Troubled Transition

The Pawns Push Back against the Trudeau Government’s Electric Vehicle Diktats

Gwyn Morgan
June 8, 2024
Perhaps there is a certain twisted logic to the woke left’s attempt to convince schoolchildren that math is racist and that 2 plus 2 might well equal 5. For this may be the only way to get the “math” surrounding the Justin Trudeau government’s push to force Canadians into buying only electric vehicles as of 2035 to work in any way at all. Gwyn Morgan reviews the actual math of key elements of the EV transition scheme – the electric power needs, the subsidized purchases, the tax credits, the vast number of required charging stations, the maintenance of roads – and finds both the costs and the implementation obstacles to be a mixture of steep, dubious and prohibitive. So much so, Morgan concludes, as to cast the entire EV transition in doubt.
Troubled Transition

The Pawns Push Back against the Trudeau Government’s Electric Vehicle Diktats

Gwyn Morgan
June 8, 2024
Perhaps there is a certain twisted logic to the woke left’s attempt to convince schoolchildren that math is racist and that 2 plus 2 might well equal 5. For this may be the only way to get the “math” surrounding the Justin Trudeau government’s push to force Canadians into buying only electric vehicles as of 2035 to work in any way at all. Gwyn Morgan reviews the actual math of key elements of the EV transition scheme – the electric power needs, the subsidized purchases, the tax credits, the vast number of required charging stations, the maintenance of roads – and finds both the costs and the implementation obstacles to be a mixture of steep, dubious and prohibitive. So much so, Morgan concludes, as to cast the entire EV transition in doubt.
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The federal government has mandated that all new passenger vehicles and light-duty trucks sold in Canada be electrically powered by 2035. Two of the many serious obstacles to achieving that goal will be the requirement for vastly more electrical generating capacity along with hundreds of thousands of additional charging stations.

A study by the Fraser Institute released in March, Electric Vehicles and the Demand for Electricity, found that the addition of millions of EVs to Canada’s roads would push nationwide demand for electricity up by more than 15 percent, requiring the equivalent of either 10 new large hydroelectric dams the size of B.C.’s nearly completed Site C Dam on the Peace River, or 13 large new natural gas-fuelled facilities. The Site C dam needed 10 years to gain environmental approval, took an additional decade to build and has cost $16 billion. All to generate approximately 1,100 megawatts of electricity. Most of Canada’s viable large-scale sites have already been dammed, and opposition to any new dam would be bound to be even more stubborn than against Site C. Planning, funding, building and commissioning 10 new dams the size of Site C or larger in the next 11 years is clearly unrealistic.

The cost of a charge: Research suggests that adding millions of EVs to Canadian roads would require an over 15 percent increase in nationwide electricity supply – equivalent to 10 large hydroelectric dams the size of B.C.’s $16 billion Site C Dam on the Peace River (bottom). (Source of bottom photo: BC Hydro)

That leaves the natural gas-fired plants. Technically, these could be built in such a time-frame, and western Canada is producing sufficient natural gas to fuel them. But not only is the Justin Trudeau government vehemently opposed to building any new fossil fuel-powered electricity plants, doing so would kibosh those EV’s zero emissions; they would become fossil-fuel-powered vehicles, just indirectly.

In addition, the cost of building and operating those gas plants would be enormous. And who would pay? Since it’s virtually impossible to separate power billing by source, their costs would need to be rolled into existing electricity rates. That would increase the burden on Canadian ratepayers and businesses, many of which are already struggling. And it might even lead inflation-weary, economically hard-pressed citizens sick of all the costly political games to riot in the streets. The only alternative, then, would be huge nationwide power subsidies in a country with an already massive national debt.

The whole campaign to “transition” Canadians into EVs is already prodigiously expensive. Consider just the direct EV subsidies, aimed at narrowing the price advantage that internal combustion engine vehicles have over EVs. The federal government currently kicks in a $5,000 subsidy for every EV purchased in Canada. Another 24 million or so EVs will need to be sold to switch over Canada’s entire light-duty vehicle fleet. The overall subsidy math is pretty simple.

Then, powering up all the anticipated new EVs will require a major push to install charging stations all over Canada. Here again, taxpayers are being forced to ride to the rescue with Ottawa’s $680 million Zero Emission Vehicle Infrastructure Program (ZEVIP). Meaning, subsidized charging stations. ZEVIP comes after the federal government has already spent more than $1 billion “to make EV’s more affordable and chargers more accessible for Canadians.” How has that worked out? As of late 2021 the entire country had just 6,000 publicly available EV charging stations. ZEVIP has the grandiose goal of adding another 84,500. But Canada requires some 160,000 gasoline and diesel pumps to keep its vehicle fleet running and make refuelling reasonably convenient nearly anywhere. Recharging an EV takes at least 10 times as long as gassing up a regular car, implying the need for a couple of million EV charging stations.

Good luck with that: The Government of Canada claims its $680 million Zero Emission Vehicle Infrastructure Program will help get nearly 85,000 charging stations built. But in the U.S., President Joe Biden’s US$7.5 billion charging station construction program has produced just eight charging stations in two-and-a-half years. (Sources of photos: (top) Marc Bruxelle/Shutterstock; (bottom) EV Central)

The program will also be burdened with the maddening reality – as I detailed in this recent column – that nothing government touches comes in on time or on budget any longer. So what will ZEVIP’s $680 million really buy? Recent U.S. experience may be sadly instructive. The enormous Infrastructure Investment and Jobs Act passed at the behest of the Joe Biden Administration in late 2021 allotted US$7.5 billion to build a promised 500,000 EV charging stations by 2030. As of last month, the U.S. government had succeeded in building a grand total of – wait for it – eight. No, there aren’t any zeros missing. So I’m not hopeful that EV charging stations will magically mushroom all across our nation, either.

Adding to the taxpayer-committed largesse here in Canada, a recent report by the Osler law firm carries news of a new EV supply-chain incentive included in the Liberals’ gargantuan Budget 2024 that provides a further 10 percent tax credit, this one for buildings used to manufacture EVs, batteries, and related materials. It comes on top of the existing, massive 15-30 percent tax credits on investment in or manufacture of “clean” technology and EVs. The latest corporate giveaway was designed for Honda’s recently announced $15 billion plant, but also applies to other new projects.

Who’s to pay? Canadians driving gasoline-powered vehicles pay over $23 billion in road use taxes annually while EV drivers coast along for free – an unrealistic arrangement if EVs do take over our roads. (Source of photo: Shutterstock)

If your head isn’t already spinning in trying to comprehend the massive scale of consumer and taxpayer largesse being shovelled towards the EV industry – all in an effort to convince Canadians to switch en masse to these expensive, unreliable and inconvenient cars – there’s another huge subsidy: free road use. We reprehensible drivers of gasoline and diesel vehicles pay a lot in fuel taxes.

The Canadian Taxpayers Federation’s 24th Annual Gas Tax Honesty Report shows that Canadian drivers in 2022 paid an average of 55 cents per litre in gasoline taxes (based on a retail price of $1.76 per litre; exact tax rates vary by province, of course). Combining that information with Statistics Canada data estimating total gasoline consumption of 42.5 billion litres in 2022 means that Canadian drivers collectively pay over $23 billion in road use taxes annually to all levels of government.

Meanwhile, EV drivers continue to pay nothing. Besides the grievous disparity of this situation, Trudeau’s EV mandate would gradually remove gasoline and diesel-fuelled vehicles from the road. Then who will pay to maintain the roads for all those EVs to travel on? Clearly, EVs will need to be taxed in some way, and some provinces are just starting to do so, like Saskatchewan’s $150 extra annual registration fee on EVs, introduced in late 2021. But such baby steps will need to get a lot larger if gasoline-powered vehicles really do start vanishing from daily traffic. But having to start paying their share to maintain roads will make EVs even less attractive to car buyers.

Now for the most important question. Will this big shift to EVs have any environmental benefit? Manufacturing EV batteries requires huge quantities of “rare earth” minerals as well as conventional metals. A Fraser Institute report published in November, Can Metal Mining Match the Speed of the Planned Electric Vehicle Transition? references an International Energy Agency study showing that to meet international EV pledges a gargantuan 388 new lithium, nickel, cobalt and other related metal mines will be needed worldwide. But the typical timeline from regulatory application to first production varies from six-nine years for lithium to 13-18 years for nickel. Rare-earth mineral production can’t possibly ramp up fast enough to meet the Trudeau government’s 2035 all-EV “mandate”.

What about the human cost of all those mines? Most of the world’s known large rare-earth mineral deposits are in developing countries. A report from a team of researchers led by Northwestern University, entitled Understanding cobalt’s human cost, examined the impact of cobalt mining in the Democratic Republic of Congo. It found that such mining had “dire effects on human well-being,” including “increases in violence, substance abuse, food and water insecurity, and physical and mental health challenges,” as well as uprooting farmers from their lands and in some cases kicking them out of their houses. Half of the world’s rare-earth minerals lie in Africa, where reports of child labour and other human rights abuses are all too common.

The human cost of a “green” future: Depicted is the main cobalt mining site in the Democratic Republic of Congo, where 75 percent of this critical input to EV batteries is mined; as one recent academic report notes, this hazardous industry has “dire effects on human well-being”, including on physical and mental health, and often involves child-labour and human rights abuses. (Source of photos: Siddharth Kara, retrieved from The Independent)

Clearly, the answer to the question “Will the shift to EVs have any net environmental benefit?” is “No.” Moreover, the human cost of trying to meet the EV targets will be profoundly negative.

These formidable direct obstacles to a smooth EV transition make it highly unlikely that Trudeau’s ban on gasoline vehicles will happen. But the most profound underlying reason the entire scheme is probably doomed comes from the man who first articulated the principles of personal and economic freedom. In his 1759 book The Theory of Moral Sentiments, economist and philosopher Adam Smith stated, “The man of the system seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges different pieces upon a chessboard. But people are not chess pieces to be moved around by a hand from above.”

Like philosopher Adam Smith’s (top left) “man of the system”, Justin Trudeau (top right) tries to arrange people as if they are “pieces upon a chessboard”; but the thousands of unsold EVs filling vast parking lots in China, the U.S. and seaports around the world suggest car-buying consumers are still capable of independent decision-making. (Sources of photos: (top right) The Canadian Press/Chad Hipolito; (bottom) Golden Shrimp/Shutterstock)

Justin Trudeau is the very embodiment of Adam Smith’s “man of the system”, attempting to push Canadians around like pawns on an ideological chessboard. But even as I write this column come reports of EV sales collapsing – and of vast parking lots of unsold and perhaps unsaleable EVs in China, Australia and dockside at various seaports – despite aggressive price slashing and all those ever-increasing taxpayer subsidies. The “hand from above” is losing to the independent thinking of regular people.

Gwyn Morgan is a retired business leader who was a director of five global corporations.

Source of main image: Shutterstock.

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