If electric vehicles are as financially viable as gasoline-powered vehicles, why did the Canadian government have to give a $13 billion subsidy to a $7 billion Volkswagen battery plant to be built in Ontario?
The plant will create up to 3,000 jobs. The government subsidy amounts to $4.3 million per job.
Volkswagen and the government say the plant will also create 30,000 indirect jobs. This is a facetious argument. Spending $13 billion on just about anything would have significant downstream ripple effects.
What the Trudeau government never seems to understand is that governments do not create wealth. Nor do they have a pool of excess cash to distribute. They get their money only from taxing productive people and companies who create wealth (or from borrowing money, which in the long run amounts to the same thing because it will have to be paid back). In other words, the government only redistributes wealth it sucks out of the productive economy. The $13 billion it is injecting into the Volkswagen plant was taken from other companies and people who might have invested it in more productive ventures.
The cost of the subsidy averages out to $333 per Canadian, or $1,000 for a family of three or $2,000 for a family of six.
Furthermore, where is the logic or fairness in taxing other vehicle manufacturers to subsidize Volkswagen?
The battery factory is probably expected to use Canadian-mined lithium. Canada does have some significant lithium reserves. However, Canada currently produces no lithium and probably won’t for a long time—unless the Canadian government streamlines the cumbersome, decade-long environmental assessment and review process it has imposed on other resource development projects. Lithium mining itself causes considerable environmental damage, and switching to electric vehicles makes no sense if much of the electricity is generated by burning fossil fuels.
The whole approach reeks of tunnel vision. The Trudeau government seems willing to spend any amount of money in order to switch the whole country from fossil fuels to electricity, even if it bankrupts the government, devastates the economy, and does little to reduce global warming in the end.
James R. Coggins 