In April, I came across an article which announced that Volkswagen (VW), the great German auto company, has negotiated with the Canadian federal and provincial governments, to build a massive electric car battery plant in the country. And as we know very well, they were looking for government subsidies to sweeten the deal, which it did. Yes, this has become normal, especially when we are talking about future-building green energy investments.
I also read that VW brought up the threat that if Canada does not match the subsidies that the US will be providing through its Inflation Reduction Act (IRA), the company will move its investment southward. And the government diligently did, which may end up costing it up to $13 billion over 10 years. I wonder what magnificent benefits Canada will get to make it worth that kind of subsidy. But hey, what do I know about economic policy and green futures.
Now, guess what? The other day, I read that Stellantis - the maker of Fiat, Chrysler, Jeep, Peugeot, and a few other brands - that had signed a deal for an electric car Gigafactory in Canada with an investment tag of $5 billion and a subsidy of $1billion from Canada, is coming back for more sus. It is telling Canadian governments that the conditions it has have to be upgraded by the government to match what VW got, otherwise it will renege on the deal and move down South!! And the Canadian Prime Minister and Industry Minister, have rushed to South Korea to save the deal! South Korea, because Stellantis has partnered with LG.
These episodes happening back to back, frankly put me out of myself. We see that a US announcement - we don’t even know how much of IRA will actually come through - becomes an excuse for global companies to bully Canada. Secondly, when I read about the numbers, I cannot help but to remember this quote, that «capitalism seeks to privatize profits, but to subsidize losses and costs». After COVID vaccine hostage taking, fossil fuel exaction, and arms industry ransom, now we have green car industry extortion of governments.
Paris, May 25, 2023
Zeejay