5 year payback estimate for EV battery-maker subsidies off by 15 years! – PBO

Ottawa’s super-charged EV obsession reaches new heights

Every week, it seems, we get another report revealing the deep thoughtlessness and fiscal recklessness of Ottawa’s electric car and electric-car battery fixation. For example, the Parliamentary Budget Officer recently asked how long it will take for the federal government to see a return on the $28.2 billion of production subsidies to EV battery-makers Stellantis and Volkswagen. The answer—about four times longer than government originally claimed.

Remember, Prime Minister Trudeau said the “full economic impact of the project will be equal to the value of government investment in less than five years.” But according to the PBO, it will take 20 years, not five years, to merely recover the money the government “invested” on behalf of Canadians. There’s no actual profit to be had at that point.

Why the discrepancy?

To figure that out, the PBO looked into the government’s modelling used to generate its “five-year” payback scenario and found that the government’s estimate included numerous assumptions about other investments (and assumed production increases) outside the direct battery-making process including assumed capability in battery-material production, which is shorthand for mining and refining of critical metals and minerals needed to make EV batteries. Of course, this is a notoriously uncertain proposition given Canada’s dismal performance in bringing new mining-related infrastructure projects with EV-battery potential to fruition.

In fact, as the PBO notes, of the total “investment package” government modelled in calculating its “payback” date, only 8.6 per cent was directly related to battery production at the Volkswagen plant. More than 90 per cent was based on assumptions about developments outside of the subsidized battery-makers purview or control.

By contract, the PBO’s modelling of the investment cost-recovery focused only on “government revenues generated by cell and module manufacturing, upon which the production subsidies are based.” And unlike the government’s analysis, the PBO analysis starts when production is actually expected to begin at the new battery plants, which is not until sometime next year.

And yet, the PBO analysis remains quite generous as it excluded “public debt charges that would be incurred to finance the production subsidies” and simply accepted estimates of production capability by Stellantis and Volkswagen.

Clearly, the Trudeau government’s EV crusade is textbook bad public policy where the government attempts to pick winners and losers in the economy, in this case dependent on fanciful scenarios of future developments in global markets far outside Canada’s control. The crusade is also out of step with developments in the largest likely market for Canadian EVs and EV products—the United States, where car buyers are increasingly rejecting EVs despite heavy subsidies and massive government spending initiatives to promote EV manufacturing.

Governments in North America have been trying to push EVs over internal combustion vehicles for 30 years now, and it has not worked. EVs have consistently failed to compete with combustion vehicles on performance and cost, and failed to win broad consumer support despite oceans of government subsidies for manufacturers and buyers alike. It’s long past time for government to take off its rose-coloured glasses on the EV transition. There are better uses for government’s time and money. Getting people’s food and housing costs down, for example, might be a good place to start.

Author:

Kenneth P. Green

Senior Fellow, Fraser Institute

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Over two thirds of Canadians say Ottawa should reduce size of federal bureaucracy

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Over two thirds of Canadians say Ottawa should reduce size of federal bureaucracy

Published on October 15, 2025

Todayville

From the Fraser Institute

By Matthew Lau

From 2015 to 2024, headcount at Natural Resources Canada increased 39 per cent even though employment in Canada’s natural resources sector actually fell one per cent. Similarly, there was 382 per cent headcount growth at the federal department for Women and Gender Equality—obviously far higher than the actual growth in Canada’s female population.

According to a recent poll, there’s widespread support among Canadians for reducing the size of the federal bureaucracy. The support extends across the political spectrum. Among the political right, 82.8 per cent agree to reduce the federal bureaucracy compared to only 5.8 per cent who disagree (with the balance neither agreeing nor disagreeing); among political moderates 68.4 per cent agree and only 10.0 per cent disagree; and among the political left 44.8 per cent agree and 26.3 per cent disagree.

Taken together, “67 per cent agreed the federal bureaucracy should be significantly reduced. Only 12 per cent disagreed.” These results shouldn’t be surprising. The federal bureaucracy is ripe for cuts. From 2015 to 2024, the federal government added more than 110,000 new bureaucrats, a 43 per cent increase, which was nearly triple the rate of population growth.

This bureaucratic expansion was totally unjustified. From 2015 to 2024, headcount at Natural Resources Canada increased 39 per cent even though employment in Canada’s natural resources sector actually fell one per cent. Similarly, there was 382 per cent headcount growth at the federal department for Women and Gender Equality—obviously far higher than the actual growth in Canada’s female population. And there are many similar examples.

While in 2025 the number of federal public service jobs fell by three per cent, the cost of the federal bureaucracy actually increased as the number of fulltime equivalents, which accounts for whether those jobs were fulltime or part-time, went up. With the tax burden created by the federal bureaucracy rising so significantly in the past decade, it’s no wonder Canadians overwhelmingly support its reduction.

Another interesting poll result: “While 42 per cent of those surveyed supported the government using artificial intelligence tools to resolve bottlenecks in service delivery, 32 per cent opposed it, with 25 per cent on the fence.” The authors of the poll say the “plurality in favour is surprising, given the novelty of the technology.”

Yet if 67 per cent of Canadians agree with significantly shrinking the federal bureaucracy, then solid support for using AI to increasing efficiency should not be too surprising, even if the technology is relatively new. Separate research finds 58 per cent of Canadian workers say they use AI tools provided by their workplace, and although many of them do not necessarily use AI regularly, of those who report using AI the majority say it improves their productivity.

In fact, there’s massive potential for the government to leverage AI to increase efficiency and control labour expenses. According to a recent study by a think-tank at Toronto Metropolitan University (formerly known as Ryerson), while the federal public service and the overall Canadian workforce are similar in terms of the percentage of roles that could be made more productive by AI, federal employees were twice as likely (58 per cent versus 29 per cent) to have jobs “comprised of tasks that are more likely to be substituted or replaced” by AI.

The opportunity to improve public service efficiency and deliver massive savings to taxpayers is clearly there. However, whether the Carney government will take advantage of this opportunity is questionable. Unlike private businesses, which must continuously innovate and improve operational efficiency to compete in a free market, federal bureaucracies face no competition. As a result, there’s little pressure or incentive to reduce costs and increase efficiency, whether through AI or other process or organizational improvements.

In its upcoming budget and beyond, it would be a shame if the federal government does not, through AI or other changes, restrain the cost of its workforce. Taxpayers deserve, and clearly demand, a break from this ever-increasing burden.

Matthew Lau

Adjunct Scholar, Fraser Institute

Business

Former Trump Advisor Says US Must Stop UN ‘Net Zero’ Climate Tax On American Ships

Published on October 15, 2025

Todayville

From the Daily Caller News Foundation

By Stephen Moore

Later this week the United Nations will hold a vote on a multi-billion climate-change tax targeted squarely at American industry. Without quick and decisive action by the White House, this U.N. tax on fossil fuels will become international law.

This resolution before the International Maritime Organization will impose a carbon tax on cargo and cruise ships that carry $20 trillion of merchandise over international waters. Roughly 80% of the bulkage of world trade is transported by ship.

The resolution is intended to advance the very “net zero” carbon emissions standard that has knee-capped the European economies for years and that American voters have rejected.

This tax is clearly an unnecessary restraint on world trade, thus making all citizens of the world poorer.

It is also an international tax that would be applied to American vessels and, as such, is a dangerous precedent-setting assault on U.S. sovereignty. Since when are American businesses subject to international taxes imposed by the United Nations?

The U.S maritime industry believes the global tax would cost American shippers more than $100 billion over the next seven years if enacted.

Worst of all, if the resolution passes, it will require the retirement of older ships and enable a multi-billion-dollar wealth transfer to China, which has come to dominate shipbuilding in recent years. China STRONGLY supports the tax scheme, even though, ironically, no nation has emitted more pollutants into the atmosphere than they have. Yet WE are getting socked with a tax that indirectly pays for THEIR pollution.

Despite the fact that we pay a disproportionate share of the tax, the U.S. has almost no say on how the revenues are spent. This is the ultimate form of taxation without representation.

Even if the United States chooses not to implement the tax on domestic shipping, it will still be enforced by foreign ports of origin or destination as well as by flag states. As a result, American importers and exporters will be required to pay the tax regardless of domestic policy decisions.

Secretary of State Marco Rubio, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy have jointly stated that America “will not accept any international environmental agreement that unduly or unfairly burdens the United States or our businesses.” They call the financial impact on the U.S. of this global carbon tax “disastrous, with some estimates forecasting global shipping costs increasing as much as 10% or more.”

The U.S. maritime industry complains that although American vessels carry only about 12% of the globally shipped merchandise, U.S. flag vessels would bear almost 20% of this tax. No wonder China and Europe are for it. The EU nations get 17 yes votes to swamp the one no vote out of Washington.

Unfortunately, right now without White House pressure, we could lose this vote because of defections by our allies.

To prevent this tax, the White House should announce a set of retaliation measures. This could include a dollar-for-dollar reduction in U.S. payments to NATO, the U.N., IMF and World Bank.

At a time when financial markets are dealing with trade disputes, the last thing the world — least of all the United States — needs is a United Nations excise tax on trade.

Stephen Moore is co-founder of Unleash Prosperity and a former Trump senior economic advisor.