Ford’s policy-on-the-fly ends badly with Tesla
Judge rules Ontario government unfairly targeted automaker with subsidy cut
Doug Ford’s Tories are learning that turning half-made-up bluster into real government policy often goes badly.
An Ontario judge has found that the Progressive Conservatives made Tesla a special target in their attack on green subsidies and treated the electric carmaker unfairly when they killed a rebate program for buyers after taking office.
The government arbitrarily made decisions that had no justification under any existing law, and “singled out Tesla for reprobation and harm without (providing) Tesla any opportunity to be heard or any fair process whatsoever,” Judge Frederick Myers of Ontario Superior Court found. Government ministers have a lot of executive authority, but they need to use it for legitimate purposes.
The judge quashed a transition program that gave buyers of other electric cars, but not Teslas, until Sept. 10 to finish their transactions and get rebates of as much as $14,000 for their environmentally friendlier vehicles.
The government can absolutely end the rebate program, he emphasized. But it constructed the temporary extension to beat up one company, and it can’t do that.
Tesla makes three expensive electric-car models and only its bottom-end “Model 3” was eligible for the rebate, covered cars that cost $75,000 or less. Tesla had about 600 of the $46,000 Model 3s on order in Ontario when the Tories killed the rebate.
When the Tories scrapped the rebates on July 11, they gave other dealers two months to get cars from manufacturers and deliver them to customers who’d already ordered them and the buyers would still be eligible for their subsidies. But the government kept Tesla out of the extension.
Why? The official reason was that Tesla doesn’t have dealerships in Ontario. Except it does: U.S.-based Tesla has a Canadian arm that is a registered car dealer in Ontario. It isn’t set up like other carmakers, whose dealers are typically separate franchisees, but if the government thought Tesla’s customers bought directly from the manufacturer, that’s technically not right. It might have checked.
The judge’s ruling went on to take down the poor bureaucrat the government sent in to justify its treatment of Tesla, an acting manager of policy and programs in the Ministry of Transportation whose background is in designing anti-climate-change programs, not dismantling them.
Vrinda Vaidyanathan testified that the point of extending the rebates was just to protect small “independently owned, franchised dealerships.” The thing is, the judge found that was the first time anybody mentioned the importance of independent ownership for the car dealers still benefiting from rebates
— in court. There’s no sign that detail came up when the government made its decisions in July.
“(The) witness was unable to point to any evidence of any consideration having been given to the actual economic design of the motor vehicle dealership industry in Ontario,” the judge wrote.
Instead the government, from the premier to Transportation Minister John Yakabuski on down, made things up as they went to make sure just one company got left out.
“The evolution of the program terms propounded by the minister lays bare the targeting of Tesla,” the ruling says.
Premier Ford shot his mouth off about Tesla quite a bit. The judge’s ruling quotes an interview with Hamilton’s CHCH TV station in which Ford complained about how “with the folks from Tesla, the common folks here in Hamilton have a big problem, giving rebates of up to $16,000 with our hard-earned money to millionaires buying $80,000 cars, $100,000 cars. Uh, we have an issue with that, we want to protect the little person.”
Teslas are toys for rich people, so screw ’em. Maybe Tesla should manufacture cars in Ontario and things would be different, Ford suggested.
The judge pointed out what a blarney-merchant the premier can be: “The evidence discloses that the rebates are limited to $14,000, the maximum car price for which subsidies may be paid is $75,000, not $80,000 or $100,000, and Tesla’s Model 3 is not the most expensive car receiving subsidies under the program.”
Hybrid SUVs from Mercedes, BMW and Volvo are in the same league, under the $75,000 limit but not by much.
Ford spoke after Tesla had filed its court challenge. He might as well have been testifying for the company. He certainly didn’t leave the impression that the whole thing had been carefully thought through.
Because it wasn’t. The government did a dumb thing because it needed to look consistent with its previous hard-blowing, backed up by reasoning that kept changing as facts kept boxing it in.
The Tories have similar problems with sex education (the curriculum now in abeyance doesn’t include the things its worst critics say), with electricity prices (not really Hydro One’s fault, and therefore not lowered by changing management at Hydro One), with the state of the province’s accounting (all but a tiny sliver of the books as the Liberals kept them were approved by the auditor general).
In all those cases, they’re doing big noisy things — lots of consultations, replacing the Hydro One board, naming grandiose commissions — whose effects will be cosmetic at best. Maybe the Tories will call those wins. Or maybe it’ll be really obvious before long what a mess they’ve made for themselves.