Fraser Institute
Trudeau and Ford should attach personal fortunes to EV corporate welfare
From the Fraser Institute
By Jason Clemens and Tegan Hill
Last week, with their latest tranche of corporate welfare for the electric vehicle (EV) sector, the Trudeau and Ford governments announced a $5.0 billion subsidy for Honda to help build an EV battery plant and ultimately manufacture EVs in Ontario. Here’s a challenge: if politicians in both governments truly believe these measures are in the public interest, they should tie their personal fortunes with the outcomes of these subsidies (a.k.a. corporate welfare).
One of the major challenges with corporate welfare is the horrendous economic incentives. The politicians and bureaucrats who distribute corporate welfare have no vested financial interest in the outcome of the program. Whether these programs are spectacularly successful (or more likely spectacular failures), the politicians and bureaucrats experience no direct financial gain or loss. Simply put, they’re investing taxpayer money, not their own.
Put differently, the discipline imposed on investors in private markets, such as the risk of losing money or even going out of business, is wholly absent in the government sector. Indeed, the history of corporate welfare in Canada, at both the federal and provincial levels, is rife with abject failures due in large measure to the absence of this investing discipline.
In the last 12 months in Ontario, automakers have been major beneficiaries of corporate welfare. The $5.0 billion for Honda is on top of $13.2 billion to Volkswagen and $15.0 billion to Stellantis. That equates to roughly $979 per taxpayer nationally for federal subsidies and an additional $1,372 for Ontario taxpayers. And these figures do not include the debt interest costs that will be incurred as both governments are borrowing money to finance the subsidies.
And there’s legitimate reason to be skeptical already of the potential success of these largescale industrial interventions by the federal (Liberal) and Ontario (Conservative) governments. EV sales in both Canada and the United States have not grown as expected by governments despite purchase subsidies. Disappointing EV sales have led several auto manufacturers including Toyota and Ford to scale-back their EV production plans.
There are also real concerns about the practical ability of EV manufacturers to secure required materials. Consider the minerals needed for EV batteries. According to a recent study, 388 new mines—including 50 lithium mines, 60 nickel mines and 17 cobalt mines—would be required by 2030 to meet EV adoption commitments by various governments. For perspective, there were a total of 340 metal mines operating across Canada and the U.S. in 2021. The massive task of finding, constructing and developing this level of new mines seems impractical and unattainable, meaning that EV plants being built now will struggle to secure needed inputs. Indeed, depending on the type of mine, it takes anywhere from six to 18 years to develop.
Which brings us back to the Trudeau and Ford governments. Given the economic incentive problems and practical challenges to a large-scale transition to EVs, would members of the Trudeau and Ford governments—including the prime minister and premier—want to attach a portion of their personal pensions to the success of these corporate welfare programs?
More specifically, assume an arrangement whereby those politicians would share the benefits of the program’s success but also share any losses through the value of their pensions. If the programs work as marketed, the politicians would enjoy higher valued pensions. But if the programs disappoint or even fail, their pensions would be reduced or even cancelled. Would these politicians still support billions in corporate handouts if their personal financial wellbeing was tied to the outcomes?
As the funding of private companies to develop the EV sector in Ontario continues with the support of taxpayer subsidies, Ontarians and all Canadians should consider the misalignment of economic incentives underpinning these subsidies and the practical challenges to the success of this industrial intervention.
Authors:
Community
Charitable giving on the decline in Canada
From the Fraser Institute
By Jake Fuss and Grady Munro
There would have been 1.5 million more Canadians who donated to charity in 2023—and $755.5 million more in donations—had Canadians given to the same extent they did 10 years prior
According to recent polling, approximately one in five Canadians have skipped paying a bill over the past year so they can buy groceries. As families are increasingly hard-pressed to make ends meet, this undoubtedly means more and more people must seek out food banks, shelters and other charitable organizations to meet their basic necessities.
And each year, Canadians across the country donate their time and money to charities to help those in need—particularly around the holiday season. Yet at a time when the relatively high cost of living means these organizations need more resources, new data published by the Fraser Institute shows that the level of charitable giving in Canada is actually falling.
Specifically, over the last 10 years (2013 to 2023, the latest year of available data) the share of tax-filers who reported donating to charity fell from 21.9 per cent to 16.8 per cent. And while fewer Canadians are donating to charity, they’re also donating a smaller share of their income—during the same 10-year period, the share of aggregate income donated to charity fell from 0.55 per cent to 0.52 per cent.
To put this decline into perspective, consider this: there would have been 1.5 million more Canadians who donated to charity in 2023—and $755.5 million more in donations—had Canadians given to the same extent they did 10 years prior. Simply put, this long-standing decline in charitable giving in Canada ultimately limits the resources available for charities to help those in need.
On the bright side, despite the worrying long-term trends, the share of aggregate income donated to charity recently increased from 0.50 per cent in 2022 to 0.52 per cent in 2023. While this may seem like a marginal improvement, 0.02 per cent of aggregate income for all Canadians in 2023 was $255.7 million.
The provinces also reflect the national trends. From 2013 to 2023, every province saw a decline in the share of tax-filers donating to charity. These declines ranged from 15.4 per cent in Quebec to 31.4 per cent in Prince Edward Island.
Similarly, almost every province recorded a drop in the share of aggregate income donated to charity, with the largest being the 24.7 per cent decline seen in P.E.I. The only province to buck this trend was Alberta, which saw a 3.9 per cent increase in the share of aggregate income donated over the decade.
Just as Canada as a whole saw a recent improvement in the share of aggregate income donated, so too did many of the provinces. Indeed, seven provinces (except Manitoba, Nova Scotia and Newfoundland and Labrador) saw an increase in the share of aggregate income donated to charity from 2022 to 2023, with the largest increases occurring in Saskatchewan (7.9 per cent) and Alberta (6.7 per cent).
Canadians also volunteer their time to help those in need, yet the latest data show that volunteerism is also on the wane. According to Statistics Canada, the share of Canadians who volunteered (both formally and informally) fell by 8 per cent from 2018 to 2023. And the total numbers of hours volunteered (again, both formal and informal) fell by 18 per cent over that same period.
With many Canadians struggling to make ends meet, food banks, shelters and other charitable organizations play a critical role in providing basic necessities to those in need. Yet charitable giving—which provides resources for these charities—has long been on the decline. Hopefully, we’ll see this trend turn around swiftly.
Alberta
Schools should go back to basics to mitigate effects of AI
From the Fraser Institute
Odds are, you can’t tell whether this sentence was written by AI. Schools across Canada face the same problem. And happily, some are finding simple solutions.
Manitoba’s Division Scolaire Franco-Manitobaine recently issued new guidelines for teachers, to only assign optional homework and reading in grades Kindergarten to six, and limit homework in grades seven to 12. The reason? The proliferation of generative artificial intelligence (AI) chatbots such as ChatGPT make it very difficult for teachers, juggling a heavy workload, to discern genuine student work from AI-generated text. In fact, according to Division superintendent Alain Laberge, “Most of the [after-school assignment] submissions, we find, are coming from AI, to be quite honest.”
This problem isn’t limited to Manitoba, of course.
Two provincial doors down, in Alberta, new data analysis revealed that high school report card grades are rising while scores on provincewide assessments are not—particularly since 2022, the year ChatGPT was released. Report cards account for take-home work, while standardized tests are written in person, in the presence of teaching staff.
Specifically, from 2016 to 2019, the average standardized test score in Alberta across a range of subjects was 64 while the report card grade was 73.3—or 9.3 percentage points higher). From 2022 and 2024, the gap increased to 12.5 percentage points. (Data for 2020 and 2021 are unavailable due to COVID school closures.)
In lieu of take-home work, the Division Scolaire Franco-Manitobaine recommends nightly reading for students, which is a great idea. Having students read nightly doesn’t cost schools a dime but it’s strongly associated with improving academic outcomes.
According to a Programme for International Student Assessment (PISA) analysis of 174,000 student scores across 32 countries, the connection between daily reading and literacy was “moderately strong and meaningful,” and reading engagement affects reading achievement more than the socioeconomic status, gender or family structure of students.
All of this points to an undeniable shift in education—that is, teachers are losing a once-valuable tool (homework) and shifting more work back into the classroom. And while new technologies will continue to change the education landscape in heretofore unknown ways, one time-tested winning strategy is to go back to basics.
And some of “the basics” have slipped rapidly away. Some college students in elite universities arrive on campus never having read an entire book. Many university professors bemoan the newfound inability of students to write essays or deconstruct basic story components. Canada’s average PISA scores—a test of 15-year-olds in math, reading and science—have plummeted. In math, student test scores have dropped 35 points—the PISA equivalent of nearly two years of lost learning—in the last two decades. In reading, students have fallen about one year behind while science scores dropped moderately.
The decline in Canadian student achievement predates the widespread access of generative AI, but AI complicates the problem. Again, the solution needn’t be costly or complicated. There’s a reason why many tech CEOs famously send their children to screen-free schools. If technology is too tempting, in or outside of class, students should write with a pencil and paper. If ChatGPT is too hard to detect (and we know it is, because even AI often can’t accurately detect AI), in-class essays and assignments make sense.
And crucially, standardized tests provide the most reliable equitable measure of student progress, and if properly monitored, they’re AI-proof. Yet standardized testing is on the wane in Canada, thanks to long-standing attacks from teacher unions and other opponents, and despite broad support from parents. Now more than ever, parents and educators require reliable data to access the ability of students. Standardized testing varies widely among the provinces, but parents in every province should demand a strong standardized testing regime.
AI may be here to stay and it may play a large role in the future of education. But if schools deprive students of the ability to read books, structure clear sentences, correspond organically with other humans and complete their own work, they will do students no favours. The best way to ensure kids are “future ready”—to borrow a phrase oft-used to justify seesawing educational tech trends—is to school them in the basics.
-
Censorship Industrial Complex1 day agoDeath by a thousand clicks – government censorship of Canada’s internet
-
Daily Caller1 day agoChinese Billionaire Tried To Build US-Born Baby Empire As Overseas Elites Turn To American Surrogates
-
Great Reset1 day agoViral TikTok video shows 7-year-old cuddling great-grandfather before he’s euthanized
-
Automotive2 days agoPoliticians should be honest about environmental pros and cons of electric vehicles
-
Digital ID1 day agoCanada releases new digital ID app for personal documents despite privacy concerns
-
Community1 day agoCharitable giving on the decline in Canada
-
Alberta1 day agoSchools should go back to basics to mitigate effects of AI
-
Alberta4 hours agoAlberta’s huge oil sands reserves dwarf U.S. shale


