Arguing that electric vehicles (EVs) are too expensive and will lower Canadians’ quality of life, the Montreal Economic Institute (MEI) — an anti-regulation lobby group associated with Atlas Network — wants the Canadian government to repeal its EV mandate.

In December 2023, Canada’s federal government announced that all new cars, SUVs, crossovers, and light trucks sold by 2035 must be zero-emission vehicles (ZEVs). The government further established target goals of 20 percent new ZEV sales by 2026, and 60 percent by 2030. The new regulations are part of the Canadian government’s effort to combat climate change. As reported by Reuters, EV sales represented just over 12 percent of new vehicles sold in Canada in the third quarter of 2023.

In an “economic note” published in late February, MEI claimed this “forced market transition” will cut into Canadians’ food and leisure budgets and put pressure on electricity grids. The note, published under the title “Let’s Abolish the Federal Ban on the Sale of Gas-Powered Vehicles,” also suggests the global EV market is lagging.

“MEI is repeating a common but misleading talking point about EV sales stalling out,” said Keith Brooks, program director with Environmental Defence. “This has been debunked.”

“Most troubling is that they claim that EVs would increase the cost of living and cite a PBO (Parliamentary Budget Office) report on this matter, but the PBO found that in all scenarios, the total cost of ownership of a battery electric vehicle (BEV) is less than that of a car with an internal combustion engine,” said Brooks in a statement to DeSmog. 

“The shift to EVs will save Canadian households money,” said Thomas Green, senior climate policy adviser with the David Suzuki Foundation. In a statement to DeSmog, Green said that EVs are more efficient than gas cars because they run on electricity, which is far cheaper than gasoline. Moreover, unlike gas, electricity prices are not affected by volatile global markets.

“Gas cars pollute our communities, make us sick and increase healthcare costs while EVs are much cheaper to maintain,”  said Green. “So EVs are a win for affordability, a win for quality of life, and thanks to the EV standard, they are becoming more readily available and affordable.”

According to Environmental Defence’s research, the government’s ZEV sales standard would reduce BEV costs thanks to economies of scale, not to mention by encouraging car companies to bring economy ZEVs to market to meet the sales targets. Rather than relegating ZEVs to the luxury market and keeping their margins as high as possible, Environmental Defence argues automakers need to be directed to build and sell cars for a broad swath of consumers.

“The argument that ZEVs would place a burden on the electricity system is also a red herring,” said Brooks. “Grid managers are preparing for the electrification of the economy including the adoption of EVs, and if jurisdictions move forward with bi-directional charging, the adoption of EVs actually increases the resilience of grids and can smooth out peaks by allowing cars to charge off peak, and then feed electricity back to the grid at peak times, acting like a big, distributed battery energy storage system.”

Brooks further notes that, because of the time it will take to ensure 100 percent of all vehicles are ZEVs by 2050 (which is non-negotiable if net-zero goals by that year are to be maintained), then 100 percent of new car sales have to be ZEVs by 2035.

Trade War Benefits

The regulations also offer a potential boost to Canadian industry, now threatened by an American-instigated trade war.

“The ZEV regulations can help buoy Canada’s nascent battery and EV assembly industry which is threatened by U.S. tariffs,” said Brooks. “We want to keep Canadian demand high for Canadian made products, and that has to include EVs.”   

It isn’t surprising that MEI would oppose government regulations designed to direct a transition to ZEVs. MEI’s position is consistent with other anti-regulation lobby groups operating in Canada, such as the Macdonald-Laurier Institute (MLI), which has similarly produced numerous statements arguing against the policy. Among others, MLI criticizes what they argue is the carbon intensity of ZEV production as well as “non-exhaust particulate matter emissions,” which they claim “create substantial risks for adverse health effects and premature fatalities.”

These arguments don’t sit well with Dr. Joe Vipond, an emergency room physician and past president of the Canadian Association of Physicians for the Environment (CAPE).

“Arguments against EV mandates ignore the substantial harms that fossil-fuel-driven vehicles inflict upon the health of people across Canada,” said Vipond. “Gas-powered cars release a range of toxic air pollutants which impact our immediate health. Their emissions also fuel the climate crisis that threatens our current and future health.”

“MEI seems intent on delaying the technological transformation of transportation to the new era of emissions-free EVs,” said Vipond in a statement to DeSmog. 

“We as a country have the intellectual prowess and engineering skills to be leaders, rather than followers, into the new age.” 

Atlas Network Partners

Both MEI and MLI have been listed as partners in Atlas Network, a global alliance of anti-regulation organizations that have played a leading role in climate change denial and campaigns against environmental regulations. DeSmog research has revealed that both institutes (neither of which have any academic affiliations) have received funding from many of the same foundations. MLI has additionally received direct funding from Koch family foundations. Koch Inc. and Koch family foundations have played a leading role against the adoption of EVs, clean energy, and clean air standards, all while working to rehabilitate the image of oil and gas.

MLI and MEI are influential organizations, particularly within the ecosystem of oil industry advocates and radical anti-regulation activists. As an example, MEI’s report was circulated by Canada Action, a third party advertiser that spreads pro-oil propaganda on social media platforms.
 
Among MEI’s false climate change claims, they have previously stated that “climate change (…) will have positive net effects due in particular to higher crop yields.” This is one of the earliest false claims climate change could be beneficial for the planet, and was advanced in the 1990s by the Greening Earth Society, an astroturf effort by the American coal industry.

MLI recently cohosted an event in Victoria, British Columbia with Resource Works, featuring former B.C. cabinet minister Barry Penner who echoed MLI and MEI’s EV criticisms. Penner, who was recently named chair of Resource Works’ Energy Futures Institute, said EV mandates were “aggressive” and reiterated an MLI talking point that Norway’s “expensive” EV subsidy was between five and six billion dollars, though this is in fact about 1 percent of Norway’s GDP. Irrespective of cost, Norway’s considerable EV incentives have had the effect of making 89 percent of new vehicles purchased last year EVs, according to the Norwegian Road Federation, up from less than 1 percent in 2010. Norway is well on its way to becoming the first nation on Earth to fully transition to electric vehicles, ahead of its own projections and far ahead of its European neighbours.

Instead of following Norway’s successful lead and adapting an aggressive EV policy, Energy Futures’ Penner instead advocated ‘consumer choice’ and hydrogen alternatives. Hydrogen in Canada is primarily derived from natural gas, and the Energy Futures Institute is funded by Cenovus, which has major interests in Canada’s natural gas sector. Recent reporting by DeSmog further highlights that Cenovus funded astroturfing groups that opposed climate laws.

And while fossil fuel advocates claim transitioning to electric vehicles is a costly proposal, there’s considerable evidence to the contrary. Electric vehicles are better both for individuals as much as the national economy.

Green of the David Suzuki Foundation argues that car manufacturers make more money selling highly polluting SUVs, and this in turn locks consumers into high fuel costs for a decade or more. 

“No surprise: big oil and their lobbyists want to keep people hooked on gas to boost their profits, despite the harm to our health and communities,” said Green.

Keith Stewart, senior energy strategist with Greenpeace Canada, agrees.

“This report ignores the massive subsidies flowing to the oil and gas sector as part of the business-as-usual way those companies are exercising their power politically to maintain their near-monopoly on transportation options,” said Stewart in a statement to DeSmog.

“The truly high-cost option, for our economy and our environment, would be to trap Canadians in gas-powered vehicles that are polluting our air while destabilizing our climate and our politics.”