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GOLDSTEIN: Taxpayers to pay billions subsidizing green energy investors – Toronto Sun

The Trudeau government is going to spend billions of taxpayers’ dollars subsidizing risky investments in green energy projects in order to compete for business with the United States.
The Trudeau government is going to spend billions of taxpayers’ dollars subsidizing risky investments in green energy projects in order to compete for business with the United States. Photo by iStock /GETTY IMAGES

The Trudeau government is going to spend billions of taxpayers’ dollars subsidizing risky investments in green energy projects in order to compete for business with the United States.

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That was the reality, as opposed to the rhetoric, contained in Finance Minister Chrystia Freeland’s fall economic statement on Thursday.

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With Prime Minister Justin Trudeau’s government having already spent more than $100 billion on climate change and environmental initiatives since coming into power in 2015, the fall mini-budget announced new taxpayer-funded measures to promote green energy, plus more details of previously announced programs.

Among them:

A $15 billion Canada Growth Fund, which will subsidize private-sector investors financing clean energy projects, by insulating them from fluctuations in carbon pricing caused by government regulations. It will also subsidize projects that are at the pilot project level of development, meaning they carry an advanced risk of being able to turn a profit.

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An $8 billion Net Zero Accelerator program to subsidize private sector investments in electric vehicle and EV battery production.

Government tax credits for green energy projects costing $6.7 billion over five years starting in 2023, plus a separate program for the development of hydrogen technology.

A $3.8 billion program to implement a strategy for mining critical minerals in Canada that are necessary for producing electric vehicle batteries, as well as to facilitate the assembly of electric vehicles.

A $250 million expenditure over five years starting in 2023 to train 15,000 unionized workers for green energy jobs, plus $60 million over three years starting in 2023 to supplement existing federal, provincial and territorial projects with the same aim.

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One of the challenges Canada faces in attracting green energy investments in competition with the U.S. is that while Canada has a national carbon tax, the U.S does not.

U.S. President Joe Biden took a no-stick, all-carrot approach to developing green energy in his Inflation Reduction Act passed by Congress in April, which is why Canada has to compete with the numerous financial incentives in the U.S. to promote clean energy.

That means Biden’s plan doesn’t have what economic experts say is the most efficient way of reducing greenhouse gas emissions — a national carbon tax — even though without a carbon tax, the U.S. surpassed its 2020 emission reduction target, the same one Canada failed to meet.

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To the Trudeau government’s credit, it was able to get Biden to agree to include Canadian-made vehicles in a program that subsidizes electric vehicle buyers.

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Originally this applied only to U.S. vehicles, which would have devastated Ontario’s auto sector.

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The Trudeau government and Ontario Premier Doug Ford have jointly succeeded in attracting billions of dollars in auto sector investment to Canada by subsidizing major auto manufacturers, such as Honda and General Motors, to build electric vehicles and parts here.

That said, with Canada facing a possible recession next year, many Canadians will not be enthusiastic about paying subsidies to private investors in green energy to lower their financial risks.

The other problem is that the federal government is going to be farming out these billions of tax dollars on an accelerated schedule because of the Trudeau government’s target of reducing Canada’s greenhouse gas emissions to at least 40% below 2005 levels by 2030.

Canada is far behind that target, and when governments shovel tax money out the door in a big hurry, it becomes a breeding ground for bad investments and wasteful expenditures.