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Plug-in backscratching

Posted by cwaddell under All, Political Strategy

Christopher Waddell

Had there been any debate in Parliament about the wisdom of spending $13 billion to keep General Motors and Chrysler alive surely one of the questions an effective opposition would have raised would be will government discriminate in its policies on the auto sector to favour the companies it owns?

Ontario provided an answer yesterday with a subsidy of up to $10,000 for electric vehicles, announced by Premier Dalton McGuinty at a General Motors dealership in Toronto. The only beneficiary on the immediate horizon will be the Chevrolet Volt, a plug-in car supposed to begin production in late 2010.

With a  predicted price tag of about $40,000 US – the Volt will be at least $10,000 more expensive in Canada than popular hybrid competitors such as the Toyota Prius and Honda Insight – neither of which would be eligible for the subsidy as they aren’t plug-ins. Not surprisingly Honda and Toyota are unimpressed and being uncharacteristically vocal about it, as stories in today’s Globe and Mail and National Post highlight.

Two years ago Honda engaged in a battle with the federal Conservative government when it introduced a subsidy for fuel efficient vehicles with an arbitrary mileage cutoff that just excluded some Honda vehicles. That program was a failure but not before it alienated Honda which builds almost 400,000 vehicles annually in Ontario.

The length of Prime Minister Stephen Harper’s meeting with Governor General Michaelle Jean last December to discuss proroguing Parliament meant he missed the official opening of a new Toyota plant in Woodstock, Ont. – the only new auto assembly plant built in the province in the last decade.

The debate might have also asked if governments introduce policies that directly undercut the interests of companies that have invested and expanded in Ontario to favour those that have cut back and closed plants, how tough will it be in future to persuade Honda and Toyota to continue to choose Canada over the United States for future investments?

Christopher Waddell is acting director of the School of Journalism and Communication at Carleton University. He is a former reporter, Ottawa bureau chief, national editor and associate editor of the Globe and Mail and a former CBC-TV parliamentary bureau chief and executive producer-news specials for CBC TV News.