Prime Minister Justin Trudeau’s climate change policies could be thrown into chaos if former president Donald Trump wins the U.S. election on Nov. 5 and makes good on two things he promised in his speech to the Republican National Convention in Milwaukee last week.
First, Trump would end the multi-billion-dollar U.S. government subsidy program for green energy, which he described as the “green new scam” contained in President Joe Biden’s Inflation Reduction Act (IRA), and transfer the remaining funds to infrastructure projects such as building roads, bridges and dams.
Second, Trump said he would end U.S. EV mandates on “Day One” of his presidency.
“We will end the ridiculous and actually incredible waste of taxpayer dollars that is fuelling the inflation crisis,” Trump said.
“They (Biden and the Democrats) spent trillions of dollars on things having to do with the green new scam. It’s a scam. And that’s caused tremendous inflationary pressures in addition to the cost of energy and all of the trillions of dollars that are sitting there not yet spent.
“We will redirect that money for important projects like roads, bridges, dams and we will not allow it to be spent on meaningless green new scam ideas.”
In addition, Trump said: “I will end the electric vehicle mandate on day one, thereby saving the U.S. auto industry from complete obliteration which is happening right now. And saving us customers thousands and thousands of dollars per car …”
“This crazy electric mandate, if you’re going to do this and – by the way, I’m all for electric, they have their application – but if somebody wants to buy a gas-powered car … or a hybrid, they’re going to be able to do it. And we’re going to make that change on day one.”
The problems for the Trudeau government are two-fold if Trump makes good on these pledges.
First, a substantial portion of the up $ $52.5 billion – according to the Parliamentary Budget Officer – our federal and provincial governments have earmarked to subsidize 13 private sector projects across Canada aimed at creating an EV vehicle and battery supply chain industry here is contingent on the U.S. having a similar policy in place.
For example, the deals announced last year of up to $15 billion the Trudeau and Doug Ford Ontario governments have earmarked for performance incentives to Stellantis-LGS to build an EV battery plant in Windsor and up to $13 billion to Volkswagen Group to build an EV battery plant in St. Thomas are contingent on the IRA remaining in place.
“The operating expenses provided will only be available for as long as the U.S. Inflation Reduction Act incentives remain in effect”, according to both deals.
Last week, Ford Motor Co. announced it’s moving away from producing EV vehicles in Oakville in favour of gasoline-powered pickup trucks.
The federal and Ontario governments announced $590 million in public support for the EV conversion in 2020, with the understanding vehicles would start rolling off the production line in 2025.
That was later moved back to 2027, prior to last week’s announcement.
Defenders of the new deal say it will ultimately result in more jobs and a faster return to work for plant employees than under the previous agreement, although the fate of the public investment to produce EVs is unclear.
Finally, if Trump wins the U.S. election and scraps Biden’s mandate to have EVs make up two-thirds of new car sales in the U.S, in 2032, it will negatively impact the Trudeau government’s goal of mandating 100% of new car sales in Canada being EVs in 2035.
The problem for Canada is that its climate change and clean energy policies have continually been out of synch with the U.S., resulting in the situation today where Canada has a national carbon tax while the U.S. – our largest trading partner – does not.
In addition, massive federal and provincial government subsidies to Canada’s green energy sector have mainly been driven by a bidding war with the U.S. due to Biden’s Inflation Reduction Act, a policy that could now be scrapped by Trump, if he wins in November, requiring another enormous shift in Canada’s climate policies if we want to remain competitive with our largest trading partner.