Ontario’s EV incentive: Don’t repeat climate policy mistake

Speaking to electric-vehicle advocates in September in Toronto, the federal minister of environment and climate change, Steven Guilbeault, said it “baffles” him that the Ontario government refuses to offer rebates for EVs.

The province is benefiting from billions in EV and battery supply chain investments, he said, but not doing its part to support the demand side of the industry by helping residents buy EVs.

Ontario is unquestionably lagging other provinces on the incentive front: British Columbia, Quebec and Atlantic Canada offer them. But if Guilbeault cannot understand why Ontario’s Progressive Conservative government is not rushing into the EV arena with cash for consumers, he has a selectively short memory of climate policy in the province.

Ontario being too early an adopter on the last big clean-technology transition is no small part of why the PCs swept to power in 2018.

The provincial Liberals bet big on renewable power in 2009 with the Green Energy Act. The legislation aimed to boost clean-power production and build a homegrown renewables industry by offering guaranteed prices to electricity producers that used Ontario-made wind and solar technology. In other words, it paid more than the market price for power to create demand for renewables.

But the pursuit of a made-in-Ontario wind and solar industry was derailed by a 2013 World Trade Organization ruling that found the legislation discriminated against foreign companies.

Compounding the injury, the feed-in tariff program that set fixed prices for clean power became a major contributor to Ontario electricity prices ballooning throughout the 2010s. An oft-cited 2015 auditor-general report found that renewables procured under the program cost Ontarians $9.2 billion more than they would have under previous purchasing regimes.

Prices for renewables also slid considerably throughout the decade, leaving Ontario with uncompetitive long-term contracts. Provinces such as Alberta that began transitioning a few years later faced far lower costs.

High power prices were among the hot-button issues that sent the PCs to Queen’s Park with a commanding majority in 2018. The new government quickly quashed a series of clean-power projects and backpedaled on other environmental policies.

It also eliminated an EV rebate program brought in by the Liberals.

Asked last year about bringing back the incentive, Premier Doug Ford quipped that he’s not going to help millionaires buy $100,000 cars. He might as well have said he’s not going to use government money to undercut the market price for vehicles to create demand for EVs.

But the PCs have been eagerly backing supply-side EV investments with government cash. As it has played out, Ontario’s auto manufacturing sector is in an envious position on electrification despite the lack of provincial EV funding for consumers.

It may be “baffling” to Guilbeault, but Ontario’s stellar track record on auto investment this year is proof that local adoption of EVs is not the sole metric that Canadian governments should be using to track progress on vehicle electrification.

As the former provincial Liberal government learned the hard way, being an early adopter is costly and not always worth the head start. The PCs look content to allow EVs to gain ground organically, so long as Ontarians get to build them.

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