Conservative motion to study EV subsidies fails in committee

Liberal, Bloc, and NDP MPs opposed a Conservative motion to study more than $50 billion in handouts to electric vehicle automakers. They claimed it was ‘poorly timed’ and ‘unfair’ to the industry.

Alex Dhaliwal
  |   September 30, 2024   |   News   |   Be the first to comment

A Conservative motion to study some $50 billion in electric vehicle (EV) subsidies was voted down Thursday. Three proposed factories in Canada have either halted construction or are reviewing future operations.

At the request of Conservative MP Rick Perkins, the Standing Committee on Industry and Technology contemplated a study of the billions given to EV automakers. A federal mandate insists on rendering fossil-fuel vehicles obsolete by 2035.

Perkins notes a $7.2 billion Northvolt EV plant in Québec is up in the air, as is Umicor’s $2.7 billion EV factory. Ontario’s $1.8 billion expansion in Oakville, which received $590 million dollars in taxpayer handouts, may not proceed either.

“The government of Canada has invested upwards of $50 billion towards the creation of an EV battery ecosystem in Canada and has mandated that all automobile sales in Canada be zero emitting by 2035,” Perkins told the committee, before asking they “agree to a four-meeting study … to review the feasibility of the government’s EV strategy.”

Following the review, the committee would report its findings to the House of Commons and request a comprehensive response from the Trudeau government. They have yet to provide a cost for their EV mandate.

EV automakers are scaling back around the globe, including Sweden. Northvolt, a subsidized Swedish automaker, confirmed 1,600 job cuts at EV plants abroad. 

A Trudeau cabinet minister responsible for billions in handouts said taxpayers must “rally around” the battery maker amid sweeping job cuts. 

Northvolt management blamed “head winds in the automotive market” for the job cuts, reported Blacklock’s Reporter. “Are you worried about the project in Canada?” asked a reporter. “It concerns Sweden,” replied Industry Minister François-Philippe Champagne. 

MP Perkins notes that the EV industry only remains alive and well wherever a “massive government subsidy” is in place.

“In this case, when it comes to Stellantis and Volkswagen EV plants, what we have is a 100% assembly subsidy from the taxpayers of Canada through 2029. Then it’s 75% the year after and then 50% the year after that, 25% the year after that,” he said.

EV growth projections face a "significant slowdown" moving forward, according to a report published in June. Statistics Canada says purchases plateaued in the third quarter of 2023.

Despite declining consumer interest and market viability for EVs, auto executives recently urged the federal government to fork out billions more in subsidies. Existing handouts total $151.5 billion to date, including $24.5 billion to build charging stations and $52.5 billion for auto and battery manufacturers.

Several Liberal MPs pushed back, accusing the Official Opposition of not prioritizing a plan on ‘climate change.’ Conservative MP Michelle Rempel Garner said that wasn’t the case amid their calls for the study. 

On Thursday, Government House leader Karina Gould claimed their climate plan would cut emissions by “the equivalent of 60 million cars.” Aides did not substantiate the claim, reported Blacklock’s Reporter.

Emissions went up in the last official reporting period, and Canada has never had 60 million cars. Motor vehicles on the road number 26.3 million, according to yearly vehicle registration reports compiled by Statistics Canada.

Liberal MP Chandra Arya argued that EV subsidies attracted key investors to Canada in the global supply chain.

“It’s time for us to encourage as many global players as possible to come to Canada and set up their plants,” said Arya. “We should not interfere in their day-to-day operations and their short-term strategies or tactics that they use,” she added.

“Stephen Harper had the worst climate record in the world and Canadians were ashamed of our actions when it came to climate change when the leader of the Opposition was in government,” said Gould. “We just got the news [that] our climate plan is working.”

“Emissions from transport have generally increased,” said a May 2 National Inventory report. The transportation sector is the largest single source of emissions in Canada, a total 196 million tonnes a year.

Minister Champagne told reporters last week: “When you talk to investors, they see this under a timeline of 10, 20, 30, 50 years … remember, it took Tesla 17 years before it was profitable.”

MP Rempel Garner noted apparent hypocrisy with Liberal and NDP MPs bemoaning “rich, corporate, executives.”

The Bloc Quebecois and NDP opposed the motion, claiming it was ‘poorly timed’ and ‘unfair’ to the auto industry.

“Everybody in the Bloc knows I have patience, but I’ve run out of patience,” said Bloc Quebecois MP Jean-Denis Garon. “This motion seeks to try an entire industry, it could have been written to be productive but it’s written to be complacent.”

NDP Premier Brian Masse called the timing of the motion “difficult to deal with” and that he “can’t support this motion at this time.”

The motion ultimately failed.

Alex Dhaliwal

Journalist and Writer

Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.

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