Automotive
Canada should heed Germany’s destructive climate policies
From the Fraser Institute
By Kenneth P. Green
Volkswagen may soon close three vehicle factories, cut 10,000 jobs and impose steep across-the-board pay reductions. Volkswagen has avoided involuntary layoffs for 30 years and hasn’t shuttered a factory in its home country in its 87-year history.
According to a recent report in the Wall Street Journal (WSJ), Germany’s climate policies—chasing after “net-zero” greenhouse gas emissions, aggressive electric vehicle sales mandates, and moving electricity production away from fossil fuels to renewable sources such as wind and solar—has imperiled Germany’s massive auto-sector, the central pillar of its economy.
Specifically, Volkswagen may soon close three vehicle factories, cut 10,000 jobs and impose steep across-the-board pay reductions. Volkswagen has avoided involuntary layoffs for 30 years and hasn’t shuttered a factory in its home country in its 87-year history.
While politicians in Germany blame this downturn to poor management of the company, the WSJ blames Germany’s climate policies, which are largely mimicked by Canada. “Germany’s auto industry is trapped in a vise between higher energy prices that drive up the cost of production, and electric-vehicle mandates that drive down sales.” Due to Germany’s intensive switch from coal and nuclear electricity production to renewables, electricity prices for large industrial users in Germany are well above the European Union average, and above prices in the United States, China and Japan.
Then there’s Germany’s electric vehicle (EV) mandates. As with Canada, Germany (under EU policy), requires that EVs constitute a higher share of vehicle sales each year, with internal-combustion engines phased out by 2035. The WSJ reports: “Stellantis has warned that it may also scale back car production to avoid running afoul of the Brussels EV mandate, and Ford is cutting several thousand jobs in Europe in its shift to EVs.” Germany’s climate policies are the “worst act of economic masochism in the West since the 1930s.” And it’s an act that Canada’s government seeks to emulate, with its own “net-zero” emission policies, clean electricity regulations and EV mandates.
Like Germany, Canada’s drive to “decarbonize” the electricity sector has led to higher prices for industrial users. For example, when Ontario decarbonized its electricity sector (by shuttering coal-fired power generation) from 2008 to 2016, Ontario’s residential electricity costs shot up by 71 per cent, far outpacing the 34 per cent average growth in electricity prices across Canada. The skyrocketing electricity rates also hit the province’s industrial sector. Between 2010 and 2016, large industrial users in Toronto and Ottawa experienced cost spikes of 53 per cent and 46 per cent, respectively, compared to 14 per cent (on average) for the rest of Canada. In 2016, large industrial users in Toronto paid almost three times more than consumers in Montreal and Calgary and almost twice the prices paid by large consumers in Vancouver.
And like Germany, Canada’s EV mandate is already showing painful signs of failure. As reported by CBC, back in April Ford announced that its EV unit lost US$1.3 billion in the first quarter of 2024 alone, selling only 10,000 vehicles in that period. Possibly a good thing, because Ford lost about US$132,000 for every EV it sold in the first three months of the year. Ford and General Motors, are cutting back on EV production, with Ford planning to cut its electric pickup production by half.
Germany’s self-inflicted harms from its great spasm of climate policy masochism, like Canada’s self-inflicted harms from its masochism mimicry, should prompt Canada’s politicians to take a deep breath and shift away from economically destructive climate policies such as net-zero and EV mandates.
Kenneth P. Green
Senior Fellow, Fraser Institute
Communicating better, faster, affordable auto insurance
Alberta’s government has launched a website, care-first.alberta.ca, on the province’s plans for improved, faster and less expensive auto insurance.
Over the next two years, Alberta’s auto insurance system will undergo substantial changes. To ensure Albertans have the information they need to understand the shift to the new Care-First system, Alberta’s government has launched a website to explain the changes and benefits.
The website focuses on explaining how the new auto insurance system will provide better medical and faster income support benefits. Under a care-focused system, those benefits will last through the full recovery period for Albertans injured in collisions. In addition, Albertans will have cost savings up to $400 per year under the new system.
“We’re ensuring Albertans will save money on their auto insurance when the new Care-First system is implemented, and we want to provide them with the information they need on how their benefits are going to be increased and delivered faster.”
“Chiropractors are a major component in helping accident victims get the best care and restore their quality of life. The Government of Alberta’s reforms to auto insurance help us provide better and faster chiropractic care to those who need it.”
Legislation to implement the changes will be introduced in the spring of 2025. If passed, industry partners would take the next two years to implement the changes, including developing 3.4 million new auto insurance policies.
Quick facts
- Alberta’s government will be implementing the first privately delivered Care-First model in Canada.
- The Care-First auto insurance system will be in place by January 2027.
Related information
Better, faster, more affordable auto insurance
Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.
After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.
Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.
“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”
“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”
Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.
Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.
Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.
In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.
Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.
By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.
“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”
Quick facts
- Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
- A 2023 report by MNP shows
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