EDITORIAL: EV industry huge gamble for taxpayers

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Someone should tell Prime Minister Justin Trudeau and Ontario Premier Doug Ford that creating a successful electric vehicle industry in Canada will require a lot more than throwing taxpayers’ money at it.

That’s the easy part, which Trudeau and Ford have been announcing over the past year, jointly bestowing mega-billions of dollars in public support for EV battery plants.

Parliamentary Budget Officer Yves Giroux has said it will take 20 years for the two governments to break even in recovering up to $28.2 billion in subsidies awarded to two companies — $15 billion to Stellantis-LG Energy Solutions to build a battery production plant in Windsor and $13.2 billion to Volkswagen to do the same in St. Thomas.

On Thursday, Trudeau and Ford announced another $5 billion deal in support of a $15-billion project by Honda to build another battery plant in Alliston, along with the construction of other facilities to create a supply chain for EVs.

They said it will create 1,000 jobs, secure 4,200 existing ones and lead to spinoff employment of more than 28,000 related jobs.

What they didn’t say is that creating an EV supply chain from scratch involves multiple massive projects that will have to be simultaneously developed and co-ordinated.

These include mining and transporting the raw materials for EV batteries to production facilities, manufacturing EV batteries, manufacturing EV vehicles, cathode and anode manufacturing, and EV battery recycling.

The good news is Canada, has an abundance of the metals, minerals and other raw materials needed to build EV batteries and compete with the global market leader, which is China.

But getting those raw materials out of the ground will require an unprecedented mining boom in ecologically sensitive parts of Canada, including Ontario’s Ring of Fire, with governments needing to dramatically streamline their existing environmental processes for getting mines and roads approved.

While some Indigenous groups favour these developments, others, who will have to be meaningfully consulted, are opposed.

The auto sector is vital to the Canadian economy so it’s hardly surprising Trudeau’s Liberals and Ford’s Progressive Conservatives are boasting about their support of it.

But we won’t know whether the multi-billion-dollar public investments they are making into Canada’s EV sector today will give taxpayers good value for money spent, until years down the road.