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.
Automotive
Trudeau must repeal the EV mandate
Last Monday, Transport Canada released a bombshell statement, announcing that the Trudeau government’s program granting a $5,000 rebate to Canadians purchasing an Electric Vehicle (EV) had run out of money and would be discontinued, “effective immediately.” This followed a prior announcement from the government of Quebec that they would be suspending their own subsidy, which had amounted to $7,000 per EV purchased.
This is, of course, a game changer for an industry which the Trudeau government (as well as the Ford government in Ontario) has invested billions of taxpayer dollars in. That’s because, no matter the country, the EV industry is utterly dependent upon a system of carrots and sticks from the government, in the form of subsidies and mandates.
EVs have remained notably more expensive than traditional Internal Combustion Engine (ICE) vehicles, even with those government incentive programs. Without them the purchase of EVs becomes impossible for all but the wealthiest Canadians.
Which is fine. Let the rich people have their toys, if they want them. Though if they justify the expense by saying that they’re saving the planet by it, I may be tempted to deflate them a bit by pointing out that EVs are in no way appreciably better for the environment than ICE vehicles, how all the lithium, nickel, cobalt, manganese, aluminum, copper, etc, contained in just one single EV battery requires displacing about 500,000 lbs of earth. Mining these materials often takes place in poorer countries with substandard environmental regulations.
Moreover, the weight of those batteries means that EVs burn through tires more quickly than gas-and-diesel driven vehicles, and wear down roads faster as well, which among other issues leads to an increase in particulate matter in the air, what in the old days we referred to as “pollution.”
That is a potential issue, but one that is mitigated by the fact that EVs make up a small minority of cars on the road. Regular people have proved unwilling to drive them, and that will be even more true now that the consumer subsidies have disappeared.
Of course, it will be an issue if the Trudeau Liberals get their way. You see, Electric Vehicles are one of the main arenas in their ongoing battle with reality. And so even with the end of their consumer subsidies, they remain committed to their mandates requiring every new vehicle purchased in Canada to be electric by 2035, now just a decade away!
They’ve done away with the carrots, and they’re hoping to keep this plan moving with sticks alone.
This is, in a word, madness.
As I’ve said before, the Electric Vehicle mandate is a terrible policy, and one which should be repealed immediately. Canada is about the worst place to attempt this particular experiment with social engineering. It is famously cold, and EVs are famously bad in the cold, charging much slower in frigid temperatures and struggling to hold a charge. Which itself is a major issue, because our country is also enormous and spread out, meaning that most Canadians have to do a great deal of driving to get from “Point A” to “Point B.”
Canada is sorely lacking in the infrastructure which would be required to keep EVs on the road. We currently have less than 30,000 public charging stations nationwide, which is more than 400,000 short of Natural Resources Canada’s projection of what we will need to support the mandated total EV transition.
Our electrical grid is already stressed, without the addition of tens of millions of battery powered vehicles being plugged in every night over a very short time. And of course, irony of ironies, this transition is supposed to take place while our activist government is pushing us on to less reliable energy sources, like wind and solar!
Plus, as I’ve pointed out before, the economic case for EVs, such as it was, has been completely upended by the recent U.S. election. Donald Trump’s victory means that our neighbors to the south are in no immediate danger of being forced to ditch gas-and-diesel driven cars. Consequently, the pitch by the Trudeau and Ford governments that Canada was putting itself at the center of an evolving auto market has fallen flat. In reality, they’ve shackled us to a corpse.
So on behalf of my fellow Canadians I say, “Thank you,” to the government for no longer burning our tax dollars on this particular subsidy. But that isn’t even half the battle. It must be followed through with an even bigger next step.
They must repeal the EV mandate.
Dan McTeague is President of Canadians for Affordable Energy.
Automotive
Liberals Have Cut Canada’s Electric Vehicle Subsidies, Now It’s Time to Kill the 2035 Mandate
Former Liberal MP Dan McTeague calls on Mark Carney and all other leadership candidates to kill Trudeau’s electric car mandate.
President of Canadians for Affordable Energy (CAE) and former Liberal MP Dan McTeague says, “It’s good that the Trudeau government are ending their taxpayer funded electric vehicle subsidy, but it’s time to take the most important step of all and kill the government’s mandate that all vehicles bought in Canada be battery powered by 2035.”
As of January 10th, Transport Canada announced that it “paused” its financial incentive to purchase electric vehicles which had provided up to $5,000 of taxpayers money to anyone who purchases an electric vehicle. Quebec ended its $7,000 subsidy last February. However, the government policy requiring that every car sold in Canada after 2035 be electric remains in force.
“Even with these giveaways in place, it was a stretch for hard working Canadians to afford an EV,” said McTeague. “We at CAE are happy for Canadian taxpayers that the program is coming to an end. But this move must be followed up by abolishing the mandates on unaffordable electric vehicles once and for all.”
“My hope is that each and every Liberal Leadership candidate stands up and acknowledges that mandating that all new cars in Canada be electric by 2035 is wrong and that that policy needs to be scrapped,” added McTeague.
Dan McTeague served in Parliament as a Liberal MP for 18 years, and is now Executive Director of Canadians for Affordable Energy. CAE counts on it’s 60,000 supporters nationwide, you can find more information here: https://www.affordableenergy.ca/
For more information contact:
Dan McTeague
647-220-0114
[email protected]
Support Dan’s Work to Keep Canadian Energy Affordable!
Canadians for Affordable Energy is run by Dan McTeague, former MP and founder of Gas Wizard. We stand up and fight for more affordable energy.
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