Last month, the Macdonald-Laurier Institute published a paper with a no-minced-words title: Subsidies without markets: Canada’s unravelling EV strategy . Its author, Institute senior fellow Jerome Gessaroli, calls Canada’s continuing EV (electric vehicle) escapade a misguided, subsidy-driven, top-down attempt to jumpstart a domestic industry in which we have no particular economic advantage. Even after a change in prime minister, Ottawa continues to operate in another dimension when it comes to automotive industrial policy. The latest iteration of throwing good money after bad is a “feasibility study” to determine the prospects of building a made-in-Canada EV based on “Project Arrow,” the prototype electric vehicle dreamed up by the Automotive Parts Manufacturers Association ( APMA ), whose core objective, it says, is to “enhance the profile and success of Canadian automotive supply manufacturing.” The proposed study is budgeted at around $20 million, a big amount for us ordinary humans but modest compared to the $52 billion in subsidies, tax credits and big cheques so far channelled to largely failed or failing EV and battery initiatives by the federal, Ontario, and Quebec governments. Ottawa’s cheque-writers could save taxpayers the $20 million by focusing instead on the demand rather than supply side of the EV industry. Stand on the corner of any major downtown intersection and ask the average Canadian about EVs. Consumer response is a long list of concerns: too expensive, range anxiety, poor charging infrastructure, lengthy charging time, lousy cold weather performance, high insurance and repair costs and so on. Such demand-side negatives expose the risks of subsidy- and mandate-driven industrial policy myopically sidelining market dynamics, all at great cost to our nation’s treasury, which is currently running an annual deficit of $68.5 billion, according to the Parlilamentary Budget Officer, with a blockbuster budget about to be delivered. People seem to forget that “Field of Dreams” — “if you build it, they will come” — was just a movie. And that W. P. Kinsella, who wrote Shoeless Joe, on which it was based, was a specialist in magic realism. In real life, unlike fantasy novels and movies, if you build it, they don’t necessarily come. Vast amounts of money can be lost by failure to understand that. Magic realism is not a safe genre for prime ministers, industry ministers or finance ministers. There’s no doubt that Canada’s auto sector and its supply chain could build an all-Canadian EV. The production and labour resources are in place. But the technology is not — as evidenced by lukewarm adoption that chills to cold when consumer subsidies are withdrawn. Given how many EV and battery projects have been delayed, downsized or outright cancelled both by start-ups and by giant legacy global automotive players alike, it’s safe to assume that no private sector capital would ever invest in such an enterprise unless prodded by governments. Powered only by the fumes of the Trudeau/Guilbeault government’s deeply flawed mandate and subsidy policies, the proposed Project Arrow “feasibility study” is clearly on the wrong side of history, technology and market realities. The goal of economic policy should be to allow Canadian consumers , not the operators of Canadian supply chains, to decide which goods and services Canadians consume. To save and protect Canada’s (i.e., Ontario’s) auto sector policymakers should heed the recommendations of the Macdonald-Laurier paper and shift policy away from a top-down model to one that creates conditions for competitive, self-sustaining investment attuned to demand-side awareness. More generally, Ottawa’s newly announced nation-building projects need rigorous reality checks to insure immunity from aspirational contagion and political hubris. The newly-announced AI Strategy Task Force looks like yet another instance of government overreach, with potentially disastrous effects on both competition and the public finances. As usual, task force membership is heavy on academia and thin on owners and operators. As with autos, best to let the private sector sort this one out for itself. For a trade deal tomorrow, sacrifice these two dinosaurs‘Vasa syndrome’ is killing Ontario’s auto sector A hands-off approach to what Canadians produce and consume will produce results that fall far short of the seminar-room ideal but far ahead of rent-seeker political consensus. Michael Nitefor is founder and president of Toronto-based Air Lab, Inc.