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Canada's minister for innovation, science and industry, François-Philippe Champagne, continues to defend his government's increasingly embattled $100 billion strategy to build an electric vehicle (EV) industry, claiming his critics lack “vision and ambition.”
The development of a Canadian EV ecosystem, from mining of critical minerals used in vehicle batteries through to the building of assembly lines for the cars being manufactured, will create a critical competitive advantage for the country "for decades to come — but not overnight," he said, in an exclusive interview with Canada’s National Observer.
"It's normal," he said. "Look at Tesla, one of the biggest EV companies in the world: it took 17 years for them to turn a profit – and the U.S. poured billions of dollars into that company, and they faced serious financial difficulties more than once."
Between October 2021 and April 2024, a total of $46.1 billion in investments across the Canadian EV supply chain was announced by automakers including Honda, VW, GM and Ford, with a further $52.5 billion in support coming from federal and provincial coffers, according to Canada's Parliamentary Budget Officer, which is responsible for providing economic and financial analysis to the government.
"For Canada's automotive sector, the past two or three years have been transformational," Champagne said at the Sustainable Finance Forum in Ottawa on Friday.
But, transforming an automotive industry that had been built and operated for over 100 years around the internal combustion engine to one that manufactured battery-powered car models, of course, requires adjustments, he added.
Since April, when Honda announced Canada's largest ever single investment in its automotive sector — a $15 billion spend intended to underpin the construction of four industrial facilities including an EV manufacturing plant — the sector has suffered market headwinds.
Pull-back by GM and Ford on plans to start manufacturing electric models at Ontario plants, as well as the market travails of Quebec battery-maker Northvolt and e-schoolbus manufacturer Lion Electric, have been flagged by detractors of the government's EV strategy as signs of trouble ahead for the sector.
A recent report from EY, a consulting firm, found consumer appetite in Canada for EVs appears to be "leveling," with only half of the 48 per cent of Canadians expecting to be shopping for a new car in 2025 likely to be considering an EV, down 2 per cent year over year.
“Time should now be spent focusing on infrastructure and delivering a more efficient user experience to position Canada well for EV transition," said the report authors.
Canada is the world’s leading supplier to the lithium-ion battery supply chain, with Bloomberg New Energy Finance, a research house, placing the country ahead of China in its annual ranking.
“Tectonic technological shifts”
Champagne said the changes being driven by the global energy transition would be as far-reaching as in the first Industrial Revolution.
“From changing consumer preferences to building new supply chains and green charging infrastructure, these are tectonic technological shifts, the history of the world shows this,” adding that adopting the steam engine for industry and transportation during the 19th century “took time too.”
But he insisted EV naysayers are short-sighted. "Canada's EV sector has all the fundamentals to succeed in the world of the 21st century," said Champagne. "Our 'North Star' is decarbonization, and EVs will be a big part of this.
“When I talk to automakers they are thinking very long-term. Not how things are today, but how, if they don't invest now, they will look back and see it only as a missed opportunity."
The Canadian government has set a target of having 100 per cent zero-emission vehicle sales for all new light-duty vehicles by 2035, as part of its 2030 Emissions Reduction Plan.
Champagne acknowledged that automakers planning to build EV ecosystem manufacturing facilities in Ontario had in recent discussions expressed concern about market uncertainties, particularly in light of Donald Trump's return to the U.S. presidency.
“Certainly, there are people looking at the future of the U.S. Inflation Reduction Act,” the multi-hundred-billion dollar tax relief initiative launched by the Biden administration in 2022 to accelerate the uptake of clean energy projects and infrastructure.
"That has been a catalyst for significant investments in North America, not just the U.S. but also Canada. Some, including some Conservatives, may not see it, but the world does," he said.
Champagne said the scale of investments by EV-related companies in Ontario in the past three years reflects the perception of Canada as a stable market environment for capital projects.
"In a world that is fraught with disruption, wars and political tension, Canada offers stability, predictability and the rule of law for investors, which is in high demand and short supply," said Champagne.
Champagne, who was Canada's minister for international trade in 2017, believes there will be ways to defuse Trump's bombastic threat to impose a 25 per cent tariff on all products coming from Canada, including auto parts and critical minerals such as the lithium, cobalt, nickel and graphite that are key ingredients in batteries and other green technologies.
"When we speak with our American counterparts, the conversation is around security, supply chain resilience, and a growth agenda for North America — energy, industry, mining, manufacturing. So we have shared interests and this will help us address any such issues" around tariffs, he said.
Critical minerals — where latest government figures show Canada has a positive trade balance with the U.S. at $25.3 billion, up 23 per cent on the year before — could, Champagne agreed, be a “trump card.”
“Critical minerals are in batteries, semiconductors, renewable energy technology and defense applications — and we are the only NATO country that can supply the full suite. So we are well-positioned in this regard,” he said.
Comments
$100 billion would go a long way to improve and expand urban and rural public transit across Canada. Operational funds are sorely lacking.
$100 billion for public transit reduces far more emissions than $100 billion for private cars.
We can cut far more emissions far faster starting today with public transit. Not least because cars spent most of the 24-hour day parked.
Economies of scale matter. A bus can carry 40 to 60 people at a time — and hundreds throughout the day. A car typically carries just one — the driver.
Given the high price per tonne of carbon reduction associated with EVs, auto industry and EV subsidies rank among the least cost-effective and least efficient ways to spend our transportation and climate dollars.
Of course, auto industry subsidies largely benefit the auto sector. Honda, VW, GM and Ford. This is industrial policy, not climate policy. Auto industry subsidies reinforce the car culture paradigm at the expense of public transit and non-drivers.
Social equity: While the Liberals pour tens of billions into the auto and O&G industries, millions of ordinary Canadians are left stranded due to lack of transportation options. Non-drivers — the poor, the young, and the old — remain marginalized.
Priorities!
Agreed. But more efficient electrified mobility cannot do it alone. The other half of that relationship is land use. Providinf better bus service or building light rail is a supreme waste of money if they serve sprawling, low density communities. Even moderate increases in density will drive demand for better transit service and offer the stability of supportive ridership.
I believe our big three North American auto makers are foot dragging and going out of their way to discourage EVs. Ford only offered the F-150 Lighting and Mustang, not quite your everyday family vehicle offering, then complain sales are low, duh! GM on the other hand, a bit late, but offering Hummer EV (pickup/SUV) and Sierra pickup, again not quite everyday average consumer. In addition, Blazor EV, Equinox EV and higher end Cadillac EV. At least the Blazor & Equinox EVs are more inline with family type offerings. Chrysler just a couple of hybrids, totally out of the running.
It seems the foreign automakers are offering more practical vehicles for consumers like Honda, Kia, Hyundia and so forth, more inline with average consumers.
The big three need to wake up and know they are losing out on market share slowly and being late to the game will only hurt them in the long run. I wonder how much the oil & gas industry is behind their foot dragging.
I would even go as far to say, drop the tariffs on Chinese EVs and send a message to the big three to move forward or lose the EV game. It will happen with or without them, the writing is on the wall. I see more Tesla EVs on the road than anything else the big three produce.
Yes. The fossils are doing what they can to promote fossil fuels........and keep EV's too expensive for the average consumer. But if we go with them, pray to the gods of capitalist exploitation, our children will curse us. The climate catastrophe is at our door.........dragging our feet on transition is becoming dumber by the hour.
The EV industry concentrated on luxury cars with luxury profits for them, at first. I went to the "all things electric" show in Vancouver last summer: http://brander.ca/doraspage/20240915.html
...look back a few days to the "BIG money" day for the prices.
And the whole show was like that - no cheap products save for ebikes and scooters.
That's the market that went flat, this year. But now, China is putting out very cheap eV products, and that's an idea that won't go away just because they are tariff'd.
The eV is just certain to catch on because they are fundamentally better cars, in several dimensions.
YES. We have had a Kona EV since late in 2019. It was our reaction to the Kenney government win in Alberta. We are very happy with the car..........and there is no learning like experience. We hear the stupidities old men yarp on about Ev's....but the truth is, we should have gone electric from the start.
The automobile industry will have to adjust. There's no need for expensive warranties...the battery comes with a 10 year warranty......at no extra cost. The dealership hounds us to come in for check ups......but little goes wrong in an EV. We had to replace the little battery that all cars have..........that's all. What's more, when a mishap occurred when we were camping that damaged one cylinder of the battery.........they replaced it at no cost to us.
So now we have a 2020 Kona, with a 2023 battery..........good to 2033. And we haven't bought gas in all this time.
As to China...tells you what good global free trade actually amounts to. Once a country produces something affordable, the free marketeers are suddenly all over tariffs. Serves us right for voting for the crooks..........but as to EV's...
They are the future...........and they will drive our public transit as well, if we have the brains to get our people off the toxic exhausts of ICE vehicles............and go all out with electric.
My main fear is not EV's....its AI. The water and electricity those algorithms use are designed to keep us pumping fossils....as we collect pogy. Dumb and dumber continue to run things. But we'd be wise to put the free marketeers out to pasture and go all out for a clean green just transition. Ev's aren't the whole ball of wax, but they are part of it.