This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, April 27, 2023
The world has U.S. President Joe Biden to thank for launching a massive global subsidy war for green energy projects. Federal Finance Minister Chrystia Freeland is right to express her concerns about a race to the bottom, although this is not stopping Canada from joining in. The question is whether the world can get out of a crazy war before it does more harm than good.
The latest example is the mind-blowing subsidy for Volkswagen’s Ontario operation that will export batteries for VWs produced in the United States. Canadian and Ontario taxpayers will be on the hook for $13.2 billion in manufacturing tax credits, as well as a $700-million federal grant. With VW putting up only $7 billion, almost two thirds of the cost — and risk — will fall on Canadian taxpayers. Overall, Canada is paying an astounding $4.7 million for each of the new 3000 VW employees. You can bet our contribution will also boost VW’s profit line.
The claim is that the money will make Canada a powerhouse in EV battery production, creating thousands of direct and indirect jobs. The prime minister predicts the project will pay for itself in five years.