Giving credit where it’s due
I’ve been known to be critical of the Liberals – both provincially and federally – from time to time. And believe me, I’ll be critical of them again. But I’m also willing to give credit where credit is due, and Dalton McGuinty’s cash-strapped government deserves kudos for launching a $15 million incentive program for the purchase of hybrid and alternative fuel-powered commercial vehicles.
Such incentives are widely available in the US, and have helped edge hybrid vehicles closer to the mainstream. Without government incentives, very few fleets are going to shell out the extra $30,000-$40,000 a hybrid truck typically costs. The bean-counters are often too short-sighted to see the value that can be achieved long-term through the fuel and maintenance savings delivered by these types of vehicles. The government really does have a role to play in helping get the ball rolling and encouraging the adoption of environmentally-friendly commercial vehicles.
Thanks to the Ontario government’s grant program, announced yesterday, more fleets will have the opportunity to invest in environmentally-friendly vehicles and see for themselves just how much they save in fuel costs over time. I’m also pleased to see the program is retroactive to August, 2007. Early adopters should not miss out on the funding – companies that have already purchased hybrid or alternative fuel commercial vehicles should also be rewarded.
The details of the grant have yet to be released, but I have a feeling a lot of companies will line up for the funding when applications are accepted beginning at the end of November. The benefits of the incentives are two-fold. First, companies will see for themselves that there really is value in investing in ‘green’ commercial vehicles. Ideally the fuel savings will outweigh the purchase price premium and fleets will continue to purchase hybrid vehicles well into the future, even without government grants.
Secondly, the program will result in increased sales of hybrid vehicles, which will help drive down the purchase price as economies of scale make building hybrid vehicles more cost-effective.
I don’t think hybrid or alternative fuel-powered vehicles are the fix for all the industry’s challenges. But I do think they do have a place. In the right application, these vehicles can deliver substantial fuel savings for fleets and at the same time produce less emissions, which benefits us all. It’s been a long time coming, but the Ontario Liberals got it right with this program. Let’s hope some federal funding will follow.
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In North America Trucks and Cars have become to large and Consume too much fuel. If you recall in the Early 70’s Import Trucks and Cars were compact. North America demanded from the Japanese Auto Makers Larger Vehicles. We cannot afford for the sake of our environment to drive these Gas guzzlers anymore. We import used Japanese Mini Trucks and Vans. Check them out and see for your self West Shore Auto Victoria BC Canada http://www.minitruck.ca We sell Daihatsu Hijet, Suzuki Carry, Honda Acty, Mitsubishi Minicab and Subaru Sambar. All of which are powered by 660cc water cooled engines and weigh around 1400lbs. See what the North American Auto Makers have been missing out on. New and Used Mini truck parts avaliable as well. This is the wave of the near future. You will see more Japanese Mini Trucks and Japanese Mini Vans or Kei Trucks as they are called in Japan on your city streets.We can ship Japanese Minitrucks to Edmonton Alberta, Saskatoon Saskatchewan, Winnipeg Manitoba, Toroto Ontario, Quebec, Halifax Nova Scotia by enclosed Train Car.
Thanks for the response, Robert. Interesting nugget from the Liberal budget.
I am always wary of so-called ‘handouts’ due to past abuse and the politically-charged handouts for the sake of handouts.
But in certain situations, I see real benefits, and this is one of them. Hybrid commercial vehicles deliver real savings and environmental benefits in the right applications. But since they’re still produced in small volumes, the up-front premium customers must pay for these vehicles is exorbitant. Without government incentives, the purchase price is pretty much a deal-breaker here in Canada.
I’m fairly confident the Ontario program will prompt some of the fence-sitters to finally give hybrids a chance – and that will start the flow of real-world performance data that will hopefully have a snowball effect that will lead to the more widespread use of hybrids, which are a perfectly viable technology. As order intakes increase, purchase price will decrease. Ultimately, that’s what I see happening here and if so, that makes this a pretty effective ‘handout.’
this is what I usually say. great blog post, indeed.
“Giving Credit where Credit is due” all in a credit crunch economy…
Interesting perspective James, but I’d like to know where government handouts stop… philosophically. I have a friend who grows organic vegetables, good for the environment (no nitrogen fertilizer) as well as the body. Should he lobby the government for funds as well? Are funding, incentives and government interventions really good for the economy? Shouldn’t necessity breed the inventions to foster economic stimulation? What better environment produces REAL innovations than the necessity stimulated by high fuel prices?
I remember in 1992 I was talking with a driver about their recent purchase of a new truck. He was considering trading off his 10 month old truck for a new one. His 1991 model engine was mechanical and getting 5.5 MPG. The new ones off the lot were getting 7 MPG and the difference paid for his “loss” (sunk costs) in less than a year. Talk about innovation and economic stimulation!
Counter that experience with what happened in 2001-2002 when the new “emissions standards” stimulated the reverse incentive for new truck purchases. Add to that the increase in diesel fuel processing requirements (creating an INCREASE in barrels of oil needed for the same miles driven) and it shows “going green” exacerbated global oil demand, economic stimulation, as well as the current month to month red ink. Thank GOD for the coming recession that aids in bringing down the demand for oil… or a barrel would have ended up costing $250+.
I too believe in giving credit where credit is due. So let me provide a “credit” worthy quote:
“… Inappropriately designed assistance to business can be far more damaging to the economy, over time, than a simple static accounting of costs and benefits might suggest. This applies particularly to those forms of assistance which help to sustain, or to subsidize investment in, activities that are not competitive. As the OECD Jobs Study concluded: “Subsidies tend to operate in exactly the opposite way from what is needed: they slow rather than stimulate adjustment; they discourage rather than encourage innovation; and they tend to become permanent…. reducing the kind of business support that inhibits economic adjustment can lead to increasing net job creation and income in the economy over time… …In light of these considerations… Further Steps should be taken to determine whether the redesign of certain subsidies and other supports in, for example, transport and agriculture could lead to a more efficient transportation system and to a more internationally competitive agri-food industry, better adapted to Canada’s inherent advantages.”
So now you think I’m a right wing wacko? Think this is a quote from a conservative? Maybe a former Alliance party member? Probably a Reform philosopher? Nah! Its an excerpt from the 1994 Federal budget (page 50 of 87) presented by Paul Martin… a Liberal. http://www.fin.gc.ca/Archive/NFrmrkEcPol_e.pdf
Your right, give credit where credit is due, or we’ll end up spinning our wheels in government spending forever.