Opinion: Canada’s billions to Stellantis and Volkswagen make for a bad joke

Substack newsletterThere’s an old joke about corporatocracy that goes something like this: “Canada is a handful of companies in a trench coat.” If that one doesn’t have you howling in your seat, there’s an addendum: “That we subsidize.” Is it funny yet?

The reason for this largesse? Thousands of jobs are at stake, says Stellantis, not to mention a thick plank of Ottawa’s EV and industrial strategy, which threatens to rot away without a heavy coat of cash shellac. But surely if governments are going to sink billions of dollars into for-profit companies there must be more of an upside to it for them? And us? Perhaps equity and some control over the corporation? Ah, another joke.

But it doesn’t have to be that way. Our governments can stand firm and demand equity stakes in the projects. And if that doesn’t work out, our politicians should and can find other uses for $13-billion and $15-billion, ones that better deliver on jobs and industrial strategy.

In the United States, President Joe Biden’s Inflation Reduction Act, signed in August, 2022, will funnel more than $400-billion in subsidies to companies over the next decade. Canada can’t extract equity or other forms of control or return on its investments in Volkswagen or Stellantis because the subsidy market is competitive across borders, which means the companies get to set the terms. Governments are weak – or at least disinclined to assert whatever power they have.

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