Forced conversions: Federal EV regulations can supercharge discord along the Fourth Meridian in Canada

The federal government recently unveiled plans to curtail the sale of diesel and gasoline vehicles by 2035 to align with Canada's commitment to diminish reliance on fossil fuels and curtail greenhouse gas emissions.

This decision is poised to ignite tensions with cohorts reluctant to transition to electric vehicles (EVs), perceiving this move as federal overreach. The question arises: should the federal government dictate vehicular power sources in Alberta, the Northwest Territories, or elsewhere?

Alberta has already voiced apprehensions about Ottawa limiting legal vehicle use and purchase choices. The province argues for provincial autonomy in such matters, suggesting federal encroachment beyond its jurisdiction. Conversely, Canada's international commitments, like reducing greenhouse gas emissions, might necessitate federal intervention. The feds are regulating the EV policy under the Canadian Environmental Protection Act.

The question about provincial autonomy can be further contested by local governments that may also prefer local over provincial control in determining vehicle purchasing options. Hence, establishing jurisdiction and consensus sooner than later is critical.

Historically, government intervention has dictated features of consumer durables, like air conditioner coolants or certain aerosol restrictions. EVs are the latest subject to such governance, with more to follow.

The federal plan gradually escalates to a total ban on fossil fuel vehicles by 2035. According to CBC, EV sales regulations will commence at 20% in 2026, escalating annually, with a target of 60% by 2030. A credit-sharing scheme akin to the 90s emissions trading programs has been established, allowing compliant manufacturers to trade excess credits with lagging counterparts.

According to the federal government, British Columbia and Québec already meet the threshold, with over 20% of new vehicles being electric. The federal government will likely sway Saskatchewan and incentivize Ontario, while the Maritimes are expected to conform. Electric vehicle adoption correlates with the affordability of electricity, particularly from renewable sources, and a widespread network of superchargers. Not to mention that Quebec generates 94 percent of its electricity from hydroelectric resources, whereas Alberta generates 89 percent of its electricity from fossil fuels. No wonder Quebec is a ready convert to EVs.

Alberta's Primer, Danielle Smith, is not opposed to EVs but is concerned about how she believes the feds are rolling out the plan. Calgary Herald quoted Smith, arguing that "there’s no way the province can generate enough electricity to charge hundreds of thousands of electric vehicles every day — not to mention the vast challenge of building charging stations in every corner of the province."

The challenge lies in Alberta, where long-standing grievances with federal environmental regulations have strained relations and impacted the local resource sector, leading to significant economic hardship, evidenced by high office vacancy rates and stagnant housing prices before and since the pandemic. Alberta's housing markets have recently exhibited signs of strength. Green shoots of economic recovery are visible, but they must be sustained.

In Alberta, convincing the government and populace to embrace EVs is more complex. The local economic structure, reliant on larger vehicles integral to production processes, complicates the shift from combustion engines to EVs, necessitating access to affordable, reliable, large-sized, battery-powered commercial vehicles.

Ottawa must be attuned to Alberta's economic struggles, seeking to build economic and political consensus before revolutionizing the vehicular landscape. Requiring Alberta's electricity grid to be net zero by 2035 is another matter that concerns the province, whose natural resources will remain untapped under federal regulations.

The Fourth Meridian is one of the longest straight-line subnational borders between Alberta and Saskatchewan. The Meridian is more than a geographic marker; it represents a divide in perspectives. To preserve harmony, Ottawa must engage more deeply with Albertans, recognizing their disproportionate economic challenges due to national resource sector policies.

Regionomics Inc. is a Canadian consultancy specializing in applying machine learning and predictive analytics to find solutions for economic challenges. For information, please email Murtaza Haider at [email protected] .