mandatory sales target, is a bad bet for taxpayers.

Surely the PM understands that.