A Budget Office report showed the subsidies provided for electric vehicles will cost as much as $50 billion and are still increasing, taking into account the expenses related to debt financing.According to Blacklock’s Reporter, this number is three times greater than the total annual production value of the entire Canadian automobile industry.“Assuming that support for electric vehicle battery manufacturing is deficit-financed, we estimate that public debt charges for federal and provincial governments would further increase the total cost,” said the report Costing Support for EV Battery Manufacturing.Analysts calculated the actual costs of subsidies awarded for the construction of a Volkswagen battery factory in St. Thomas, ON, two Stellantis battery plants in Windsor and Brampton, ON, and a Northvolt factory in Sainte-Basile-le-Grande, QC.Cabinet estimated costs at $37.7 billion. Analysts said actual figures are closer to $43.6 billion plus $6.6 billion in debt charges, a total of $50.2 billion. The figure does not include an August 17 subsidy of $322 million to build a Ford battery parts factory at Bélancour, QC, or the November 14 announcement of $204.5 million in subsidies for an E-One Moli lithium battery plant in Maple Ridge, BC.The combined subsidies are triple annual auto production by all carmakers. The entire auto sector “contributed $16 billion in 2022 to Canada’s gross domestic product,” said a 2022 department of industry briefing note Automotive Industry Zero Emission Vehicles.The report from the Budget Office also cautioned that taxpayers may have to wait for as long as 23 years before they can expect to recover their expenses, even under the most optimistic predictions.“Our estimates of the break-even timelines for the production subsidies are based on several optimistic assumptions,” wrote analysts. “It is certainly possible that break-even timelines for the production subsidies exceed our estimates.”In October 5 testimony at the Commons Industry committee, Budget Officer Yves Giroux justified repeated warnings that the cabinet’s electric vehicle program was costlier than claimed. “I don’t have a vested interest,” he said.“As soon as we publish a report that sets the record straight, there are accusations we have not understood the problem or have a bone to pick,” said Giroux. “That’s not the case.”“We think our approach is reasonable, much more so than the government’s,” said Giroux. Cabinet forecasts were “wildly optimistic,” he said.“I work for parliamentarians,” said Giroux. “I work for the benefit of taxpayers and Canadians. I don’t have a vested interest.”Liberal MP Ryan Turnbull (Whitby, ON) interjected “We have a vested interest in building an electric vehicle supply chain to help increase the economy and fight climate change.” The Budget Office was “pessimistic,” added Turnbull. “I find your assumptions very narrow because you are not looking at the broader vision.”
A Budget Office report showed the subsidies provided for electric vehicles will cost as much as $50 billion and are still increasing, taking into account the expenses related to debt financing.According to Blacklock’s Reporter, this number is three times greater than the total annual production value of the entire Canadian automobile industry.“Assuming that support for electric vehicle battery manufacturing is deficit-financed, we estimate that public debt charges for federal and provincial governments would further increase the total cost,” said the report Costing Support for EV Battery Manufacturing.Analysts calculated the actual costs of subsidies awarded for the construction of a Volkswagen battery factory in St. Thomas, ON, two Stellantis battery plants in Windsor and Brampton, ON, and a Northvolt factory in Sainte-Basile-le-Grande, QC.Cabinet estimated costs at $37.7 billion. Analysts said actual figures are closer to $43.6 billion plus $6.6 billion in debt charges, a total of $50.2 billion. The figure does not include an August 17 subsidy of $322 million to build a Ford battery parts factory at Bélancour, QC, or the November 14 announcement of $204.5 million in subsidies for an E-One Moli lithium battery plant in Maple Ridge, BC.The combined subsidies are triple annual auto production by all carmakers. The entire auto sector “contributed $16 billion in 2022 to Canada’s gross domestic product,” said a 2022 department of industry briefing note Automotive Industry Zero Emission Vehicles.The report from the Budget Office also cautioned that taxpayers may have to wait for as long as 23 years before they can expect to recover their expenses, even under the most optimistic predictions.“Our estimates of the break-even timelines for the production subsidies are based on several optimistic assumptions,” wrote analysts. “It is certainly possible that break-even timelines for the production subsidies exceed our estimates.”In October 5 testimony at the Commons Industry committee, Budget Officer Yves Giroux justified repeated warnings that the cabinet’s electric vehicle program was costlier than claimed. “I don’t have a vested interest,” he said.“As soon as we publish a report that sets the record straight, there are accusations we have not understood the problem or have a bone to pick,” said Giroux. “That’s not the case.”“We think our approach is reasonable, much more so than the government’s,” said Giroux. Cabinet forecasts were “wildly optimistic,” he said.“I work for parliamentarians,” said Giroux. “I work for the benefit of taxpayers and Canadians. I don’t have a vested interest.”Liberal MP Ryan Turnbull (Whitby, ON) interjected “We have a vested interest in building an electric vehicle supply chain to help increase the economy and fight climate change.” The Budget Office was “pessimistic,” added Turnbull. “I find your assumptions very narrow because you are not looking at the broader vision.”
