Ottawa handing out electric car subsidies

It’s long been known that government subsidies drive electric vehicle (EV) sales much more than their price or performance, whether it was the $14,000 subsidy in Ontario (struck down by Premier Doug Ford), the $5,000 subsidy offered to potential EV buyers in British Columbia (where you also get a subsidy for installing a charger) or the $8,000 in Quebec (for vehicles under $75,000).

But the Trudeau government has decided all Canadians should qualify for a subsidy, whether their province offers one or not. In Budget 2019, the federal government plans to spend $130 million (over five years) building EV charging stations in “workplaces, public parking spots, commercial and multi-unit residential buildings, and remote locations.” Further, Ottawa will provide $5 million, also over five years, to work with auto manufacturers to “secure voluntary zero-emission vehicle sales targets to ensure that vehicle supply meets increased demand.”

But the largest EV spending in the latest federal budget is the $300 million (over three years) to offer a federal “purchase incentive” of up to $5,000 for electric battery (or hydrogen fuel-cell vehicles) that cost less than $45,000.

In a recent announcement, the government unveiled rebates of $5,000 for fully electric vehicles and $2,500 for plug-in hybrids. The government also decided its generosity will also apply to higher-cost EVs, raising the eligibility for rebates, which now extends to $50,000 vehicles.

Canada has set a target to sell 100 per cent electric vehicles by 2040, with sales goals of 10 per cent by 2025, and 30 per cent by 2030. Considering that in 2017, EV sales reached four per cent of passenger car sales, that goal is a way off. Not surprisingly, the three provinces with the highest rebates—B.C., Quebec and pre-Ford Ontario account for 95.8 per cent of EV sales nationwide (this includes both fully electric cars and plug-in hybrid vehicles).

So in addition to imposing carbon pricing on provinces, this federal government will spend our tax dollars to subsidize new (and often well-to-do) car buyers and give away massive tax write-offs to businesses, to obtain carbon emissions at orders of magnitude higher than simply buying carbon emission credits online.