
It’s not always the unexpected that gets governments in trouble — often enough it’s their own bad judgement, poor timing or general clumsiness that gets in the way. But the unanticipated does happen a lot.
Parties and politicians put time and effort into concocting a set of policies aimed at winning votes by proposing remedies to problems identified as occupying top rungs of current voter concern. If they’re lucky they get elected, presumably intending to put those policies into effect at the earliest opportunity. Then the world shifts and pulls the rug from under them.
Former prime minister Justin Trudeau was a big fan of the attention-getting promise. Especially if it was a pledge timed well into the future when he was unlikely to still be around to be held responsible. Carbon reductions too ambitious to be realistic. Budget targets too unlikely to be believed. Statist planning projects that tended increasingly to the surreal.
Mark Carney is left with the detritus and the problem of what to do about it. As prime minister he’s already acted on a few of the problematic leftovers, ditching the carbon tax even though he’d previously supported it as a good idea; scrapping an increased
on capital gains although the Treasury could certainly use the money; “caving,” as the Trump administration so tastefully put it, on a digital services
that was a bad idea to
with but pushed through by the Trudeau government anyway.
There’s an argument to be made, and not a bad one, that each retreat was the right move for the moment. And if there are mistakes that need abandoning, the early days of a new government is proverbially the best time to do it.
But righting wrongs has confronted Carney with a new predicament, in that there are so many Trudeau-era wrongs that need righting. Washington was still in the midst of its victory dance over its digital tax triumph when Canada’s auto industry came along to plead for similar treatment from Ottawa, insisting automakers couldn’t possibly meet previously-set electric vehicle targets and urging the new Liberal government to backtrack post haste.
Carney
the session with Canada’s chief executives for Ford, Stellantis and General Motors. Brian Kingston, chief executive of the Canadian Vehicle Manufacturers Association, was blunt in identifying the targets set for electric vehicle (EV) production as the main topic.
“The EV mandate itself is not sustainable. The targets that have been established cannot be met,” he said on arriving for the meeting. Afterwards he told Politico’s
news site, “At a time when the industry is under immense pressure, the damaging and redundant ZEV mandate must be urgently removed.”
There’s no doubt automakers have a serious threat on their hands. The Trump administration is putting a vigorous squeeze on the industry in its crusade to force manufacturing back to the U.S. Canadian plants face tariffs on steel and aluminum, and another on autos themselves. Even if negotiations succeed in reducing those levies, the unpredictability of the current U.S. administration eliminates any chance of certainty, inhibiting long-term planning and investment strategies. Add in the failure of the EV revolution to attain the heights enthusiasts forecast for it and the future looks like one long, bumpy ride into doubt.
The Trudeau EV targets were
in 2022 by then-environment minister Steven Guilbeault, now minister of Canadian Identity and Culture. They set minimums for zero emission vehicle sales at 20 per by 2026, 60 per cent by 2030 and 100 per cent by 2035.
The goals were always fanciful and have looked increasingly so as the EV business ran into trouble on numerous fronts. China’s determination to flood the world with low-cost EVs roiled higher-cost rivals in Europe and North America. A global race to secure essential minerals set off commercial clashes in some of the world’s most troubled countries. In addition to his on-again off-again tariff regime, Trump is set on
the U.S. EV industry, ordering an end to supports introduced by the Biden administration and cancelling a federal tax credit for EV sales in the “Big, Beautiful Bill”
Wednesday by Congress. A last-minute change to the legislation even
the end of the credit by three months to September this year.
Add to all that the personal
of Tesla founder Elon Musk, removing the perceived chichi-ness of owning a Tesla and sending sales into a tailspin, a tarnish potentially affecting the popularity of electric vehicles in general.
So there is a more-than-reasonable case to be made for Carney to water down the EV mandate while he’s still in the business of ordering retreats. But there’s an obvious political risk involved, and one he can’t be keen to encourage. One retreat feeds another, and Canada’s history of corporate subsidies and regulatory breaks means there’s a long list of supplicants likely to view concessions to the auto giants as a signal to get out their begging bowls and head to Ottawa for similar treatment.
The auto sector
an annual contribution of $16 billion to the economy, making the need for sympathetic treatment from Ottawa obvious. Yet a tradeoff of EV ambitions to fossil fuel realities is a contravention to Carney’s clearly stated environmental beliefs.
This may be a moment in which we discover how much of the prime minister is the pragmatic business-minded banker intent on shaking Canada free of its low-productivity torpor, and how much is a politician still in his apprenticeship and wary of being pushed in directions he doesn’t want to go.
National Post








