Honda gets billions in public funds to expand EV production
Episode Stats
Words per Minute
206.77168
Summary
In this episode of The Andrew Lawton Show, host Andrew Lawton is joined by the Director of the Domestic Policy Program at the Macdonald laurier institute, Arron Woodrick, to discuss a recent announcement from the government of Canada and the province of Ontario regarding Honda's plans to invest $5 billion in electric vehicle manufacturing plants in Ontario.
Transcript
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
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