Last week, the Trudeau government and the Ford government announced a new multi-billion dollar taxpayer-funded subsidy for Honda to expand its Alliston, Ontario plant to manufacture electric vehicles (EV) and host a large EV battery plant. Eventually, the direct and indirect subsidies could total $10 billion from the two governments.

The Honda announcement follows earlier deals with Northvolt, Stellantis, and Volkswagen to build and operate EV battery and auto assembly plants in Ontario. According to the Parliamentary Budget Officer, these three deals may total $50.7 billion after accounting for the cost of government borrowing to finance the subsidies and foregone corporate tax revenue from tax abatements tied to production.

Clearly, if future taxpayers across the country (not just in Ontario) are to avoid a huge additional tax burden or suffer reductions in government services, a lot needs to go right for Canada’s EV industry. 

In particular, there must emerge sufficient market demand for EVs so these “investments” in the EV auto sector will be fully paid for by future tax revenues from corporate and personal income taxes levied on companies and workers in the EV sector. During their joint announcement of the Honda deal, both Prime Minister Trudeau and Premier Ford ignored this elephant in the room while claiming that the Honda deal would mean 240,000 vehicles a year manufactured at the site and 4,200 jobs preserved while adding another 1,000 jobs.

By way of perspective, in 2023 around 185,000 EV vehicles were sold in Canada—about 11 percent of all new cars sold in Canada that year. This is considerably less than the target capacity of the Honda complex and the total expected production capacity of Canada’s EV sector once all the various announced subsidized production facilities are in operation. In contrast, 1.2 million EVs were sold in the United States.

The demand for EVs in Canada will likely grow over time, especially given the increased incentive the federal government now has to ensure, through legislation or regulation, that Canadians retire their gas-powered vehicles and replace them with EVs. However, the long-run financial health of Canada’s EV sector requires continued access to the much larger U.S. market. Indeed, Honda’s CEO said his company chose Canada as the site for their first  EV assembly plant in part because of Canada’s access to the U.S. market.

But political developments in the U.S. over the past few years have substantially increased the risk of any investment that relies on unrestricted access to the U.S. market. The trade protectionist bent of Donald Trump, the Republican nominee in the upcoming presidential election, is well known and he reportedly plans to impose a broad 10 percent tariff on all manufactured imports to the U.S. if elected. 

While the Canada-U.S.-Mexico Free Trade Agreement ostensibly gives Canadian-based EV producers tariff-free access to the U.S. market, Trump could terminate the treaty or at least insist on major changes in specific Canadian trade policies that he criticized during his first term, including supply management programs for dairy products. The trade agreement is up for trilateral review in 2025, which would allow a new Trump administration to demand political concessions such as increased Canadian spending on defence, in addition to trade concessions.

Nor would the re-election of President Joe Biden immunize Canada from protectionist risks. Biden has been a full-throated supporter of unionized U.S. auto workers and has staked his administration’s legacy on the successful electrification of the U.S. transportation sector through domestic production. Given his government’s financial commitment to growing a domestic EV sector, Biden might well impose trade restrictions on Canada if Canadian exports start to displace domestic production in the U.S.

In short, Canadian politicians, most notably Justin Trudeau and Doug Ford, have staked the future of Canada’s heavily subsidized domestic EV sector on the vagaries of the U.S. political process, which is increasingly embracing “America First” industrial policies. This may turn out to be a very costly gamble for Canadian taxpayers.

As part of a paid partnership, this month The Hub will feature excerpts from this year’s five shortlisted books for the Donner Prize, awarded to the best public policy book in Canada. Our podcast Hub Dialogues will also feature interviews with the authors. The winning title will be awarded $60,000 by The Donner Canadian Foundation on May 8th.

The following is an excerpt from Wrongfully Convicted: Guilty Pleas, Imagined Crimes and What Canada Must Do To Safeguard Justice (Simon and Schuster, 2023).

Since my first year of teaching criminal law in 1989, I have used a case study of how Donald Marshall Jr. was wrongly convicted of murder in 1971. The case study replaced my colleague Marty Friedland’s previous case study of Steven Truscott, who was sentenced to death in 1959 when he was fourteen years old. Truscott was finally acquitted with help from Friedland’s daughter in 2007 of the still-unsolved murder of a classmate. Both Marty and I wanted our students to study un-true crime as well as true crime. They need to know that the “facts” presented in the appeal court judgments they read are contested. Sometimes these facts are not true.

Both the Marshall and the Truscott cases were who-done-it? murders that convicted the wrong person. Many people continue to associate wrongful convictions exclusively with the mystery of “wrong-person wrongful convictions.” These convictions are a staple of true crime novels and movies. But wrongful convictions are not entertainment. They are about human mistakes and human suffering. These types of wrongful convictions still occur, but we now know about other, even more insidious types of wrongful convictions. 

False guilty pleas

The vast majority of Canada’s remedied fifteen guilty plea wrongful convictions have involved women, Indigenous or other racialized people, and those with cognitive difficulties. Their stories need to be understood to ensure that we do not blame victims for making understandable choices. Canadians need to understand the hard truth that sometimes a false guilty plea to accept a deal to a reduced sentence is a completely rational decision.

Imagined crimes

In some cases, people plead guilty or are convicted after a trial even though there was no crime.  In other words, they are convicted of un-true crimes that are imagined by police, prosecutors, expert witnesses, judges, and juries. Such imagined crimes constitute twenty-eight of the eighty-three wrongful convictions presently in the Canadian Registry of Wrongful Convictions. In seven of these cases, the victims of the justice system’s unfounded suspicions were Indigenous. They include two Indigenous men and one Indigenous woman who were wrongfully convicted of murdering young children in their care when the children died from undetermined causes or by accident. The racist stereotype of Indigenous people as bad parents prone to violence is unfortunately as old and pernicious as the residential schools.

The stories contained in the Canadian registry of wrongful convictions have made me more disillusioned about the Canadian criminal justice system than I was as a younger law professor. I am not, however, completely disillusioned. Not yet. Canada can do better to prevent wrongful convictions, though we will never eliminate them. The Supreme Court recognized that in 2001 when it wisely took the death penalty off the table. We know that wrongful convictions are inevitable. This makes it imperative to find quicker and better ways to correct them and to attempt as best we can to make amends for the incalculable damage they cause.

During the summer of 2021, I was privileged to assist Justice Harry LaForme and Justice Juanita Westmoreland-Traore as they conducted public consultations about how best to improve Canada’s approach to discovering and correcting wrongful convictions Under the existing system, applicants who have exhausted their normal appeals must apply to the federal minister of justice for what is described in the Criminal Code as the “extraordinary remedy” of a new trial or a new appeal. They must effectively identify new evidence to justify their applications, though most of them will lack the funds and the necessary powers to find the new evidence. Crucial evidence may, moreover, be buried in police and prosecutors’ files or even destroyed.

During the COVID-19 pandemic, Zoom allowed us to hold forty-five roundtables that involved 215 people including 17 exonerees. The exonerees told us they did not care for the federal government’s proposed name for a new review body, the Criminal Cases Review Commission, even though this same title is used for similar bodies in England, Scotland, Norway, and New Zealand. They pointed out they were people, not criminal cases. They wanted their convictions reinvestigated and retried. They did not want their cases to be the subject of desktop reviews by bureaucrats in Ottawa. They also told us about the inadequate support they received. Many of them obtained no compensation for the injustice they lived. Those who did obtain compensation often had to wait years. They generally had to threaten to sue or actually sue in court the governments that had wrongfully convicted them.

Whereas previous Canadian commissions of inquiry greatly admired the English Criminal Cases Review Commission, which has been operating since 1997, we heard it has suffered from massive budget cuts that have increased caseloads and required most applications to get nothing but cursory reviews.

We were impressed by the New Zealand commission, created in 2019. We spoke to its chief commissioner as well as with two Maori commissioners. They genuinely wanted to treat applicants, including those from the over 50 percent Maori prison population (compared to 17 percent of the population), with more respect and dignity than these people received from the rest of the criminal justice system. At the same time, we also heard alarming concerns that the New Zealand commission was already overloaded with applications.

The uncertainty surrounding the full implementation of the report is one reason why I agreed to write this book. New legislation to establish a new commission has the potential to be the most important law reform with respect to wrongful convictions in a generation. At the same time, if the new commission is underfunded and does not have sufficient powers, the situation could possibly become worse for the wrongfully convicted. At the very least, the hopes that David Milgaard and other exonerees had for the commission would not be realized. The stakes could not be higher.

Another reason I am writing this book is that the wrongful convictions that have been unearthed and described in the Canadian Registry of Wrongful Convictions should be better known. Even recently corrected wrongful convictions are not well publicized or known. Without the clear-cut stories provided by DNA exonerations and a thriving investigative media, wrongful conviction amnesia may be setting in.