Agriculture
Ottawa’s EV Gamble Just Cost Canola Farmers Billions
From the Frontier Centre for Public Policy
By Conrad Eder
Ottawa’s EV subsidies have backfired. Western Canada’s canola farmers are the latest victims of misguided government industrial policy
Economic policy is more like gardening than engineering. You can shovel all the money you want into trying to grow coconuts in a Canadian winter, but you’ll achieve far better results—and feed many more people—by planting potatoes in the spring and letting nature run its course.
For Canada, that means embracing policies that create fertile ground for all businesses to compete, innovate, and serve consumers. Ottawa, unfortunately, prefers to play God with the weather. What began as economic tinkering has triggered a cascade of interventions now devastating Canada’s canola industry.
Rather than letting the market determine Canada’s strengths, federal and provincial politicians decided they knew better, wagering $52.5 billion to lure EV and battery manufacturers to Canada. Massive public subsidies were placed on a handful of firms and technologies.
The Parliamentary Budget Officer delivered a sobering assessment of this boondoggle: it could take decades for taxpayers to break even on these subsidies—and only if nothing goes sideways.
Well, you know what they say about best-laid plans.
After committing billions, Ottawa faced an awkward truth: Chinese manufacturers were eating our lunch, offering EVs at lower prices, thanks in part to their own subsidies. Instead of reversing course, Ottawa hit the panic button and slapped a 100 per cent tariff on Chinese EVs.
Let’s be clear: this wasn’t about national security or consumer protection. It was about salvaging one of the largest industrial bets in Canadian history.
Yes, some sectors require targeted oversight to protect privacy and safety. EVs aren’t one of them. Their risks can be managed with targeted regulations and technical safeguards. But the tariffs do real damage by blocking affordable EVs and denying Canadians the right to judge for themselves.
Predictably, China didn’t take the tariffs lying down. In March, Beijing slapped 100 per cent duties on Canadian canola oil. In August, it hit canola seed with 75.8 per cent tariffs, effectively shutting out Canadian farmers from a $4.9-billion market.
Ninety-nine per cent of canola fields are in Western Canada. Canola is Canada’s top crop export, supporting tens of thousands of Prairie jobs and generating over $43 billion annually.
Another trade war, another lose-lose. Canadians pay more for EVs. Chinese consumers pay more for food.
And now, predictably, agricultural lobbyists are seeking Ottawa’s help. The government—having started the fire—has responded with $370 million in biofuel incentives and expanded financial support for canola producers. More subsidies. More distortion. Another Band-Aid for another self-inflicted wound.
Ironically, Canada’s farm sector already receives substantial government support. Now it’s receiving even more just to survive Ottawa’s protection of a separate subsidized industry. That’s the trouble with industrial policy: helping one sector often means hurting another. And taxpayers get the privilege of funding both.
There’s a better way forward: it doesn’t involve doubling down on mistakes. The solution is to stop the engineering and let the economy breathe. Lower taxes. Fewer regulations. Neutral infrastructure investment. These create the conditions for businesses to rise or fall on merit. That’s how innovation flourishes: through competition, not cabinet-level favouritism.
It’s not hard to follow the dominoes. EV subsidies triggered Chinese tariffs. Tariffs triggered canola retaliation. Canola retaliation now triggers demands for bailouts.
One attempt to pick winners has manufactured a long list of losers.
Had Ottawa stuck with free-trade principles, Canadians could’ve had more affordable EVs, taxpayers would’ve saved billions, and canola farmers would still have access to a vital export market.
Instead, we get a chain reaction of policy “fixes,” each one compensating for the damage done by the last—each one digging the hole deeper.
When governments try to engineer economic outcomes, citizens foot the bill. The real lesson? Governments are great at creating problems. Markets are better at solving them.
If Canada wants a prosperous economic future, it must stop betting the farm on political hunches and let competitive markets do the cultivating.
Conrad Eder is a policy analyst at the Frontier Centre for Public Policy.
From the Daily Caller News Foundation
By Bonner Cohen
“We will not approve wind or farmer destroying Solar,” said President Trump in an Aug. 20 post on Truth Social. “The days of stupidity are over in the USA!!!”
Trump’s remarks came six weeks after enactment of his One Big Beautiful Bill terminated tax credits for wind and solar projects by the end of 2027.
The Trump administration has also issued a stop-work order for the Revolution Wind project, an industrial-scale offshore wind project 12 miles off the Rhode Island coast that was 80 percent completed. This was followed by an Aug. 29 announcement by the Department of Transportation that it was cutting around $679 million in federal funding for 12 offshore wind farms in 11 states, calling the projects “wasteful.”
Sending an unmistakable message to investors to avoid risking their capital on no-longer-fashionable green energy, the Department of Agriculture (USDA) is pulling the plug on a slew of funding programs for wind and solar power.
“Our prime farmland should not be wasted and replaced with green new deal subsidized solar panels,” said Agriculture Secretary Brooke Rollins on a visit to Tennessee in late August. “We are no longer allowing businesses to use your taxpayer dollars to fund solar projects on prime American farmland, and we will no longer allow solar panels manufactured by foreign adversaries to be used in our USDA-funded projects.”
The White House is putting the squeeze on an industry that can ill-afford to lose the privileges it has enjoyed for so many years. Acknowledging the hesitancy of investors to fund green-energy projects with the looming phaseout of federal subsidies, James Holmes, CEO of Solx, a solar module manufacturer, told The Washington Post, “We’re seeing some paralysis in decision-making in the developer world right now.” He added, “There’s been a pretty significant hit to our industry, but we’ll get through it.”
That may not be easy. According to SolarInsure, a firm that tracks the commercial performance of the domestic solar industry, over 100 solar companies declared bankruptcy or shut down in 2024—a year before the second Trump administration started turning the screws on the industry.
As wind and solar companies confront an increasingly unfavorable commercial and political climate, green energy is also taking a hit from its global financial support network.
The United Nations-backed Net Zero Banking Alliance (NZBA) “has suspended activities, following the departure of numerous financial institutions from its ranks amid political pressure from the Trump administration,” The Wall Street Journal reported. Established in 2021, the NZBA’s 120 banks in 40 countries were a formidable element in global decarbonization schemes, which included support for wind and solar power. Among the U.S. banks that headed for the exits in the aftermath of Trump’s election were JP Morgan, Citi, and Morgan Stanley. They have been joined more recently by European heavyweights HSBC, Barclays, and UBS.
Wind and solar power require a lot of upfront capital, and investors may be having second thoughts about placing their bets on what looks like a losing horse.
“Wind and solar energy are dilute, intermittent, fragile, surface-intensive, transmission-extensive, and government-dependent,” notes Robert Bradley, founder and CEO of the Institute for Energy Research.
Given these inherent disadvantages of wind and solar power, it’s no surprise that the Department of Agriculture is throttling the flow of taxpayer money to solar projects. The USDA’s mission is to “provide leadership on food, agriculture, food, natural resources, rural development, nutrition, and related issues….” It is not to help prop up an industry whose best days are behind it.
Effective immediately, wind and solar projects will no longer be eligible for USDA Rural Development Business and Industry (B&I) Guaranteed Loan Program. A second USDA energy-related guaranteed loan program, known by the acronym REAP, will henceforth require that wind and solar installations on farms and ranches be “right-sized for their facilities.”
If project applications include ground-mounted solar photovoltaic systems larger than 50 kilowatts or such systems that “cannot document historical energy usage,” they will not be eligible for REAP.
Ending Misallocation Of Resources
“For too long, Washington bureaucrats and foreign adversaries have tried to dictate how we use our land and our resources,” said Republican Rep. Harriot Hagermann of Wyoming. “Taxpayers should never be forced to bankroll green new deal scams that destroy our farmland and undermine our food security.”
Hagermann’s citing of “foreign adversaries” is a clear reference to China, which is by far the world’s leading manufacturer of solar panels, according to the International Energy Agency.
According to a USDA study from 2024, 424,000 acres of rural land were home to wind turbines and solar arrays in 2020. While this – outdated – figure represents less than 0.05 percent of the nearly 900 million acres of farmland in the U.S., the prospect of ever-increasing amounts of farmland being taken out of full-time food production to support part-time energy was enough to persuade USDA that a change of course was in order.
Bonner Russell Cohen, Ph. D., is a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).
Quick Hit:
The Trump administration’s USDA is pulling back from defending Biden-era farm aid programs that gave preferential treatment based on race and gender. The move aligns with President Trump’s directive to dismantle remaining diversity, equity, and inclusion initiatives across federal agencies.
Key Details:
- The Wisconsin Institute for Law and Liberty (WILL) sued on behalf of dairy farmer Adam Faust, challenging USDA aid programs that favor minorities and women.
- Programs under scrutiny include loan guarantees, dairy coverage, and conservation incentives, all of which disadvantaged white male farmers.
- USDA issued a final rule eliminating “socially disadvantaged” designations, stating programs must uphold meritocracy, fairness, and equal opportunity.
Diving Deeper:
The U.S. Department of Agriculture under the Trump administration is abandoning its defense of farm aid programs created during the Biden years that granted benefits based on race and gender. In a recent court filing, the USDA declined to defend several programs that civil rights watchdogs argue discriminated against white male farmers.
The litigation was brought forward by the Wisconsin Institute for Law and Liberty (WILL) on behalf of Adam Faust, a Wisconsin dairy farmer. Faust contends that the Biden-era rules violated equal protection principles by privileging minorities and women over others in loan guarantees, dairy margin coverage, and conservation cost-share programs.
Under the loan guarantee program, minority and female farmers could secure up to 95% federal backing on loans, while white male farmers were limited to 90%. This disparity directly affected borrowing power and interest rates. Similarly, the Dairy Margin Coverage Program charged white male farmers a $100 annual fee, while exempting “socially disadvantaged” farmers. In conservation projects, minority and female participants received up to 90% reimbursement for costs, while others received only 75%.
On July 10, the USDA issued a final rule to strike the “socially disadvantaged” designation from its regulations, calling it inconsistent with constitutional principles and with President Trump’s policy objectives. “Moving forward,” the USDA rule stated, “USDA will no longer apply race- or sex-based criteria in its decision-making processes, ensuring that its programs are administered in a manner that upholds the principles of meritocracy, fairness, and equal opportunity for all participants.”
The department noted that while the loan guarantee program will be amended immediately, officials are still reviewing how to apply the new policy to the dairy and conservation programs. The USDA also signaled that its decision “could obviate the need for further litigation,” though WILL has indicated its legal fight will continue.
“This lawsuit served as a much-needed reminder to the USDA that President Trump has ordered the end to all federal DEI programs,” said Dan Lennington, deputy legal counsel at WILL. “There’s more work to be done, but today’s victory gives us a clear path to do even more in the name of equality.”
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