
Name one federal or provincial politician with a grand vision for the 21st century Canadian economy. You can’t. Canada is bereft of big thinkers, risk-takers
Last week, Canada kicked off 30 days of consultation about restricting imports of EVs from China. This follows the recent imposition of 100 per cent US tariffs. Should Canada follow the American lead? If it does, then the Justin Trudeau Liberals should ditch their strategy of selling clean energy with climate policies and replace it with aggressive industrial policy – just like China and the United States.
To climate purists, this would be anathema. For activists like Seth Klein, author of A Good War: Mobilizing Canada For The Climate Emergency, the warming of our planet is an existential crisis that supersedes all others. Klein argues for governments to take over or direct industry to fight the war on global warming. He wants a much more aggressive climate response and messaging.
So, too, did the Americans at one time. Economic blogger Noah Smith attended a 2017 Bloomberg conference at which all anyone could talk about was the need to ramp up industrial policy to combat the climate crisis. “But China was never mentioned — the big justification that everyone cited was climate change,” he writes.
There was just one teeny problem: Americans consistently tell pollsters they are very concerned about climate change, but few will pay even a small amount to reduce emissions.
China, on the other hand, skipped right over concern about a warming planet: “It is clear that for China, economic growth — and its own military power — take absolute precedence over addressing global warming,” says Smith.
A few years later, the pandemic changed US political calculations.

“COVID opened our eyes to the long-term risk for both the private sector and the American people of this over-dependence on China and the need to rebuild domestic manufacturing and innovation,” Commerce Secretary Gina Raimondo said in a 2022 speech.
Consequently, the Biden Administration deployed a more effective motivation: national security.
Noting that the US only accounted for 10 per cent of global manufacturing output, National Security Advisor Jake Wadland says that this “creates a critical economic risk and a national security vulnerability.” He called for a doubling down on “investments in infrastructure, innovation, and clean energy. Our national security and our economic vitality depend on it.”
“It’s all about national defense,” argues Smith. “Tariffs and industrial policy are intended to prevent America from deindustrializing in the face of Chinese competition.”
In the strategically important auto sector, American companies are already starting down the barrel of “deindustrializing.”
“The magnitude of the Chinese offensive, the competitiveness that they can demonstrate and the massive arrival of all of their best carmakers is a significant change,” Carlos Tavares, CEO of Stellantis NV (parent company of Chrysler and Jeep), said in a recent interview. “If the automotive industry doesn’t move, this industry will disappear under the offensive of the Chinese industry.”
The idea that household names like GM and Ford might fail is hard to comprehend for an American or Canadian. Their television ads, logos, and slogans are ubiquitous in popular culture.
Perhaps not for much longer.
China, the world’s first electro-state

The auto sector is one of the “New Three” – the others are solar and batteries – that China is prioritizing. The goal is to dominate global markets in these products and their supply chains. After 20 years of aggressive industrial policy, including hundreds of billions in subsidies, China is almost there. Over 80 per cent of solar panels are made in China, as well as a similar percentage of lithium-ion batteries.
Only automobile production remains to be conquered.
Last year, the world made 94 million light duty vehicles, according to Statista, with 30 million of those made in China. That’s three times what the US manufactured and 20 times Canadian output. Many legacy automakers make internal combustion engine (ICE) cars in China, but there are few competitive Chinese companies.
Not so for EVs. As Tavares’ quote makes clear, China EV makers are fierce competitors.
BYD, which stopped making ICE vehicles in 2022, is leading the charge, but there are many others whose market share is growing. Half of all cars sold in China now come with a plug. What really stands out, though, is the quality of construction. Not only is the fit and finish first rate, but they are technological marvels, befitting China’s role as the largest maker of electronics products.
But the killer feature is price.
While North American, European, and Korean (Japanese automakers are slow to join the EV game) models mostly start around $50,000, Chinese EVs sell for $10,000 to $20,000 in their home market. BYD, in particular, has slashed prices in the past year, largely due to its vertical integration into batteries (it is the second largest in the world). Tesla, once the industry leader, is losing market share because of its outdated designs.
The bottom line
Imagine a world in which China controls most of the manufacture of the 21st century’s energy (solar), the key technology to make modern power grids and transportation work (batteries), and it makes most of the world’s vehicles. That’s the spectre keeping American policymakers up at night.
Where does Canada fit into this emerging new world order? Right where it has been for at least the past 60 years: a hinterland to the American metropolis.
Why, then, is Canada pushing clean energy technologies as solutions to climate change instead of industrial policy? The United States has given up on that tact. China was ever only interested in so much as clean energy furthers its geopolitical goals.
The only possible Canadian strategy: Follow the US lead
No one is under the illusion that Canada is or ever will be a military power. That job was long ago outsourced to the Americans. Justifying EV tariffs as a response to China’s geopolitical ambitions would be silly.
But there is one very good reason for tariffs on Chinese EVs: taking maximum advantage of the US build up of clean energy manufacturing.
Canadians aren’t paying enough attention to the US government’s industrial policies of the past few years. Between the Bi-partisan Infrastructure Act, the CHIPs Act, and the Inflation Reduction Act, the Biden Administration has committed over $1 trillion over 10 years to building new battery plants, shifting factories to make EVs, manufacturing solar panels, modernizing the US power grid, creating hydrogen hubs, and so much more.
That’s just the supply side. Like China, the US is also subsidizing the adoption of many of those technologies by consumers and businesses.
That’s the demand opportunity. The world’s largest economy is embarking on a spending spree the likes of which has never been seen before and Canada is its largest trading partner. Canadian policymakers should be absolutely giddy with glee.
But there is also another motivation, one that Canadians rarely discuss: the world is experiencing another industrial revolution, or the sixth long wave of innovation, if you like.
This one is characterized by digital (think artificial intelligence) and clean energy technologies. The very ones China is working so hard to dominate.
If Canada is ever to escape its “hewers of wood, drawers of water” past, now is the time.
Unfortunately, and this is admittedly a very broad generalization, Canada has instead chosen to (mostly) back the incumbents. The oil and gas industry, the monopoly electric utilities, the mining companies, legacy auto makers, and the executives and business leaders who are comfortably in control of the country’s economic status quo.
Now, arguing for EV tariffs might seem to be the quintessential status quo move, but it doesn’t have to be. If we view tariffs as one part of the broader US push back against China’s geopolitical expansion, imposes tariffs will signal that Canada is all in on a Fortress North America strategy.
The next step is to replace the emphasis on climate change with a focus on industrial policy. The activists will howl, but the stubborn fact is that Canadians, like their American cousins, support climate policy as long as they don’t have to pay for it. The popularity of the CPC’s “Axe the (carbon) Tax” campaign proves the point.
An important part of that next step is to copy the American government’s activist role. Justin Trudeau’s Liberal government has enacted more climate policy in nine years than all the Canadian governments before it, but much of it is too passive.

Where is Canada’s Jigar Shah, the US Department of Energy’s frenetic evangelist for all things clean energy? There isn’t one.
The closest approximation is Environment and Climate Change Steven Guilbeault. As befitting a former Greenpeace activist, he sells clean energy policies with an emissions reduction bent. As I argued in this column, the Liberals should ditch him and find a frontman who focuses overwhelmingly on the energy transition.
For example, why sell the federal Clean Electricity Regulations as climate policy in a country where 84 per cent of electricity is already zero-emissions? The far better strategy would be to argue that renewable energy (particularly solar) is already the lowest-cost electricity, it’s on its way to a marginal cost of zero, and that Canada can use that competitive advantage to expand home-grown industry.
How many jobs might that create? How many opportunities for business expansion? How much extra government revenue to fix an ailing healthcare system?
And no new money for fossil fuel industries unless support is consistent with a clean energy industrial strategy.
For example, only subsidize the Alberta oil sands decarbonization (companies want $50 billion from governments) if there is a corresponding move to build an advanced materials manufacturing sector that uses the bitumen as feedstock for carbon fibre or asphalt binder. Then aggressively support the scale-up a materials sector in Alberta.
Making carbon fibre instead of gasoline creates over four times the value per barrel, according to Alberta Innovates, the provincial innovation agency leading the Bitumen Beyond Combustion research. Why are we still burning such a valuable resource? Why is Canada (and Alberta) not seizing this huge opportunity with both hands?
It’s what the US and China would do.
Where is the federal or provincial politician with a vision for the 21st century Canadian economy? Name one. Any party at any level of government. Can’t think of one? Include the business community and academics. Still nothing?
That’s because there is none.
Canada is bereft of big thinkers and risk takers. The country is embroiled in an historic global energy transition and there is no Canadian leader to point the way.
Let’s talk about THAT during Ottawa’s EV tariff consultation.
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