Comment by guywithahat
4 days ago
This feels like a poor long-term play for a short term political win. Canada has a robust automotive supply industry to US auto manufacturers, and this industry could be in long-term risk in an attempt to hurt relations with freer, traditionally more conservative nations. It’s not a shock but it is always disappointing to see major political decisions made for the benefit of the next election cycle.
> in an attempt to hurt relations with freer, traditionally more conservative nations
I don’t think those are the salient characteristics of the US from Canada’s perspective in this development, and because of that I don’t think of your analysis of this as motivated by short term political considerations is correct. Instead, the current US government’s unexpected decisions to turn the thumbscrews on Canada exposed Canada’s economic dependence as a vulnerability, and the Canadian government is at least trying to signal a capability to become less dependent in the future in the hopes that reduces their vulnerability as perceived by the US government. That vulnerability existed before and will outlast the current US government.
I largely agree, but there are conflicting goals which makes it hard to evaluate if this really is a bad long-term play. Canada has environmental commitments, and giving the population access to cheap EVs will help meet those goals. I don't think this decision is just a short-term political win, there is potential for it to help with the longer term vision of Canada. But I do agree, this is bad for the local automotive industry in Canada.
The message here is that western Canadian agricultural & energy interests are of potential more strategic value than a dying technically backwards auto sector led by three moribund regressive manufacturers who have shown their willingness to show their belly to Trump anyways.
As an Ontarian, I'm saddened. But I don't think the Big3 deserve anymore state support. They've pushed it too far.
Just earlier this week they were running editorials against the gov't on EV mandates. Again. Ok, here you go. Don't want to make EVs? Only want to sell giant Canyoneros?
It's ok. China will service that market. Have fun becoming irrelevant. If consumers really don't want EVs, like they said earlier in the week, then there's nothing to fear. Right? Right?
More that Ontario auto is projected to have no value since Trump has explicitly signaled he wants to kill Canadian auto and reshore to US. If Ontario auto is going, no sense in losing also agriculture especially if oil also going in 5-10 years if VZ ever works to US favor. The only hedge is to save Canadian auto is hoping for some sort PRC JV where Canadian plants keep some jobs and grab some margins, possibly a lot of margins (i.e. no truly cheap EVs) since PRC inputs cheap. Best case scenario is Canada has meaningfully cheaper EVs, but not Chinese cheap, get to hold onto some auto work, have access to worlds largest ag buyer, maybe free up an extra million barrels of oil to export since US will want VZ heavy instead of WCS from Alberta. Although US has many other ways to punish Canada.