OPINION: Canada’s huge bet on the EV battery industry demands a jolt of reality – by Andrew Coyne (Globe and Mail – February 2, 2024)


When it comes to the green transition, let no one say the Trudeau government is unwilling to put other people’s money where its mouth is. Why, in just one sector, a sector of a sector really – making batteries for electric vehicles – the government has put $44-billion at risk: one of the “big bets” on Canada’s industrial future of which it likes to boast.

In fact, that $44-billion (I’m using the Parliamentary Budget Officer’s figures here, rather than the official estimate of $38-billion) is for just three factories: $14.4-billion to persuade Volkswagen to make batteries in St. Thomas, Ont., $16-billion to induce Stellantis (the former Fiat Chrysler and Peugeot SA) to open a plant in Windsor, and $7.3-billion to lure Swedish battery maker Northvolt into suburban Montreal. (The remainder, on the PBO’s calculations, is the revenue cost of exempting these subsidies from the usual tax.)

Given total projected employment at the plants of 8,500, that works out to more than $5-million a job. Granted, that’s over 10 years – governments are ponying up “only” $5-billion in construction support, with the rest going to production subsidies – and “only” $27-billion of that is federal money (the other third is from the Ontario and Quebec governments). Still, that’s quite the bet.

Even that figure understates matters significantly. Since all of that money will be borrowed, interest costs should also be included. The PBO estimates these at $6.6-billion. All told, that’s $50-billion of other people’s money. For three factories.

For the rest of this column: https://www.theglobeandmail.com/opinion/article-canadas-huge-bet-on-the-ev-battery-industry-demands-a-jolt-of-reality/