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this post was submitted on 21 May 2024
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I'm always confused by these criticisms, do I misunderstand how they work?
Reading this article, this 1.7million is an interest free loan, so taxpayers are only covering the lost potential of that money being used elsewhere, unless something happens whichs exempts them paying back.
For the various EV related plants, the majority of the subsidies are tax rebates. Which means the company needs to setup and actively operating in Canada such that they are making enough revenue in Canada that their paying enough taxes to be able to untalize any rebate. As Canadian taxpayers the tax revenue were missing is purely net-new revenue that wouldn't exist if the company didn't setup here. It's not like we're writing a blank check, we're just saying that if they setup here and start making money, they can pay us less money for the first while.
Neither of those feel like obvious bad deals for Canadians. Am I missing something?
If it's a 0% loan, then taxpayers lose the value of inflation - over the past few years that has been relatively high. And there's whatever administrative overhead is involved in selecting and administering the loan. And the cost of the photo op. Relative to the value of the loan, the overhead seems high.
The article makes the argument that this is where investors should step in. For an established factory, that seems reasonable.
IMO the EV plants are a different story, since the plant isn't established, and the PBO expects (some of them) to break even within 13 years.