Champagne fails up as Canada’s new finance minister #CanadaFinance

On the same day Prime Minister Mark Carney confirmed that François-Philippe Champagne was his permanent choice for finance minister, news broke showing precisely why he’s the wrong man for the job.

Champagne was the man who captained former prime minister Justin Trudeau’s electric vehicle (EV) crusade. He teamed up with the government of Ontario to give over $50 billion of taxpayer cash to the EV industry to try to get electric cars and factories built in Canada.

The crown jewel “investment” Champagne secured was from Honda. In April 2024, Honda announced plans to invest $15 billion to retool a factory to build EVs, as well as build a new EV battery plant, in Alliston, Ontario.

As part of that announcement, Champagne promised Honda $2.5 billion of taxpayer cash, with the Ford government matching Champagne’s commitment. That means a total of $5 billion of taxpayer cash was put on the table to coax this commitment from Honda.

In justifying the handout at the time, Champagne said it was essential for Canada to get on the EV bandwagon to “build the cars of the future.”

But, as many predicted at the time, things are falling through. Honda is pulling back and taxpayers might be left holding the bag.

Honda just announced this week that it’s postponing its EV plans in Alliston for two years because of a slowdown in demand for EVs.

Based on the EV industry’s recent trajectory, there’s a good chance that a two-year delay could turn into a permanent one.

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Corporate welfare is never a good idea. If a product isn’t popular enough and profitable enough for a company to build it on its own, without a government handout, the “investment” simply isn’t sustainable.
Products will succeed or fail based on consumers. If consumers want to buy EVs, they can. If Champagne was right and EVs were going to be the cars of the future, market forces and consumer interest would have ensured enough would have been built for consumers to buy them, and at the right price.

The Honda announcement comes on the heels of other companies announcing EV pullbacks. The feds handed over $1 billion to Northvolt to build an EV battery plant in Quebec. Now, Northvolt is bankrupt. The Ford Motor Company, like Honda, has delayed the bulk of its EV plans for two years, after also receiving billions of dollars in government handouts.

Champagne was the man who cooked up all of these bad EV deals, often in concert with Ontario’s economic development minister Vic Fedeli. If Champagne had the bad judgment to gamble tens of billions of dollars of taxpayer cash on an EV pipedream, is he really the man who should be overseeing the federal budget, which amounts to over $500 billion a year?

In the private sector, if you fail at your job, you’re shown the door. In government, it appears as though promotions are handed out instead.

Dozens of new Liberal MPs are heading to Ottawa after last month’s election. In choosing his cabinet, Carney had a chance to get rid of the dead weight of the Trudeau era and choose a new cast of characters to lead his government.

In many cases, Carney made the smart move and brought in new ministers to replace old ones. But in the finance portfolio, perhaps the second most important job in government, Carney handed Champagne the keys.

If Champagne’s record as finance minister resembles his record as innovation minister in any way, Canadians are in for a world of hurt over the next number of years.

Carney promised Canadians a leaner federal government in last month’s election. Putting someone in charge of Canada’s finances who blew over $50 billion on an EV pipedream sure isn’t a good start.

If Champagne wants Canadian taxpayers and consumers to have confidence in him as the man in charge of the nation’s finances, he needs to swear off any additional corporate welfare handouts. It’s time for Champagne to focus on fixing the federal budget, not sweetheart taxpayer handouts to the private sector.

Jay Goldberg is the Canadian affairs manager at the Consumer Choice Center