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Automotive

The government’s zero-emission vehicles mandate is an arrogant, unnecessary gamble

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From the MacDonald Laurier Institute

By Jerome Gessaroli

This poor policy will disproportionately hurt middle- and working-class Canadians.

In December 2023, Steven Guilbeault, the federal minister of environment and climate change, announced that all new auto sales in Canada must be zero-emission vehicles by 2035. The Liberal government’s mandate to restructure the auto sector is industrial policy on a massive scale. Whether one agrees or disagrees with the mandate, there is general consensus on the substantial nature of this government intervention.

Many people write about whether wholesale government mandates will benefit or harm Canadians. Pundits of all stripes invoke their favoured political and economic ideologies (whether it is capitalism, command socialism, dirigisme, or economic nationalism) when discussing the government’s actions. When evaluating the efficacy of these government mandates, I will refrain from using polarizing labels and instead apply a first principles approach to assess how successful products, markets and entire industries are created.

To illustrate this approach, I reference a classic essay written in 1958 by Leonard E. Read, “I, Pencil.” In this essay, Read questions whether anyone truly knows how to produce a pencil from scratch, a simple commodity that has been mass-produced for over 300 years.

Read describes a pencil’s components, including wood, lacquer, graphite, a bit of metal, an eraser, and labelling. He delves into the intricacies of each element needed for pencil production. For instance, harvesting wood involves using saws, trucks, railcars, radios, and other equipment. The extensive skills, knowledge, and capital needed to design and manufacture this equipment are immense. Motors, railcars, trucks, and radios all require mining and refining ores, engineering design, manufacturing, distribution, and deployment, just so loggers can do their job.

After the wood arrives at the sawmill, it is cut, machined, and dried. The equipment and expertise needed for this second step are too long to list. Power for the mill and kiln, generated by a hydroelectric dam and transmitted through power lines, requires its own design, construction, and operation—a testament to human ingenuity.

The pencil’s graphite must be mined and imported. Transforming raw graphite into the final pencil material involves mixing it with various compounds at the mine site, moulding, cutting, multiple drying rounds, and quality checks. The graphite then travels to the pencil plant, where it undergoes further mixing, moulding, and cutting and is then placed inside the pencil. Chemists, manufacturing engineers, production workers, millwrights, and truck drivers, not to mention the specialized equipment for graphite manufacturing, all play crucial roles in this intricate process.

The pencil lacquer, made up of various compounds, is applied to the wood, and then the pencil runs through a specialized machine multiple times to get the desired finish. Inputs, including the chemical process, labour, and co-ordination for this procedure are too lengthy to detail. The aluminium band around the pencil serves to secure the eraser.

The eraser must be abrasive enough to remove the graphite from the paper without damaging the paper itself. Over time, chemists have changed the eraser’s composition, using their knowledge of polymers and other chemicals. The intricate production of a simple pencil requires diverse material inputs from various sectors and production processes, all of which must be cost-efficient to keep the pencil’s cost very low.

The collective knowledge, capital, and materials needed to produce a pencil are dispersed among millions of individuals and companies throughout society. No single person, even the CEO of a pencil company, possesses anything but a tiny fraction of the knowledge needed to make a pencil.

Despite this diffusion, spontaneous order emerges, driven by individuals pursuing their own interests, needs, and wants. As Read argues, those involved in the pencil’s production from miners, loggers, and engineers to CEOs, perform their tasks not because they desire a pencil but for other motivations. Instead, each participant exchanges their specific ability for the goods and services they need, with the pencil potentially being one of many items in this exchange.

Creating a zero-emission vehicle sector is vastly more complicated than a pencil. Given this complexity, the feasibility of any single entity, including the government, to successfully direct an auto sector restructuring is doubtful. Sustainably producing zero-emission vehicles instead will require decisions, capital, and resources dispersed throughout society that spontaneously arrange themselves in a manner that responds to the demand for such vehicles.

The federal government has assured Canadians that they will help with this transition, primarily through government subsidies to consumers and businesses. Money is given to subsidize zero-emission vehicle purchases to make them a bit less costly.

A total of $43 billion will be provided by the federal, Ontario and Quebec governments in subsidies for three battery plants, enabling the companies to manufacture batteries profitability. As well, funding is provided for 42,000 electric chargers, which are in addition to the 40 percent of existing chargers that the government has already subsidized to help keep drivers’ vehicles on the road.

The federal government cannot be certain its decisions are correct. It might be better to not subsidize battery plants and instead relax restrictions on supply chain development. This would involve ensuring the supply of critical minerals, chemicals, electrode production, transportation services, testing equipment, recycling, and more.

The government’s approach bypasses the price system and diverts money from its best use. The subsidies are artificial. While companies may initially react to these subsidies, their response is contingent upon the government’s continued support.

Without the millions of people making individual decisions that are spontaneously organized through the price system to create a sustainable zero-emission car market, the federal government’s mandate will likely fail.

It is the height of hubris to assume that the government can restructure the auto industry in such a fundamental way. More likely, the massive subsidies will financially burden Canadians for many years, leading to a disarray of misallocated resources that will take years to correct. Indeed, the Parliamentary Budget Office estimates that the debt charges for the federal and participating provincial governments subsidizing battery manufacturing will increase the total cost by $6.6 billion over 10 years.

This poor policy will disproportionately hurt middle- and working-class Canadians, through lower employment and higher taxes that would otherwise be unnecessary.

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

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Automotive

Canadians rejecting Liberal’s EV mandates because consumers are rational

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From Resource Works

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Bad policy, not misinformation, is to blame for the decline in EV sales

It was a clever move for federal minister Gregor Robertson to stand in Victoria and blame the oil and auto industries for spreading “misinformation” about electric vehicles.

If people don’t follow a government order, then someone else must have lied to them.

But the truth is simpler, and more uncomfortable for Ottawa and Victoria: Canadians are against aggressive EV mandates because the policies behind them are not based on reality.

Politicians have been pushing electric vehicles (EVs) as a cornerstone of the fight against climate change for years, promising a cleaner future through ambitious mandates and generous rebates.

All of this effort looked good on paper:  passing laws, handing out thousands (millions, billions) in subsidies, paving the way for Canada’s transition to an electric future.

But, in real life, it’s just not working out this way.

Why?  Because instead of crafting long-term rules based on the realities of infrastructure, cost, and consumer choice, Ottawa rushed ahead with policies that ignored market signals.

They assumed subsidies would keep EV sales flowing indefinitely, only to be shocked when sales plummeted once the rebates dried up.

Canadians are responding rationally to high prices, unreliable charging networks, and impractical mandates.

Not long ago, Ottawa set ambitious, unattainable targets: 20 percent zero-emission vehicle sales by 2026, 60 percent by 2030, and 100 percent by 2035.

British Columbia went further, aiming for 26 percent by 2026, 90 percent by 2030, and 100 percent by 2035.

In theory, it looked achievable. In practice, it’s been a wake-up call.

The numbers tell the story. Statistics Canada reported that EVs accounted for 18.29 percent of new vehicle sales in December 2024. Just four months later, when Ottawa’s iZEV program ran out of funds and provincial rebates ended, that figure crashed to 7.53 percent.

In British Columbia, once a leader in EV adoption, the market share dropped from nearly 25 percent in mid-2024 to 15 percent a year later.

Quebec, long the most EV-friendly province, saw a similar decline when its $7,000 subsidy was slashed nearly in half.

Why? Canadians have been very clear.

Cost is the biggest barrier, according to polls like this one from Ipsos in 2025. But this isn’t the only issue.

Ipsos found 56 percent of British Columbians oppose EV mandates, with even higher resistance among older households and those outside Metro Vancouver. People resent being told they must buy expensive cars they can’t easily charge or fully trust in harsh winters.

Subsidies made high sticker prices tolerable for middle-class families, but when the rebates vanished while mandates and fines remained, buyers walked away.

Barry Penner of the Energy Futures Institute put it bluntly: governments “put the cart before the horse,” demanding widespread adoption before ensuring affordability or infrastructure.

The financial penalties for automakers are steep. Missing federal targets by 10 percent could mean hundreds of millions in fines.

In British Columbia, dealers face $20,000 penalties for every gas-powered car sold over the mandated ratio. Those who can’t comply often buy credits—frequently from Tesla, a California-based company that benefits while Canadian businesses foot the bill. These rules aren’t just hitting “Big Oil”; they’re straining local dealers and sending money abroad.

Infrastructure is another glaring issue. Ottawa estimates Canada has 33,700 chargers today but needs 679,000 by 2040—an average of 40,000 new chargers annually for 15 years, a pace experts call unrealistic.

In British Columbia, Penner notes the province has just 5,000 chargers now and needs 40,000 more by 2030. Meeting the 2035 mandate would also require electricity equivalent to two additional Site C dams, even as B.C. relies on 20 to 25 percent of its power from external sources, often fossil fuels.

Canadians aren’t against cleaner technology—they’re against being forced into choices that don’t fit their lives. The frustration stems from policies that feel disconnected from the realities of cost, convenience, and infrastructure. More blame or moralizing won’t fix this.

Penner has urged governments to “take our foot off the gas and realign our policies with reality.”

That could mean reinstating rebates if mandates persist, investing heavily in charging networks, or setting broader emissions targets that give consumers real choices instead of rigid quotas.

The EV dream will keep stalling unless that happens. It’s not because Canadians don’t know what’s going on; it’s because governments made decisions based on wishful thinking.

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Agriculture

Canola or cars? Canada can’t save both

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This article supplied by Troy Media.

Troy Media By

Canada is risking its most successful export to prop up an EV pipe dream

Picture a Canadian industry that contributes $43 billion to the economy and employs about 200,000 people.

There aren’t many of those in this country. Any industry of that size should be considered indispensable.

And yet, while there is (understandable) national hand-wringing over the future of Canada’s auto industry—especially in light of U.S. President Donald
Trump’s renewed tariff rampage—another industry, arguably more economically important, is being dangerously overlooked.

That industry is canola.

A summer drive through Manitoba, Saskatchewan or Alberta makes the scale hard to miss. Yellow fields stretch to every horizon. Canola production has exploded over the past decade and has become the very lifeblood of the Prairies.

Without it, large parts of those provinces would be economically barren and far more sparsely populated. We’re not talking about niche agriculture here—we’re talking about a foundational industry that keeps the lights on across three provinces.

Canada is the world’s largest exporter of canola, a crop used to produce cooking oil, animal feed and biofuels. Its export-driven success makes it a cornerstone of the Prairie economy.

Now consider this: Canada’s auto manufacturing industry contributes about $19 billion annually to GDP and employs around 125,000 people directly in assembly and parts manufacturing. Include distribution and aftermarket services, and you get a bigger figure, but the core numbers still pale in comparison to canola.

So, here’s the uncomfortable question: If you had to sacrifice one, which would it be?

It’s a Hobson’s choice. Nobody wants to lose either. But Canada has been pushed into a position where something has to give.

The Trudeau government—and before that, the Biden administration—imposed 100 per cent tariffs on made-in-China electric vehicles (EVs). The logic was straightforward: protect the billions being pumped into Canada’s auto sector and turn the country into a hub for EV innovation and production.

It was a defensive move: one meant to slow China’s dominance in the global EV market and give domestic manufacturers room to grow. Without it, cheap, wellbuilt Chinese EVs would undercut Canadian and North American models before they ever left the factory floor.

But China doesn’t take these things lightly. In retaliation, it slapped a 76 per cent tariff on Canadian canola. Prairie farmers, many of whom are already grappling with rising costs and unpredictable weather, are now wondering if their main market is disappearing overnight.

China has long been Canada’s largest canola customer, though the relationship has had flare-ups, including temporary bans in past years tied to diplomatic disputes.

More than two-thirds of Canada’s exported canola goes to China. The latest tariff hike has already wiped out an estimated $1 billion in value. And there’s no clear end in sight.

Manitoba Premier Wab Kinew was blunt last week: Canada cannot afford to be in a trade war with both the United States and China. He suggested that, in the short term, Ottawa should direct EV tariff revenues to support canola producers. That may buy us some time. But the broader strategic question looms larger: With the U.S. under Trump becoming an increasingly unstable trade partner, and China punishing us for playing by American rules, where does Canada place its long-term bet?

It’s not an easy question to answer.

China is hardly an ideal partner. Its human rights record is abysmal, and its growing economic power often comes with strings attached. But we also can’t deny that it has already become the global manufacturing centre in many key sectors—including electric vehicles.

Then there’s the U.S. A longtime ally, yes, but under Trump, all bets are off. In January, he said of Canada, “We don’t need anything they have.” Not cars. Not oil. Not even niceties.

CUSMA—the Canada–United States–Mexico Agreement that replaced NAFTA—governs most of Canada’s trade with our two largest partners. If Trump reopens the deal—and with Trump, it’s usually safest to take him literally—the Canadian auto industry may not survive. Billions in subsidies and protective tariffs won’t matter if the largest market slams its door shut.

So, again: what should we protect?

New markets for canola are being pursued—in Europe, Japan and elsewhere. But they won’t match China’s scale anytime soon. Diversifying export markets takes years. Prairie farmers don’t have that kind of time.

Meanwhile, dreams of building a Canadian-made EV remain just that: dreams. The auto sector may eventually pivot and survive, but right now, it’s the one on life support. Canola is the industry that’s vibrant—unless we let it get crushed in a trade crossfire.

I lived in an auto town for over two decades. I know the stakes. I’ve seen what happens when plants close, when supply chains dry up, and when livelihoods vanish.

But we need to be realistic.

Canola is a winning industry. It feeds the economy, supports thousands of families and helps keep our rural communities alive. It doesn’t need endless
subsidies or federal cheerleading—it just needs stable access to markets.

That might mean giving ground on EV tariffs. That might mean swallowing some pride on the international stage. But Canada cannot afford to sacrifice a thriving sector to save one already on the brink.

If we’re going to make hard choices—and we will—let’s make the one that protects what still works.

Canada cannot lose canola.

Doug Firby is an award-winning editorial writer with over four decades of experience working for newspapers, magazines and online publications in Ontario and western Canada. Previously, he served as Editorial Page Editor at the Calgary Herald.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country

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