GREEN: You’re paying for Ottawa’s electronic gambling addiction

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In my high school yearbook, my mother wrote, “Good, better, best!” Never let it rest until you’ve done your good better and your best!” The Trudeau government seems determined to turn that idea on its head put – worse, worse, worse! Never stop right away! Make your bad ideas worse and your even worse ideas!

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So despite the fact that it is theoretically understood And empirically well documented Although governments are utterly incompetent when trying to “manage” market economies (that is, to encourage what they see as “successful” technologies, activities, sectors, etc.), the Trudeau administration seems determined to do little else do, particularly with natural resources and energy and greenhouse gas emissions.

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Today’s shining example? The Trudeau administration’s decision to give Volkswagen $13 billion as an “incentive” to build a massive electric vehicle (EV) battery plant in Ontario (rather than in the United States, which provides wholesale EV subsidies).

It is quite difficult to portray the Volkswagen “investment” as anything other than “the selection of successful technologies” in several areas. “Winners” will recognize companies that are most committed to specific technologies using specific metals and minerals for specific uses specifically selected for the government’s desired future of transportation, which is a world of battery-powered vehicles.

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However, there is a reason believe This vision is unfeasible on several dimensions, from electricity production capacity to mineral and metals production capacity. As more people pay attention to the metals and additional power generation required for electric vehicles, the massive investment in charging capacity, and the massive improvements in power transmission and distribution networks, it becomes less obvious that the future belongs to electric vehicles. It is obviously a huge government gamble, with decades of plans being hatched that include building massive battery manufacturing plants based on an unproven and untested idea.

All of that would be bad enough, but to make matters worse, the Trudeau government, in its clumsy way, managed to simultaneously place a dubious bet on Volkswagen while at the same time questioning the viability of a similar bet previously placed (albeit on a much smaller scale) with Stellantis, an automaker that is also betting on the future of electric vehicles and also plans to build a battery manufacturing facility ontario.

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Now it’s unclear whether Ottawa’s recent gamble (the $13 billion to Volkswagen) will result in a gradual increase in Canadian-made batteries to support (or thereby create jobs for) electric vehicle production in Canada, or if it will There will simply be a replacement for the planned capacity expansion, as Stellantis has suspended its plan to go ahead with building its battery plant unless it gets its “fair share” of sweet, sweet government subsidies to match Volkswagen’s.

A rational and responsible government that bothers to study economic theory or just to look at the record of failing government efforts to micromanage markets and economies would not do such stupid things, whether in energy, transportation, technology – or mining sector. These are all huge profit centers for Canada that will bet on EV gambling from now on. Nor is it a rational policy to incentivize the private sector to play blackmail games such as “subsidy, subsidy, who gets the subsidy”.

That our government continues to not just fine-tune the economy and put taxpayers’ money heavily on bottom line means we don’t have that kind of rationality and responsiveness in Ottawa today.

Kenneth Green is a Senior Fellow at the Fraser Institute