Warning: this text will offend some people. You may have made statements at Christmas dinner that will go down in flames.
In the major economic news of 2023, we remember the billions invested by Quebec and Ottawa in the battery sector. Our two levels of government have focused heavily on attracting major companies that will manufacture components for the electric cars of tomorrow.
The largest and most spectacular (in Quebec) is the Northvolt factory which will be built on the South Shore of Montreal. Since the announcement, the name Northvolt has come up in discussion, often in controversy.
The amounts invested are colossal.
These investments carry a risk, that’s undeniable. Like any investment.
This is all of our money that our government is investing on our behalf.
A healthy debate
So there is a debate and that is normal. You do not have to agree with these government decisions. We live in a free country and everyone has the right to their opinion… but not the right to make statements contrary to all logic. In the case of investments in industrial policy, we hear things that are hard to hear.
Let me explain.
You have the right to oppose this government aid out of economic philosophy. You are against state aid to businesses, period. This is the case of Éric Duhaime. A coherent and assumed position.
But you must understand the consequences. In a sector that is experiencing a frenzy like electric cars, the major factories will be established elsewhere. In the United States, Ontario, jurisdictions that provide government assistance. It can be argued that a healthy economy with low taxes managed by a right-wing government will then succeed in attracting companies from other sectors. But we have to accept what we lose.
We can also be against these investments because we do not believe in the battery sector. If you have studied the energy future of vehicles and concluded that the electric car with battery was only going to be a flash in the pan, then you are right to cry that we should not put our savings into it.
You may be against it because you consider that the risk is too great in relation to the return. Or because you believe that in the long term the electric car will also be polluting and that we should abandon the car altogether.
Anything
But, please, you cannot say that you are opposed to the battery sector on the pretext that this money should instead be put into education, health, employee salaries or any other current expense. Confusing an investment aimed at obtaining future returns with a current expense is embarrassing. Yet we hear it regularly.
As if for a household you were confusing the amounts invested in the RRSP with rent and groceries.
We are investing in the battery sector to generate more money, to generate the billions that will pay for health and education between 2030 and 2060.
We can believe it or not. Agree or not. But we have to think again when we confuse investment and current expenditure.