TRUE NORTH COLUMN: Will the push for electric cars shock your wallet? Nobody knows

The federal government has made it clear that it wants to get gas cars off the road and have you drive an electric vehicle (EV) instead. But even if you don’t decide to make the switch, how much will this push cost you through your electricity bill?

Nobody seems to know.

new report from SecondStreet.org looks into the federal government’s ban on the sale of new gas-powered cars by 2035. Specifically, we asked provincial governments and utilities (which are responsible for electric grids within their borders) if they had any analysis on how the push for widespread EV adoption would affect Canadians’ power bills. None had any estimates. 

While there aren’t any concrete numbers, there are many reasons the gas car crackdown could cost you big money on your utility bill. 

For one, putting millions of EVs on the road will mean that a lot of new stuff needs to be built. Power plants to fuel the extra demand, big transmission lines to get that electricity into cities, towns and rural areas, upgrades to transformers and other local infrastructure, and thousands of EV charging stations.

All of that can’t be cheap. So who’s going to pay for it?

Manitoba Hydro gave us a fairly clear answer. 

“If the utilities/ratepayers are to fund the necessary distribution system upgrades to power EVs then it will result in higher utility charges. Increases in utility costs, due to distribution system upgrades, would be spread across the entire rate base,” the utility said.

In short, everyone who pays a power bill will probably have to pay more to fund the government-mandated switch to electric cars. 

Is this fair for an Albertan farmer who loves his Ford F-150 and maintains it for a decade after 2035? Or someone who lives in downtown Montreal and doesn’t even have a driver’s license, instead taking the Metro? 

Another issue with this policy is that lower-income people will feel the pinch the hardest. Simply put, a bigger chunk of their paychecks goes towards paying the power bill. With the price of food, housing, and pretty much everything else going up, can people who are struggling really afford another jump in expenses? 

The fact that nobody knows the cost is a major red flag for this policy, but we also uncovered a number of other problems with making everyone go electric.

EVs tend to be much heavier than their gas-powered counterparts. The Ontario government noted that this “causes exponential damage to pavement/bridges, leading to exponential costs associated with repair/replacement. This leads to increased emissions related to the repair/replacement of infrastructure, and premature asset depreciation.”

Do you think construction is bad in Winnipeg, Toronto and Regina now? The EV mandate could make it worse. 

Outside of big cities, we have to consider people in northern and rural areas. Manitoba Hydro, again, had some good information, noting that “some isolated First Nations in Manitoba are serviced by long seasonal winter roads… there are no charging services along many of those routes nor would it be easy to supply them with existing distribution infrastructure.”

This isn’t just the case in Manitoba – there are certainly communities across the country in a similar situation.

These are just a few examples of major challenges with this idea.

There’s nothing wrong with buying an electric car. More competition is good in any industry. But if the federal government wants to push one particular option as the solution for an entire industry, they need to do their homework first.

The responsible thing to do would be to pause the gas-powered vehicle ban, figure out how a massive push towards EVs will impact Canadians’ power bills, and show that analysis to the general public.

Canadians might not support the ban after seeing how much it shocks their wallets.

Dom Lucyk is the Communications Director with SecondStreet.org, a Canadian think tank.

This column was originally published on November 25, 2023.

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.