In my new book, and in this column, I revisit some of my opinions. In the case of governments picking winners, the price is proving to be too steep.
No matter what readers have to tell me, I always appreciate — and learn from — your feedback on this column. I get letters and emails and comments and tweets. Hell, if you know my number, I even get your calls.
Reactions vary. Some express love, others hate. I welcome both.
Why? Because that old saying is right: feedback is the breakfast of champions. And my readers have provided me with a steady diet that’s sometimes delicious, other times devastating. But it’s this experience, being held accountable for what I write, that gave me the inspiration for my first book, “What I Wish I Said.”
In it, I take 48 columns I’ve written in this space over the past six-plus years and write a rejoinder to each. In some cases, I claim I got it right. In others, I find I came close, but missed a crucial insight. But in many, I admit I got it wrong. Dead wrong.
It’s these reflections that I found most rewarding. For one thing, I got a second kick at the can. But, more importantly, I got a chance to closely examine not only what I got wrong by why and how. This kind of reflective exercise has made me a stronger writer, but it’s also made me more eager, more willing, to underline my misfires and to declare — with the benefit of hindsight — what I wish I’d said.
And wouldn’t you know it, this week provides just such an occasion.
In March, I wrote that the traditionally conservative wisdom that government should not pick winners no longer held up in our new, post-Inflation Reduction Act, reality. So, just as I do in the book, let me clear the air: I got it wrong. And here’s why.
Recent developments from Canada’s negotiation with Stellantis over the development of an electric vehicle (EV) battery plant in Windsor have revealed that there’s more to this wisdom than meets the eye. Unfortunately, I utterly failed to capture it.
As of now, the feds have made a new offer to Stellantis to keep that battery plant north of the border. That’s after Stellantis halted construction in May, threatening to move the plant to the U.S. unless we ponied up even more cash to match American subsidies.
It’s hardly an earth-shattering prediction to remark that if this deal comes through it will have more zeros than many Canadians are comfortable with.
That’s because when the numbers are crunched on the dollars-spent-per-jobs created, many will think the deal makes no sense. In fact, many would say: just cut these workers a cheque for their lifetime salary — it would be cheaper!
Now those who would support the transaction — after all Canada does have a strong opportunity in this emerging industry — still must deal with this reality: government forking over billions of dollars to private industry (and quite a small subset of it) is not an easy sell to average voters struggling to put food on the table.
And that’s precisely where this conservative insight that governments should refrain from picking winners comes back into play.
The uncomfortable reality for governments is that when they pick winners, those winners will use all the leverage they have to make even greater gains, to exploit their anointed status, not for the good of all Canadians, but the narrow interest of their stakeholders.
That might just be the price of doing business, but that price has a way of spiralling out of control when the government is negotiating with its cards face up. Make no mistake: Stellantis knows that neither the Trudeau nor Ford government is willing to lose precious seats in the Windsor region. They know they’ve made myriad promises to voters about Canada’s future economy they cannot afford to reverse.
The clearest market signal that Canada is emitting nowadays is not that we’re the new and natural hub for EV manufacturing and minerals mining, but rather that we’re willing to pay practically any price to be that hub.
One must wonder what the political consequences will be as that price is driven increasingly higher.
This article first appeared in the Toronto Star on June 12, 2023.