Corporate Welfare Disaster – Again

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Who would ever have thought that the massive subsidies that the federal and some provincial governments are providing with our tax dollars to giant Electric Vehicle (EV) battery plants would become so controversial, so soon? According to some recent news revelations, it seems like pretty much everyone with a brain. 

So far, the Parliamentary Budget Officer (PBO) has estimated that the subsidies already committed to a handful of EV battery plants across Canada is about $50 billion. To put this number in perspective, it represents about three times the annual production of the entire Canadian auto industry. In other words, seriously big bucks. Since every Canadian government is deep in debt, these so-called “investments” will be financed by borrowed funds. The recent revelation that one of the recipients of about $15 billion of our money – the Stellantis and LG joint venture called NextStar Energy – is importing labour from South Korea to work at the EV battery factory planned for Windsor, Ontario. 

So many questions arise out of this news. These types of corporate subsidies are always justified on the basis of the many good jobs they will be creating for Canadians. The Windsor facility was advertised by government and the companies involved to provide about 2,500 well-paid jobs for Ontarians. Yet the recent news indicated that there were already a number of South Koreans who had been brought into Canada to work at the new plant, all under the Temporary Foreign Worker (TFW) program. As LG is a South Korean company, this may not come as a big surprise that a handful of people had come from the foreign head office to help set up the new operation. However, last week Windsor police noted they had met with the South Korean Ambassador about the prospect of 1,600 South Koreans coming into the city and living in their community in 2024. The plot thickens. 

The Ontario government responded to this news with the usual confidentiality defense, stating the need to keep details secret because of the contract with Stellantis. Other information suggested that the company had made inquiries about whether it could access the TFW program prior to committing to the undertaking. Maybe that should have been our first clue that something was amiss. 

The notion that any government should be able to be so secretive about a very large expenditure of taxpayer dollars with apparently no accountability should be greatly disturbing to Canadians. Also, some sources said that the companies involved looked into using foreign workers because the availability of adequately-trained domestic workers was insufficient. Yet this was not at all part of the sales job that governments spun to Canadians, who were told that it would be Canadian workers benefitting from this enormous subsidy to profitable foreign automobile companies that don’t really need the money but who are happy to take the goodies offered. 

The response to these revelations of foreign labour imports by the union involved, Unifor, was amazingly tame. Unifor usually comes to the table with all guns blazing, but in this case merely commented along the lines that they’d have to look into the situation and that of course Canadian workers should be employed. But the reality is that even if the new factory is full of foreign workers, Unifor will still be paid their union dues so will receive their pound of flesh no matter what. These days, it seems unions care more about pursuing their chosen political causes – look at their involvement in things such as the war between Israel and Hamas for example – than actually defending Canadian workers. 

I have spoken with many Canadian business owners over the years who say when one of their plants had to close because of the uncompetitiveness of the Canadian economy versus other locations and the relatively high compensation packages of the Canadian workers, they found the union involved made no effort to actually make some compromises to save the Canadian jobs involved but rather just busied themselves with the paperwork to detail severance agreements etc. Of course the union employees were not losing their jobs, just the workers they were supposed to represent. 

These expensive EV battery projects have been questionable from the get-go. The whole notion of government picking winners has been a losing strategy for decades, and this latest and very costly example shows every sign of disaster as well. Around the world, consumer demand for EVs is falling and automakers are reducing their investments in EVs. Recently, the Ford Motor Company stated that they were losing fully $37,000 for each EV they sold. Does anyone seriously think this is sustainable for any business, no matter how heavily subsidized by our tax dollars? 

Governments need to realize they cannot just mandate that people have to buy EVs to suit their dubious goals, but that supply and demand really do matter and if consumers don’t want something, no amount of government persuasion will change that. It’s time for Canadians to vote with their feet and their wallets, and stop supporting these ridiculous and self-destructive policies implemented in our name and with our money by so many governments.


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