From the Fraser Institute

By Kenneth P. Green

Asian countries such as China and Japan were not particular threats to prior automotive markets because North America’s massive and diverse internal combustion vehicle markets were capable of relatively lower-cost production of superior quality vehicles. That’s not shaping up to be the case for EVs, which are vastly more expensive coming off North American assembly lines than in China and other Asian countries.

Seemingly every week, Canada’s electric vehicle (EV) transition policy framework grows more incoherent. The goal of Canada’s EV policy is to ensure all new light-duty vehicle sales in Canada are zero-emission vehicles (ZEVs), with a strong emphasis on battery-electric vehicles, by 2035.

The latest incoherence is Prime Minister Trudeau’s announcement of 100 per cent tariffs on Chinese EV imports and 25 per cent tariffs on Chinese steel and aluminum imports (the Canada needs to build EVs). This will directly undercut the government’s EV transition targets by denying Canadians access to affordable electric cars.

The stated rationale for the tariffs is, according to Finance Minister Chrystia Freeland, that the “Chinese are trying to corner the North American EV market by dumping subsidized vehicles into it” and that “China has an intentional, state-directed policy of overcapacity and oversupply designed to cripple our own industry” so “we simply will not allow that to happen to our EV sector.” And arguably, some of that is probably reasonable.

Tariffs are generally understood as protectionist mechanisms, designed to shield domestic industries from lower-cost foreign competition by making imported goods more expensive. Additionally, they can serve as punitive measures to penalize countries for hostile economic or political actions. By limiting access to one’s markets, tariffs can reduce the profits of the targeted country, thereby pressuring it to alter behaviours or policies. When imposed against countries intentionally sabotaging markets, tariffs may be considered a legitimate response.

But tariffs on China will also hurt Canadians by keeping lower-cost goods out of our market, leaving them with only higher-priced goods and services provided by protected domestic industries that need not fear price competition and thus feel little pressure to lower the prices for their goods and services.

And this is part of the incoherence of the new Trudeau tariff policy. The Trudeau EV mandates are set to create, in essence, a monopoly on the types of automotive technologies (again, EVs) allowed to be used in Canada, which other countries can manufacture more cheaply than domestic manufacturers. Asian countries such as China and Japan were not particular threats to prior automotive markets because North America’s massive and diverse internal combustion vehicle markets were capable of relatively lower-cost production of superior quality vehicles. That’s not shaping up to be the case for EVs, which are vastly more expensive coming off North American assembly lines than in China and other Asian countries.

By driving up the costs of buying EVs in Canada, the Trudeau government will directly undercut its EVs-by-2035 mandate. If people can’t afford EVs, as most currently cannot, the EV mandate targets are doomed. People will simply hold their old internal-combustion vehicles for longer. This trend is already observable in the United States where new vehicles have become more expensive. Americans are holding on to their vehicles longer than ever, with the average vehicle age reaching 13.6 years.

The Trudeau government’s highest priority has been the war on climate change, which various government leaders in Canada and around the world have proclaimed the greatest threat to people and the planet in human history. But if the government is sincere about this, then the priority should be to maximize Canadians’ access to cheaper EVs, and the prime minister should be largely indifferent to where Canadians choose to source those EVs. Indeed, he should urgently want low-cost EVs available to Canadians for there to be any hope of achieving his all-EV by 2035 goal.

From the Fraser Institute

By Matthew Lau

Why do we need 80 per cent more bureaucrats to regulate and centrally plan employment in Canada when total employment is only up 15 per cent?

The increased bureaucratization and socialization of Canada’s economy since 2015 is well illustrated by the Treasury Board of Canada secretariat’s new statistics on the federal public service. All across the economy there’s massive bureaucratic expansion to fulfill political demands while the private sector, which fulfills consumer demands for goods and services, is crowded out and its relative importance reduced.

There are now 39,089 federal employees at Employment and Social Development Canada, up 80 per cent from 2015. Meanwhile, total employment in Canada across all industries is up only 15 per cent. Why do we need 80 per cent more bureaucrats to regulate and centrally plan employment in Canada when total employment is only up 15 per cent?

Next, consider the agriculture sector. From 2015 to 2024, the headcount at the federal department of Agriculture and Agri-Food increased 11 per cent while total employment in agriculture fell 18 per cent. That’s 11 per cent more agricultural bureaucrats and central planners while the number of people actually producing agricultural goods is down 18 per cent.

Considering dairy in particular, there are now 75 people employed at the Canadian Dairy Commission, up 34 per cent versus 2015. Meanwhile the number of dairy cows in Canada as of 2023 (the latest year of available data) is only up two per cent versus 2015, and the number of farms that ship milk is actually down 20 per cent. So, 34 per cent more dairy bureaucrats versus two per cent more dairy cows and 20 per cent fewer dairy farms.

Similarly, the Canadian Transportation Agency’s headcount rocketed to 377 in 2024, up 20 per cent from the prior year and up 56 per cent since 2015. Yet since 2015, total employment in transportation and warehousing in Canada increased by a much more modest 17 per cent.

In 2024, a year with no federal election scheduled, there are 1,250 employees at Elections Canada, nearly double the headcount of 630 in 2015, which had a federal election. But while the number of Elections Canada employees has nearly doubled, the number of voters in Canada has not. From 2015 to 2024, Canada’s population increase is about 14 per cent.

Another example: Fisheries and Oceans Canada now employs 14,716 people, up 49 per cent since 2015, and Natural Resources Canada now employs 5,751 people, up 39 per cent since 2015. Meanwhile the number of Canadians employed in natural resources (more specifically, forestry, fishing, mining, quarrying, and oil and gas) is actually down one per cent since 2015.

As of 2024, the federal department for Women and Gender Equality employs 443 people, up 382 per cent versus 2015. But if the number of women in Canada has gone up 382 per cent in the same time period, this is nowhere reflected in any of the population statistics published by Statistics Canada—a government agency whose own headcount as of 2024 is up 48 per cent since 2015.

And total employment in our federal public administration (and separate agencies) is up 43 per cent (from 257,000 to 368,000) from 2015 to 2024. So we’re not just cherry-picking.

But perhaps the most depressing statistic from the Treasury Board of Canada secretariat’s report is the headcount growth at the Canada Revenue Agency.

There are now 59,155 people employed at the CRA as of 2024, up 48 per cent since 2015—a stark reminder of this federal government’s enthusiasm for raising taxes and expanding government control.