Volkswagen electric vehicle battery plant.

Battery Plants

With a little help from the Conference Board of Canada, the Financial Post is offering a self-defeating straw man on the issue of government funding for battery plants.

Here’s what they write:

Picking battery plants to solve Canada’s productivity crisis ‘dangerous road,’ report says. Better approach would be to cut taxes and let markets find the right solutions, says Conference Board of Canada…

“To be very specifically making deals with three or four companies on battery production, I think is just risky,” he said. “What if it turns out that the solution to our road pollution is different? Who knows what technology comes around the corner?”

Here’s the link, so long as the Post doesn’t remove it out of embarrassment.

That has never worked. Companies just keep the money and keep doing what they were going to do anyway. Trickle-down is a repeatedly disproven economic theory. The Conference Board should be ashamed of it self for trotting out this old canard.

Some critic wrote:

Right, but forming a deal with the government where they waive billions in future taxes is somehow going to “work” as an alternative?

Yes.

  • For one thing, it will achieve the primary objective, which is to develop an alternative to oil and gas. Stimulating economic activity is only a secondary goal.
  • It is also better than having all battery manufacturing take place in, say, China – which is where the free market would lead us, if the past is any guide.
  • Finally, the Financial Post’s main argument is that funding battery plants is “risky” – “What if it turns out that the solution to our road pollution is different? If it’s risky, private enterprise will never build the plants; private enterprise hates risk. That’s exactly the sort of thing we need governments to do.

True, I’m not happy about giving corporations billions of dollars either. My preference would be for government to take ownership stake in the plants. But the climate crisis is more important to address than ideal economic policy, so I’m willing to let it slide, for the sake of, you know, not destroying the planet.

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