Automotive
Federal government EV mandates destined to fail
From the Fraser Institute
By Julio Mejía, Elmira Aliakbari, and Jason Clemens
According to reports, the Trudeau government will soon unveil regulations meant to phaseout the sale of new internal combustion vehicles and compel Canadians to buy zero-emission vehicles. The Biden administration is also mandating a similar shift. But these initiatives overlook two realities—consumer preferences are not easily swayed by top-down government directives, and the unrealistic timeline for minerals crucial for electric vehicles (EV) raises serious doubts about the likelihood of success.
Specifically, according to the Trudeau government’s new regulations, all new passenger vehicles and light trucks sold in Canada must be electric zero-emission vehicles by 2035, with interim targets of 20 per cent by 2026 and 60 per cent by 2030. And the Biden administration has mandated that two-thirds of new vehicles sold in the United States must be electric by 2032.
And yet, despite multibillion-dollar subsidies and governmental efforts to promote EV adoption, consumers are not embracing them. In Canada, only 6.5 per cent (98,589) of the 1.5 million new vehicles sold in 2022 were electric, according to Statistics Canada. Achieving the Trudeau government’s 2026 target would require a rapid increase in EV sales to more than 300,000 in coming years and more than 900,000 in 2030 (assuming no change in total vehicle sales). Such rapid growth in a short timeframe is at best questionable.
South of the border, data from the U.S. Department of Energy indicates that, out of 283.5 million registered vehicles in 2022, EVs comprised a mere 0.9 per cent of total vehicle registrations. In response, automakers are making strategic business decisions. Ford, for example, is delaying the construction of $12 billion worth of EV production facilities, citing a lack of consumer demand. Similarly, General Motors is abandoning the goal of producing 400,000 EVs by mid-2024 due to lower-than-expected sales.
But even in the unlikely scenario of sudden shift in consumer preferences, production-side barriers loom large. For example, the extraction (i.e. mining) of lithium, nickel, manganese, cadmium, graphite, zinc and other rare-earth elements necessary for EVs requires a rapid and marked expansion.
According to a recent study, to meet international EV adoption mandates (including mandates in Canada and the U.S.) by 2030 the world would need 50 new lithium mines, 60 new nickel mines, 17 new cobalt mines, 50 new mines for cathode production, 40 new mines for anode materials, 90 new mines for battery cells, and 81 new mines for EV bodies and motors, for a total of 388 new mines worldwide. For context, in 2021 there were only 340 metal mines operating in Canada and the U.S.
And historically, the development of mining and refining facilities has been slow. Production timelines range from six to nine years for lithium and 13 to 18 years for nickel—two elements critical for EV batteries. The aggressive government timelines for EV adoption clash with historically sluggish metal and mineral production, raising the risk of EV manufacturers falling short of needed minerals.
Not only are consumers resistant to top-down regulations, but the ambitious short-term EV adoption mandates in Canada and the U.S. are on a collision course with the reality of metal and mineral production capacity. Simply put, it’s not at all clear that sufficient capacities will be available to produce enough EVs to achieve the mandates being imposed on Canadians and Americans, nor is it clear consumers in either country are willing to spend their own money to purchase them.
Authors:
Alberta
Premier Smith says Auto Insurance reforms may still result in a publicly owned system
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
Automotive
Bad ideology makes Canada’s EV investment a bad idea
It doesn’t bode well for our country that our economic security rests on tariff exceptions to be negotiated by Liberal politicians who have spent the majority of Trump’s public life calling him a “threat to liberal democracy” and his supporters racists and fascists. Their hostility doesn’t lend itself to fruitful diplomacy. In any event, Trump’s EV rollback and aggressive tariffs will spell disaster for the Canadian EV sector.
What does Donald Trump’s resounding win in the recent U.S. election mean for Canada? Unfortunately, there doesn’t seem to have been much thought about the answer to this question in Ottawa, because the vast majority of our political and pundit class expected his opponent to be victorious. Suddenly they’re all having to process this unwelcome intrusion of reality into their narrow mental picture.
Well, what does it mean?
It is early days, and it will take some time to sift through the various policy commitments of the incoming Trump Administration to unpack the Canadian angle. But one thing we do know is that a Trump presidency will be no friend to the electric vehicle industry.
A Harris administration would have been. But, Trump spent much of his campaign slamming EV subsidies and mandates, pledging at the Republican National Convention in July that he will “end the electric vehicle mandate on day one.”
This line was so effective, especially in must-win Michigan, with its hundreds of thousands of autoworkers, that Kamala Harris was forced to assure everyone who listened that the U.S. has no EV mandate, and that she has no intention of introducing one.
Of course, this wasn’t strictly true.
First, the Biden Administration, of which Harris was a part, issued an Executive Order with the explicit goal of a “50% Electric Vehicle Sales Share” by 2030. The Biden-Harris Administration (to use their own formulation) instructed their Environmental Protection Agency (EPA) to introduce increasingly stringent tailpipe emission regulations on cars and light trucks with an eye towards pushing automakers to manufacture and sell more electric and hybrid vehicles.
Their EPA also issued a waiver which allows California to enact auto emissions regulations that are tougher than the federal government’s, which functions as a kind of back-door EV mandate nationally. After all, auto companies aren’t going to manufacture one set of vehicles for California, the most populous state, and another for the rest of the country.
And as for intentions, though the Harris camp consistently held that her prior policy positions shouldn’t be held against her, it’s hard to forget that as senator she’d co-sponsored the Zero-Emission Vehicles Act, which would have mandated that all new vehicles sold in the U.S. be “zero emission” by 2040. During her failed 2020 presidential campaign, Harris accelerated that proposed timeline, saying that the auto market should be all-electric by 2035.
In other words, she seemed pretty fond of the EV policies which Justin Trudeau and Steven Guilbeault have foisted upon Canada.
For Trump, all of these policies can be filed under “green new scam” climate policies, which stifle American resource development and endanger national prosperity. Now that he’s retaken the White House, it is expected that he will issue his own executive orders to the EPA, rescinding Biden’s tailpipe instructions and scrapping their waiver for California. And though he will be hindered somewhat by Congress, he’s likely to do everything in his power to roll back the EV subsidies contained in the (terribly named) Inflation Reduction Act and lobby for changes limiting which EVs qualify for tax credits, and how much.
All of this will be devastating for the EV industry, which is utterly reliant on the carrots and sticks of subsidies and mandates. And it’s particularly bad news for the Trudeau government (and Doug Ford’s government in Ontario), which have gone all-in on EVs, investing billions of taxpayer dollars to convince automakers to build their EVs and batteries here.
Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,” according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”
Canada’s EV subsidies were pitched as an “investment” in an evolving auto market, but that assumes that those pre-existing lines of trade will remain essentially unchanged. If American EV demand collapses, or significantly contracts without mandates or tax incentives, we’ll be up the river without a paddle.
And that will be true, even if the U.S. EV market proves more resilient than I expect it to. That is because of Trump’s commitment to “Making America Great Again” by boosting American manufacturing and the jobs it provides. He campaigned on a blanket tariff of 10 percent on all foreign imports, with no exceptions mentioned. This would have a massive impact on Canada, since the U.S. is our largest trading partner.
Though Justin Trudeau and Chrystia Freeland have been saying to everyone who will listen how excited they are to work with the Trump Administration again, and “Canada will be fine,” it doesn’t bode well for our country that our economic security rests on tariff exceptions to be negotiated by Liberal politicians who have spent the majority of Trump’s public life calling him a “threat to liberal democracy” and his supporters racists and fascists. Their hostility doesn’t lend itself to fruitful diplomacy.
In any event, Trump’s EV rollback and aggressive tariffs will spell disaster for the Canadian EV sector.
The optimism that existed under the Biden administration that Canada could significantly increase its export capacity to the USA is going down the drain. The hope that “Canada could reestablish its export sector as a key driver of growth by positioning itself as a leader in electric vehicle and battery manufacturing, along with other areas in cleantech,” in the words of an RBC report, is swiftly fading. It seems more likely now that Canada will be left holding the bag on a dying industry in which we’re invested heavily.
The Trudeau Liberals’ aggressive push, driven by ideology and not market forces, to force Electric Vehicles on everyone is already backfiring on the Canadian taxpayer. Pierre Poilievre must take note — EV mandates and subsidies are bad for our country, and as Trump has demonstrated, they’re not a winning policy. He should act accordingly.
-
Brownstone Institute2 days ago
The Most Devastating Report So Far
-
Business2 days ago
Carbon tax bureaucracy costs taxpayers $800 million
-
ESG1 day ago
Can’t afford Rent? Groceries for your kids? Trudeau says suck it up and pay the tax!
-
John Stossel1 day ago
Green Energy Needs Minerals, Yet America Blocks New Mines
-
Daily Caller1 day ago
Los Angeles Passes ‘Sanctuary City’ Ordinance In Wake Of Trump’s Deportation Plan
-
Alberta1 day ago
Province considering new Red Deer River reservoir east of Red Deer
-
Addictions1 day ago
BC Addictions Expert Questions Ties Between Safer Supply Advocates and For-Profit Companies
-
Aristotle Foundation1 day ago
Toronto cancels history, again: The irony and injustice of renaming Yonge-Dundas Square to Sankofa Square