GOLDSTEIN: Trudeau’s big bet on electric vehicles goes bust

Article content

Prime Minister Justin Trudeau posted a self-congratulatory video on X last year, boasting that his Liberal government “bet big on electric vehicles” and “now that industry is betting on us.”

The problem is that bet has come up snake eyes for Canadian taxpayers.

This as billions of dollars in federal and provincial government subsidies meant to entice Canadian drivers into buying expensive EVs and plug-in hybrids are coming to an end, while the Trudeau government continues to mandate that at least 20% of all new passenger cars sold in Canada must be EVs by next year, rising to 60% in 2030 and 100% in 2035.

As the subsidies dry up, EV sales will drop, the same way they went up when they were introduced, making these federal mandates increasingly unrealistic, the same way its greenhouse gas emission reduction targets are absurdly optimistic.

To add insult to injury, parliamentary budget officer Yves Giroux reported last year that EV prices need to drop by 31% to achieve the interim target of 60% sales in 2030, at the same time as their costs will go up because of the ending of subsidies.

It’s another example of how the Liberals’ illogical climate change policies — a house of cards built on sand with the tide coming in — are imploding and working against one another, much like the Liberal government itself in its final days.

The Trudeau government last week quietly announced that its Zero-Emission Vehicles (iZEV) Program handing out up to $5,000 in public money to motorists willing to buy EVs is being “paused” as previously planned — translation “ended”—  by March 31, or sooner if as expected, the money runs out before then.

These subsidies have been in place since 2019, costing taxpayers almost $3 billion to date.

The good news is that the majority of Canadians who can’t afford EVs will no longer be subsidizing those who do.

But the bad news is the $3 billion in subsidies is chump change compared to the $52.5 billion federal and provincial governments have showered on Canada’s fledgling EV industry in capital investments on 13 major projects, according to Giroux, $6.4 billion more than the $46.1 billion the EV industry is spending on itself.

The absurdity of this was predicted in a report by the fiscally conservative Fraser Institute in 2023 which calculated that the $5,000 federal subsidy to purchasers of EV vehicles cost $355 to reduce one tonne of Canada’s industrial greenhouse gas emissions.

Recommended video

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

Play Video

That’s more than four times the current federal carbon price of $80 per tonne, rising to $95 per tonne on April 1, on its way to $170 per tonne on April 1, 2030.

Toss in additional subsidies to EV buyers offered by provincial governments— many of which are now drying up because of their enormous costs — and the price to reduce one tonne of emissions soared to as high as $857, according to the study.

“By essentially paying people to buy electric vehicles, governments across Canada are spending a lot of money despite questionable benefits,” noted Jock Finlayson, co-author of the study, “A Review of Electric Vehicle Consumer Subsidies in Canada.”

Studies by the Macdonald-Laurier Institute in 2022 and the Montreal Economic Institute in 2017 came to similar conclusions.

“If the governments absolutely want to get to their (emissions) goals faster, the worst way of doing that is a subsidy to electric cars,” said Germain Belzile, a co-author of the MEI report. “It’s just a waste.”