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Of all top-heavy Liberal climate policies, electric-vehicles mandate is the worst

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From the MacDonald Laurier Institute

By Heather Exner-Pirot

“History has shown us time and again that government quotas are no match for the market.”

To meet Canada’s commitment to its Paris Agreement climate goals, the federal government has announced increasingly heavy-handed emissions reduction policies this year. It culminated Monday in the publication of regulated targets for electric-vehicle sales: an EV mandate.

History has shown us time and again that government quotas are no match for the market. The Liberals want to show us one more time why this is the case.

There is absolutely nothing wrong with EVs. Those who own them tend to love them. The car manufacturing industry is all-in on EVs, and globally has committed US$1.2-trillion toward electrification.

The problem is in the attempt to dictate, by government fiat, what consumers can or cannot buy. In the case of the EV mandate, the federal government is using dealers to enforce their strategy. One hundred per cent of light duty vehicles sold in Canada by 2035 must be EVs, with mandatory sales targets starting at 20 per cent in 2026.

If a dealer falls under the prescribed target for a particular year, they are required to buy expensive credits or pay for public charging stations to atone for their sin. The most likely response will be to sell fewer gas-fuelled vehicles than demand would indicate in order to meet the required ratios and avoid the penalties.

You don’t have to be an economist to predict the outcome: waiting lists, shortages and a black market for internal combustion engines. But it’s worth being specific about why a federal EV mandate can’t overcome the laws of supply and demand.

The first is the cost of EVs: They are more expensive than internal combustions engines. EV adoption is overwhelmingly led by urban, high-income consumers who can charge at home. Aside from nudging auto manufacturers to build charging stations, whose uptake is questionable, the mandate addresses none of the logistical and financial constraints that apartment dwellers, renters and low-income car owners face in owning an EV.

The federal government has pointed to Norway, where almost 90 per cent of new car sales are EVs, as an example of how these challenges can be overcome. But that country’s EV uptake is driven by a hefty subsidy, more than triple the Canadian amount, at about $16,000 a vehicle (and made possible by the revenues from their oil and gas exports). That’s the equivalent of a $700 a tonne carbon tax, and last year it represented 2 per cent of their national budget. I can think of no more expensive way to reduce emissions.

The second problem with the EV mandate is that the dealers don’t control the electricity grid. In parallel with the mandate, the federal government is also pushing Clean Electricity Regulations, which will severely strain utilities’ ability to meet additional demand. And it’s not just capacity that matters – it’s the ability to distribute additional power into millions of homes. In many neighbourhoods and small towns, that distribution capacity does not exist, and it will be very expensive to add.

The third is range in rural and remote areas. The federal government acknowledges that lack of charging infrastructure and battery performance in cold weather is an issue. But they just assume that it will be worked out over time – no need to worry about it now.

Fourth is the ability of manufacturers to ramp up their production to meet EV mandates and incentives across the Western world. This will depend on a supply chain that does not yet exist, from critical minerals, to mechanics, to electricians. And it will depend on greater profitability in the sector, which, outside of China, is mostly selling EVs at a loss.

No amount of regulation from Ottawa can solve all of these problems. There are some that see the EV mandate as a Hail Mary from a government that is unlikely to win re-election. The mandate, therefore, is a foolish but benign distraction.

But for refiners, whose profitability depends on some level of gasoline demand, it causes tremendous uncertainty. As long as the EV mandate hangs over their heads, they will be unlikely to invest in upgrading their existing assets, even to produce clean fuels (as mandated this year under the Clean Fuel Regulations, but which EVs would not use), and they will be very reluctant to invest in new refineries.

With our fast growing population, this will inevitably squeeze the availability of the many refined products and distillates the Canadian economy still needs. There is a cost to these policies, even when unimplemented.

The series of climate policies the Liberals have imposed since Steven Guilbeault was appointed Minister of Environment have mostly applied to industry. But the EV mandate targets consumers, limiting what they can and cannot buy when it comes to their vehicle.

Alas, consumers are voters. And command economies don’t work well in democracies.

Heather Exner-Pirot is director of energy, natural resources and environment at the Macdonald-Laurier Institute.

Automotive

The high price of green virtue

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Macdonald-Laurier Institute

By Jerome Gessaroli for Inside Policy

Reducing transportation emissions is a worthy goal, but policy must be guided by evidence, not ideology.

In the next few years, the average new vehicle in British Columbia could reach $80,000, not because of inflation, but largely because of provincial and federal climate policy. By forcing zero-emission-vehicle (ZEV) targets faster than the market can afford, both governments risk turning climate ambition into an affordability crisis.

EVs are part of the solution, but mandates that outpace market acceptance risk creating real-world challenges, ranging from cold-weather travel to sparse rural charging to the cost and inconvenience for drivers without home charging. As Victoria and Ottawa review their ZEV policies, the goal is to match ambition with evidence.

Introduced in 2019, BC’s mandate was meant to accelerate electrification and cut emissions from light-duty vehicles. In 2023, however, it became far more stringent, setting the most aggressive ZEV targets in North America. What began as a plan to boost ZEV adoption has now become policy orthodoxy. By 2030, automakers must ensure that 90 per cent of new light-duty vehicles sold in BC are zero-emission, regardless of what consumers want or can afford. The evidence suggests this approach is out of step with market realities.

The province isn’t alone in pursuing EV mandates, but its pace is unmatched. British Columbia, Quebec, and the federal government are the only ones in Canada with such rules. BC’s targets rise much faster than California’s, the jurisdiction that usually sets the bar on green-vehicle policy, though all have the same goal of making every new vehicle zero-emission by 2035.

According to Canadian Black Book, 2025 model EVs are about $17,800 more expensive than gas-powered vehicles. However, ever since Ottawa and BC removed EV purchase incentives, sales have fallen and have not yet recovered. Actual demand in BC sits near 16 per cent of new vehicle sales, well below the 26 per cent mandate for 2026. To close that gap, automakers may have to pay steep penalties or cut back on gas-vehicle sales to meet government goals.

The mandate also allows domestic automakers to meet their targets by purchasing credits from companies, such as Tesla, which hold surplus credits, transferring millions of dollars out of the country simply to comply with provincial rules. But even that workaround is not sustainable. As both federal and provincial mandates tighten, credit supplies will shrink and costs will rise, leaving automakers more likely to limit gas-vehicle sales.

It may be climate policy in intent, but in reality, it acts like a luxury tax on mobility. Higher new-vehicle prices are pushing consumers toward used cars, inflating second-hand prices, and keeping older, higher-emitting vehicles on the road longer. Lower-income and rural households are hit hardest, a perverse outcome for a policy meant to reduce emissions.

Infrastructure is another obstacle. Charging-station expansion and grid upgrades remain far behind what is needed to support mass electrification. Estimates suggest powering BC’s future EV fleet alone could require the electricity output of almost two additional Site C dams by 2040. In rural and northern regions, where distances are long and winters are harsh, drivers are understandably reluctant to switch. Beyond infrastructure, changing market and policy conditions now pose additional risks to Canada’s EV goals.

Major automakers have delayed or cancelled new EV models and battery-plant investments. The United States has scaled back or reversed federal and state EV targets and reoriented subsidies toward domestic manufacturing. These shifts are likely to slow EV model availability and investment across North America, pushing both British Columbia and Ottawa to reconsider how realistic their own targets are in more challenging market conditions.

Meanwhile, many Canadians are feeling the strain of record living costs. Recent polling by Abacus Data and  Ipsos shows that most Canadians view rising living costs as the country’s most pressing challenge, with many saying the situation is worsening. In that climate, pressing ahead with aggressive mandates despite affordability concerns appears driven more by green ideology than by evidence. Consumers are not rejecting EVs. They are rejecting unrealistic timelines and unaffordable expectations.

Reducing transportation emissions is a worthy goal, but policy must be guided by evidence, not ideology. When targets become detached from real-world conditions, ideology replaces judgment. Pushing too hard risks backlash that can undo the very progress we are trying to achieve.

Neither British Columbia nor the federal government needs to abandon its clean-transportation objectives, but both need to adjust them. That means setting targets that match realistic adoption rates, as EVs become more affordable and capable, and allowing more flexible compliance based on emissions reductions rather than vehicle type. In simple terms, the goal should be cutting emissions, not forcing people to buy a specific type of car. These steps would align ambition with reality and ensure that environmental progress strengthens, rather than undermines, public trust.

With both Ottawa and Victoria reviewing their EV mandates, their next moves will show whether Canadian climate policy is driven by evidence or by ideology. Adjusting targets to reflect real-world affordability and adoption rates would signal pragmatism and strengthen public trust in the country’s clean-energy transition.


Jerome Gessaroli is a senior fellow at the Macdonald-Laurier Institute and leads the Sound Economic Policy Project at the BC Institute of British Columbia

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Automotive

Elon Musk Poised To Become World’s First Trillionaire After Shareholder Vote

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From the Daily Caller News Foundation

By Mariane Angela

Tesla shareholders voted Thursday to approve an enormous compensation package that could make Elon Musk the world’s first trillionaire.

At Tesla’s Austin headquarters, investors backed Musk’s 12-step plan that ties his potential trillion-dollar payout to a series of aggressive financial and operational milestones, including raising the company’s valuation from roughly $1.4 trillion to $8.5 trillion and selling one million humanoid robots within a decade. Musk hailed the outcome as a turning point for Tesla’s future.

“What we’re about to embark upon is not merely a new chapter of the future of Tesla but a whole new book,” Musk said, as The New York Times reported.

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The decision cements investor confidence in Musk’s “moonshot” management style and reinforces the belief that Tesla’s success depends heavily on its founder and his leadership.

“Those who claim the plan is ‘too large’ ignore the scale of ambition that has historically defined Tesla’s trajectory,” the Florida State Board of Administration said in a securities filing describing why it voted for Mr. Musk’s pay plan. “A company that went from near bankruptcy to global leadership in E.V.s and clean energy under similar frameworks has earned the right to use incentive models that reward moonshot performance.”

Investors like Ark Invest CEO Cathie Wood defended Tesla’s decision, saying the plan aligns shareholder rewards with company performance.

“I do not understand why investors are voting against Elon’s pay package when they and their clients would benefit enormously if he and his incredible team meet such high goals,” Wood wrote on X.

Norway’s sovereign wealth fund, Norges Bank Investment Management — one of Tesla’s largest shareholders — broke ranks, however, and voted against the pay plan, saying that the package was excessive.

“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk,” the firm said.

The vote comes months after Musk wrapped up his short-lived government role under President Donald Trump. In February, Musk and his Department of Government Efficiency (DOGE) team sparked a firestorm when they announced plans to eliminate the U.S. Agency for International Development, drawing backlash from Democrats and prompting protests targeting Musk and his companies, including Tesla.

Back in May, Musk announced that his “scheduled time” leading DOGE had ended.

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