5 year payback estimate for EV battery-maker subsidies off by 15 years! – PBO

Ottawa’s super-charged EV obsession reaches new heights

Every week, it seems, we get another report revealing the deep thoughtlessness and fiscal recklessness of Ottawa’s electric car and electric-car battery fixation. For example, the Parliamentary Budget Officer recently asked how long it will take for the federal government to see a return on the $28.2 billion of production subsidies to EV battery-makers Stellantis and Volkswagen. The answer—about four times longer than government originally claimed.

Remember, Prime Minister Trudeau said the “full economic impact of the project will be equal to the value of government investment in less than five years.” But according to the PBO, it will take 20 years, not five years, to merely recover the money the government “invested” on behalf of Canadians. There’s no actual profit to be had at that point.

Why the discrepancy?

To figure that out, the PBO looked into the government’s modelling used to generate its “five-year” payback scenario and found that the government’s estimate included numerous assumptions about other investments (and assumed production increases) outside the direct battery-making process including assumed capability in battery-material production, which is shorthand for mining and refining of critical metals and minerals needed to make EV batteries. Of course, this is a notoriously uncertain proposition given Canada’s dismal performance in bringing new mining-related infrastructure projects with EV-battery potential to fruition.

In fact, as the PBO notes, of the total “investment package” government modelled in calculating its “payback” date, only 8.6 per cent was directly related to battery production at the Volkswagen plant. More than 90 per cent was based on assumptions about developments outside of the subsidized battery-makers purview or control.

By contract, the PBO’s modelling of the investment cost-recovery focused only on “government revenues generated by cell and module manufacturing, upon which the production subsidies are based.” And unlike the government’s analysis, the PBO analysis starts when production is actually expected to begin at the new battery plants, which is not until sometime next year.

And yet, the PBO analysis remains quite generous as it excluded “public debt charges that would be incurred to finance the production subsidies” and simply accepted estimates of production capability by Stellantis and Volkswagen.

Clearly, the Trudeau government’s EV crusade is textbook bad public policy where the government attempts to pick winners and losers in the economy, in this case dependent on fanciful scenarios of future developments in global markets far outside Canada’s control. The crusade is also out of step with developments in the largest likely market for Canadian EVs and EV products—the United States, where car buyers are increasingly rejecting EVs despite heavy subsidies and massive government spending initiatives to promote EV manufacturing.

Governments in North America have been trying to push EVs over internal combustion vehicles for 30 years now, and it has not worked. EVs have consistently failed to compete with combustion vehicles on performance and cost, and failed to win broad consumer support despite oceans of government subsidies for manufacturers and buyers alike. It’s long past time for government to take off its rose-coloured glasses on the EV transition. There are better uses for government’s time and money. Getting people’s food and housing costs down, for example, might be a good place to start.

Author:

Kenneth P. Green

Senior Fellow, Fraser Institute

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Trudeau government wants to give CBC more money

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Why living in Canada has become impossible

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Trudeau government wants to give CBC more money

Published on December 30, 2024

Todayville

From the Canadian Taxpayers Association

By Kris Sims

The CBC used to air The Simpsons after school.

One of the best episodes was the Cape Fear homage where an FBI agent is trying to change Homer’s last name to Thompson.

After hours of explanation, the kids have fallen asleep, Marge has given up and the agent says, “When I step on your foot and say: ‘Hello Mr. Thompson,’ you nod your head! Got it?!”

Homer did not get it.

The Liberal members of Parliament on the heritage committee still don’t get it either.

The committee has sent a report to the House of Commons urging the government to give the CBC even more money.

“That the Government of Canada provide a substantial and lasting increase in the parliamentary appropriations for CBC/Radio-Canada, allowing it to eliminate its paid subscription services and gradually end its reliance on commercial advertising revenues,” reads the report.

Really? More money? The CBC already takes $1.4 billion year from taxpayers. And that’s not enough?

That amount of money could already cover the salaries of about 7,000 police officers and 7,000 paramedics.

If Trudeau’s MPs want to give the CBC more money so that it can get rid of its advertising and subscription funding, that means a huge cost for taxpayers.

According it’s latest annual report, the CBC collected about $493 million in revenue other than government funding in 2023-24, the bulk being subscription fees and advertising.

This means these Trudeau government MPs want taxpayers to fund the CBC to the tune of about $2 billion per year.

This is the opposite of what needs to happen.

The CBC should be defunded for three key reasons.

The CBC is a huge waste of money, nearly nobody is watching it and journalists should not be paid by the government.

The committee knows this.

And we know they know because the Canadian Taxpayers Federation told them to their faces in testimony before the committee.

CBC CEO Catherine Tait repeatedly testified at the committee and each time she inadvertently made a stronger case to defund the CBC, due to her entitlement and lack of accountability.

Tait refused to say if she will take a severance when she leaves the CBC next year, claiming it’s a personal matter.

It’s not personal if it’s taxpayers’ money.

Documents obtained by the Canadian Taxpayers Federation show Tait is paid between $460,000 and $551,000 this year, with a bonus of up to 28 per cent.

That’s a bonus of up to $154,448. That’s more than the average Canadian family earns in a year.

Just before Christmas last year, Tait cried broke to the committee and afterwards the CBC announced lay offs in its newsrooms.

Documents obtained by the CTF show the CBC handed out big bonuses that year anyway, costing taxpayers $18 million.

As the CBC fan group Friends of Canadian Media put it: “This decision is deeply out of touch and unbefitting of our national public broadcaster.”

It gets worse because the state broadcaster isn’t even doing a good job.

According to the CBC’s latest quarterly report, CBC News Network’s national audience share is 1.7 per cent.

Documents obtained by the CTF show the CBC’s supper hour newscast drawing microscopic audiences, with 0.7 per cent of Toronto watching the six o’clock news on CBC.

Journalists should not be paid by the government because it’s an obvious conflict of interest.

You can’t hold the powerful government to account if you’re counting on that government for your paycheque.

Such government funding of media has contributed to the rapid erosion of trust in the news media, with 61 per cent of Canadians saying they think journalists are “purposely trying to mislead people by saying things they know are false or gross exaggerations.”

CBC’s entertainment programming barely fares better. The Murdoch Mysteries, which is not produced by the CBC, pulls in its biggest audience with about 1.9 per cent of the population watching.

The politicians on the committee know all of this, and yet, like Homer Simpson, they are not getting the message.

If the CBC needs money, it should earn that money itself.

Taxpayers can’t afford the state broadcast’s bill now, let alone hundreds of millions more.

It’s time to defund the CBC.

Kris Sims is the Alberta Director for the Canadian Taxpayers Federation and a former member of the Parliamentary Press Gallery.