Prime Minister Justin Trudeau and Ontario Premier Doug Ford have pledged to subsidize a combined $64 million in a half a billion project by Goodyear.
Monday’s investment announcement follows indicators showing a continued decline in EV interest.
In 2023, electric vehicles took 22 days to sell, but by Apr. 2024, the average was 55 days. In contrast, gas-powered cars took an average of 51 days to sell.
In the last four years, the Liberals said that the party has invested more than $46 billion in electric vehicle manufacturing in Canada. Despite the massive and continuous investment, Canadians’ desire for electric vehicles has plummeted, as have sales worldwide.
Ontario Director of the Canadian Taxpayers Federation, Jay Goldberg, said this announcement is part of a long series of partnerships between the Trudeau and Ford governments engaging in “corporate welfare.”
“Together, they spent almost $50 billion of taxpayer money, giving these free handouts to these auto and auto part manufacturer companies in Ontario. In many cases, spending well over $1 million a job with declining demand for electric vehicles,” said Goldberg. “The most important basic thing is government money should not be going out of the pockets of hard-working Canadians and into the pockets of these wealthy auto giants who just don’t need taxpayer bailouts.”
The Liberals previously announced that all vehicles sold by 2035 must be electric.
Due to declining sales, Tesla laid off 10% of its global workforce in Apr. Ford has postponed its EV production in Oakville, Ontario, for the next two years. General Motors had a target to build 400,000 electric vehicles by the middle of 2024, which has since been abandoned due to lower-than-expected sales.
Car rental companies are also reducing their electric vehicle inventories; Hertz announced plans to sell one-third of its U.S. EV fleet and reinvest in gas-powered vehicles.
Fraser Institute’s director of natural resource studies, Elmira Aliakbari, and policy analyst Julio Mejia said the direction should raise some eyebrows.
“The sluggish demand for EVs and the response from automakers should raise red flags for both the Trudeau government and Biden administration, given the massive subsidies (a.k.a. corporate welfare) injected into the EV and battery production industry,” wrote Aliakbari and Mejia in an op-ed published in May.
The two added that the Parliamentary Budget Officer said it would take 20 years to break even on the $28.2 billion given to the battery plant in Windsor. This break-even analysis does not include the $5 billion given to Honda.
Goldberg said this 20-year assumption was based on the best-case scenario. Demand would not fall, companies would not leave Canada, and sales would persist — conditions which have not held.
“You’ve got 50% of Canadians saying they’re $200 away from not being able to pay their bills. And somehow the federal government expects all of those folks to be able to run out and buy an electric vehicle by 2035. That’s not going to happen,” said Goldberg.
The $5 billion subsidy given to Honda was to create 1,000 jobs, costing Canadian taxpayers $5 million per job.
According to a previous Consumer Reports survey, electric vehicles have 79% more problems than their gas counterparts.
The Liberals’ press release said that the $575 million investment will create 200 new jobs by 2027 and secure 1,000 jobs in Napanee. The plant aims to reach net-zero emissions by 2040, helping Canada achieve its goal of a net-zero economy by 2050.
The Canada Electricity Advisory Council’s final report, released in June, argued that the federal government’s plan for a net-zero electricity system by 2035 would cost up to $2 trillion. According to Alberta Premier Danielle Smith and Environment Minister Rebecca Schulz, the report proved that the 2035 deadline for a net-zero grid is “unrealistic and unattainable.”
“Whether you’re talking about Volkswagen, Stellantis, Ford, they’re all companies that have had tens of billions of dollars of profits in recent years that do not need taxpayer help,” said Goldberg. “The only reason the government is getting involved is because, in most cases, these companies wouldn’t be doing this EV push without government handouts and bribes.”