Warning: This text will offend some people. You may have made statements at Christmas dinner that will go down in flames.
In the main economic news of 2023, we remember the billions invested by Quebec and Ottawa in the battery sector. Both of our levels of government have focused heavily on attracting large companies that will produce components for the electric cars of tomorrow.
The largest and most spectacular (in Quebec) is the Northvolt factory, which is being built on the south shore of Montreal. Since the announcement, the name Northvolt has been discussed and often controversial.
The amounts invested are enormous.
These investments carry risk, there is no denying that. Like any investment.
This is all of our money that our government invests on our behalf.
A healthy debate
So there is a debate and that is normal. You do not have to agree to these government decisions. We live in a free country and everyone has the right to their opinion… but not the right to make statements that defy logic. When it comes to investing in industrial policy, we hear things that are difficult to hear.
Let me explain.
You have the right to defend yourself against this state aid from an economic philosophy perspective. They are against state aid for companies, period. This is the case of Éric Duhaime. A coherent and self-evident position.
But you have to understand the consequences. In a sector that is experiencing a boom like electric cars, the big factories will be built elsewhere. In the United States, Ontario, jurisdictions that provide government assistance. One can argue that a healthy economy with low taxes and a right-wing government will then succeed in attracting companies from other industries. But we have to accept what we lose.
We can also be against these investments because we don't believe in the battery sector. If you have studied the energy future of vehicles and come to the conclusion that the battery electric car will be just a flash in the pan, then you are right when you say that we should not invest our savings in it.
You may be against it because you believe the risk is too great relative to the return. Or because you believe that electric cars will be harmful to the environment in the long term and that we should give up cars altogether.
Anything
But please, you cannot say that you are against the battery sector under the pretext that this money should instead be put into education, health, employee salaries or other ongoing expenses. It's embarrassing to confuse an investment aimed at generating future income with an ongoing expense. Yet we hear it regularly.
As if you were confusing the amounts invested in the RRSP with rent and groceries for a household.
We are investing in the battery sector to generate more money to generate the billions that will fund health and education between 2030 and 2060.
We can believe it or not. Agree or disagree. But we need to think again when we confuse investments and current expenses.