Juno News - Honda gets billions in public funds to expand EV production

00:00:00.000 you're tuned in to the andrew lawton show

00:00:05.920 let's shift gears here no pun intended to yet another big ticket automotive funding announcement

00:00:15.560 from the federal government in canada and also the provincial government in ontario

00:00:19.560 justin trudeau stood and made this proclamation about honda today

00:00:24.180 today honda is making canadian automotive history with this announcement we will be investing

00:00:33.420 to create canada's first comprehensive electric vehicle supply chain from start to finish

00:00:41.300 aujourd'hui on annonce que honda va investir pour créer la première chaîne d'approvisionnement

00:00:48.040 complète de véhicules électriques au canada a whole ecosystem will be built with four

00:00:55.440 new manufacturing plants in ontario including an ev assembly plant a stand-alone battery

00:01:01.840 manufacturing plant and two plants for battery components these investments will create well

00:01:09.140 over a thousand well-paying manufacturing jobs as well as many many construction jobs and

00:01:16.760 of course jobs all across ontario and the country for auto parts suppliers but this announcement

00:01:24.660 isn't just about creating jobs it's about securing good jobs and careers for the coming decades

00:01:32.920 and even the coming generations honda has set a goal to make evs represent a hundred percent

00:01:39.960 of vehicle sales by 2040 in canada our target is that a hundred percent of all light duty cars

00:01:47.460 and passenger truck sales be zero emission by 2035 and that underlines what we've always

00:01:55.060 said climate policy is economic policy and with its impact on families and communities around

00:02:03.420 here it's also social policy wow it sounds phenomenal it's social policy it's environmental policy it's

00:02:12.640 economic policy it's great you notice in that announcement he mentioned that honda is investing

00:02:18.600 15 billion dollars he's there announcing honda's investment honda's putting the money forward well look

00:02:24.220 i think of honda wants to spend 15 billion dollars and build four electric vehicle plans in ontario

00:02:29.420 that's great but it isn't just honda that is putting money towards this this part has been

00:02:35.440 buried a little bit even in the government press release it's way way way down below what honda's

00:02:40.380 putting up it's what you and i are putting up aaron woodrick is with me he is the head of the domestic

00:02:45.280 policy program over at the mcdonald laurier institute aaron what's uh what are we missing here it's not

00:02:50.800 just honda's money is it no it's not and you you wondered if it was honda's money what on earth would

00:02:55.880 all these politicians be be doing they're stepping up to a podium it's great if you have a company that

00:03:00.460 wants to invest that kind of money in canada that's a great sign but of course the devil's in

00:03:04.840 the details and it turns out andrew you and i and other taxpayers in canada ontario we're on the hook

00:03:10.180 for 5 billion out of that 15 billion so a whole third of that is going to be coming out of our pockets

00:03:16.440 uh to go to honda who are doing okay i checked this morning when i saw the announcement you know they

00:03:21.160 made 8 billion u.s in global profit last year so this is not a company that is hard done by this

00:03:26.820 is clearly a company that's got the resources to invest their own money which is great and they

00:03:30.940 should do that and we should welcome that uh but that does not explain why canadian taxpayers are

00:03:36.160 being forced to stick 5 billion of their own money uh you know that we pay taxes for public services

00:03:41.040 andrew uh instead they're turning around and giving it to a very profitable uh multinational

00:03:45.600 corporation i i don't consider myself to be a mathematician i you know always double check

00:03:51.220 with a calculator to make sure i'm not getting anything right but i was told that this would

00:03:54.920 create a thousand jobs now you may think okay a thousand jobs that's phenomenal and i remember

00:03:59.440 billions are the ones with nine zeros so i can i can work back from there uh that works out to be

00:04:05.260 again correct my math here five million dollars per job that's exactly right and andrew it is as crazy

00:04:12.820 as it sounds people might say well that doesn't sound quite right well it is right they are

00:04:16.960 actually subsidizing the equivalent of five million dollars per job so you heard the prime minister

00:04:21.860 there he said they'd be well-paying jobs boy i hope they're really well-paying jobs if we're paying

00:04:26.060 five million bucks a pop just to create them yeah and and again i mean not that i'm recommending this

00:04:31.500 as policy but it would literally be cheaper just to walk around alveston and give everyone a million

00:04:37.160 dollars and would probably have more of an economic benefit uh because then at least their people are 1.00

00:04:41.700 spending it like this is absurd and there's no roi on this like you'll never make that money back

00:04:46.740 no and look uh you know the the government always has i know all the lines right now if you're

00:04:52.060 familiar with these types of announcements you can pretty much sing the song um they're going to

00:04:56.060 talk about spin-offs they're going to talk about you know other impacts in the community but the

00:05:00.080 reality is we are paying these companies to create these jobs you know andrew when i hear

00:05:03.740 politicians talk about good paying jobs and the importance of them that's always on the

00:05:07.620 presumption that they're being generated by the private sector if you're going in and essentially

00:05:11.780 paying the salary of these people for the company it's not really a private sector job it's essentially

00:05:16.880 a government job masquerading as a private sector job that has a very different impact a very different

00:05:21.820 impact on the bottom line of the government right the whole reason we want these jobs is because they

00:05:26.280 generate tax revenue that we can spend on public services instead these kinds of announcements

00:05:31.260 they are taking resources out things we're not spending on things like roads and hospitals and schools

00:05:36.320 and the kinds of things you expect your tax money is supposed to go towards well and the other part

00:05:40.440 of it too is that the companies themselves tend to have very little in the way of oversight to maximize

00:05:46.800 how many jobs they're creating i mean one big example this week has been the letter from the union

00:05:51.960 representing a lot of workers at the uh stellantis plant in windsor that they're being that they're

00:05:56.300 building and they're saying well hold on we were told this was going to be to create canadian jobs yet

00:06:00.300 we're seeing a large number of foreign workers that are being brought in uh so korean workers are

00:06:05.820 benefiting from this money that the federal and provincial governments have given to uh stellantis

00:06:10.860 and lg and of course the government says oh well it's you know specialized skills and whatnot

00:06:15.060 uh and then you have oakville and ford again a heavily subsidized ev battery plant delayed

00:06:20.400 i think until 2027 so now you have a company that is for business reasons as it's permitted to do

00:06:26.540 uh dragging its heels on this so we're not even getting the benefit of these jobs that we were all

00:06:31.120 promised and this is happening time and time again in these cases where it's not even like

00:06:35.340 that core deliverable even pans out well it never does and it's because it comes down to the fact

00:06:40.380 the government is trying to they're trying to do central planning here within it with what who's

00:06:43.860 supposed to be a private actor i mean just the very fact that you're setting a number saying you

00:06:48.300 have to hire a thousand people well companies normally hire based on what they need right they

00:06:52.420 hire or let people go based on their economic need what makes sense for them what they can afford

00:06:56.480 the government sets this number i mean it doesn't make sense to tell a company you have to hire

00:07:00.800 exactly a thousand people or you don't mean i mean it is just completely undermines uh the the very

00:07:06.020 ethos of like a private sector company the other thing andrew that i noticed that was interesting is

00:07:10.180 they mentioned in the press release that it's not just about the thousand new jobs which by the way

00:07:14.540 are often just jobs taken from other sectors they're not net new jobs they talk about uh retaining

00:07:19.920 existing jobs so that starts to sound to me a lot like uh something like a ransom fee right

00:07:25.860 you've got four thousand people already employed at this plant you know be a real shame if something

00:07:30.520 happened to those jobs if we don't get this handout so i i find that a very troubling development

00:07:34.900 one of the arguments that you always get from people on this and i'm curious how you refute it

00:07:40.240 is this idea that well this is just the rule these are the rules of the game and is that if we don't

00:07:45.200 uh you know iowa is going to or uh new york state is going to and we we just don't get any of it and i this

00:07:51.740 was you saw this particularly exploited by amazon when they were launching their you know amazon

00:07:57.240 headquarters and they basically just put out this open call hey who's going to pay us the most to uh

00:08:02.000 to set up shop there uh but what is the answer to that because no one likes this idea that you know

00:08:07.020 we just say all right we're not going to play this game all right well everyone's going somewhere else

00:08:11.000 yeah well two things one it's hard to blame companies for this when governments signal that

00:08:16.000 they're willing to play the game they get taught to do this right they get taught that like i should look

00:08:19.940 for the handout frankly because what if my competitor does and i don't i'm kind of then i'm

00:08:23.600 on the back foot uh look the short answer is there's this assumption always that we need to be

00:08:27.600 in that line of work right like we have to outbid the americans on aerospace or we won't be able to

00:08:32.220 build planes here we need to outbid the americans on evs or we won't be able to well it's just it's just

00:08:36.820 assumed that we need to be in the business of building evs i'm sure it's nice to be in the business of

00:08:41.040 building evs if it makes economic sense but to be in it for the sake of it if it costs you more to be in it

00:08:46.640 than you get from being in it it doesn't make any sense and the example we always use and others

00:08:50.820 have pointed this out is australia i mean australia used to be a place where they built cars eventually

00:08:55.680 they just gave up because they didn't want to play this game guess what happened there was no recession

00:09:00.140 there was no mass unemployment there was no guess it's just that the capital went into other industries

00:09:04.540 and jobs and companies were created in other sectors so this myth that if we lose you know building

00:09:10.460 cars we don't build cars in canada there will be this huge hole it's simply not true it is not played

00:09:14.940 out anywhere else and you know we have to start pushing back on this assumption that we must be

00:09:20.300 in the business of doing this one specific thing well and the other aspect too and i played that

00:09:24.980 clip before you came on of justin trudeau saying this isn't just an economic policy but it's an

00:09:29.180 environmental policy and a social policy i mean he thinks that's a good thing i think that makes it

00:09:33.940 worse because it means the government is trying to inject almost like a a social engineering into what

00:09:39.380 could be and should be economic policy and i think on electric vehicles that's particularly

00:09:44.060 concerning because we have huge issues with electric vehicles you have a declining consumer

00:09:49.500 interest in them it's not to say that they won't eventually become the thing that everyone uses but

00:09:54.080 we're not there right now so government is trying to manipulate the market and create a supply when

00:10:01.120 there isn't a demand there so it's not even like for setting aside the moral question of whether

00:10:05.700 uh you know corporate welfare is good it's not even like they're targeting it in a way that is

00:10:10.840 particularly sustainable this is still an emerging industry absolutely they're wasting a vast amount

00:10:16.080 of resources pursuing that social goal and i mean you can agree or disagree with that goal but the

00:10:20.160 amount of resources they're deploying uh towards it are massive right i mean i followed the bombardier

00:10:24.720 file for close to a decade and the amount of money we're talking about on the ev files about 10 times

00:10:29.720 you know what what got sunk into bombardier which was itself a disaster so it's it's a huge sum of money

00:10:35.340 in pursuit of a goal that you know uh i don't think i mean i don't have a problem with electric

00:10:39.680 vehicles but the you know they're going to become prominent when the market says so when they make

00:10:43.700 sense for most people when the price comes down when the infrastructure is in place it's not going

00:10:47.800 to happen by government fiat it's not going to happen because the government subsidizes the heck out

00:10:52.000 of the production and the purchase uh you know and and lays down this fiat that's saying we have to

00:10:56.540 have it by this date so this government is trying to speed something along that has to happen at its own

00:11:01.120 pace the market is going to see to it and they're wasting a massive amount of resources along the way

00:11:05.880 aaron woodrick from the mcdonald laurie institute always a pleasure sir thanks a lot andrew thanks

00:11:11.660 for listening to the andrew lawton show support the program by donating to true north at www.tnc.news

Juno News - April 28, 2024

Honda gets billions in public funds to expand EV production

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