Canada’s budget watchdog is warning that spending on the electric vehicle race is speeding out of control like a malfunctioning self-driving car.
Driving the news: The federal government says that it and the provinces have spent $46.1 billion so far to build the country’s EV supply chain. A new Parliamentary Budget Officer (PBO) report begs to differ; it suggests that the number is likely closer to $52.5 billion, which is over $6.3 billion higher than what private auto companies have invested in the sector.
- Over the past two or so years, Canada has attracted multiple EV battery and part factories, most recently a trio of Honda factories, which will get $5 billion in incentives.
Why it matters: Critics think Canada’s strategy of subsidizing EV infrastructure is too costly and unsustainable in the face of competition from the U.S.
- A previous PBO report found that it would take 20 years for the Stellantis and Volkswagen EV battery plants in Ontario to break even for the provincial and federal governments.
Bottom line: Investments could still pay off if the EV shift kicks into a higher gear. In April, the federal government received a record 19,162 EV rebate claims — a 157% bump from the year before.—QH