When Henry Ford started paying his factory workers $5 a day more than a century ago, he transformed them from employees into customers for his Model-T cars.
Now, according to a new report, the Ontario government could do the same for its burgeoning electric vehicle sector by subsidizing the purchase of electric school buses.
Incentivizing public school boards to purchase locally-built electric buses has the potential to revive the province’s medium and heavy-duty vehicle manufacturing industry, which nearly collapsed after the financial crisis of 2008, said the report, put out by the Pembina Institute, a clean energy think tank.
“This presents an opportunity for the government to expand its EV manufacturing vision beyond cars,” said Chandan Bhardwaj, the report’s author.
Much like regular EVs, the electric bus market is booming, projected to reach $3.1 billion (U.S.) in global annual sales by the end of the decade, with the North American market set to double in the next two to three years, according to the report. Canadian manufacturers, such as GreenPower Motor Company in B.C, New Flyer in Manitoba and Lion Electric in Quebec, already have 45 per cent of the electric school bus market, and these manufacturers are supplied by many parts makers across the country, including in Ontario.
But adoption in Canada is lagging, with only 300 electric school buses (out of 50,000 total) on the road. Unlike New York state, which has committed to a 100 per cent electric school bus fleet by 2035, or P.E.I., which will have all public school buses electrified by 2030, Ontario doesn’t currently have any goals for decarbonizing school transport.
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Even though the federal government committed $1.5 billion to zero-emission school and transit buses as part of its pandemic infrastructure plan in 2020, additional local subsidies could supercharge demand, enough to re-establish local production in Ontario, the report said.
If 65 per cent of Ontario’s school bus stock is electrified by 2030, the report projects it would create more than 13,000 jobs and generate nearly $2 billion of economic output, not to mention a reduction of 350,000 tonnes of CO2 per year.
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“Accelerating the electrification of school buses can be done cost effectively and will additionally contribute to the revitalization of (small and medium-sized enterprises) in the auto sector, lower Ontario’s carbon emissions, and make a meaningful contribution to positive health outcomes,” the report said.
Fleet vehicles like delivery vans, transit buses and school buses are widely seen as the path of least resistance to electrifying medium and heavy-duty vehicles. Among them, school buses are likely going to be the first to go entirely electric because of their relatively short and predictable routes and their long downtime during the day and overnight, allowing for recharging.
The report estimates that each electric bus will save school boards $17,000 per year in fuel and maintenance costs.
“Electric school buses are one of the easiest medium and heavy-duty vehicles to electrify. They have clear emission reduction and clean air benefits for our kids. Plus we’ve got home grown electric bus manufacturing capacity. I have no idea why Canada is not making electric school buses a bigger priority,” said Joanna Kyriazis, clean transportation program manager at Clean Energy Canada.
It’s now time to revisit the purchase subsidies, at least for school buses, the report said.
“To date, Ontario has primarily invested in the supply side of the EV sector while demand-side policies have been overlooked, despite evidence that demand focused policies such as purchase incentives are more effective at growing local markets than are subsidies targeting manufacturers,” the report said.
During the pandemic, a group of laid-off autoworkers in Oshawa set up a group to advocate for the repurposing of the then-shuttered GM plant to make green vehicles. During their talks with the government and the auto manufacturers, electric school buses came up as a product that Canada should be making more of.
“It’s a great idea,” said Tony Leah, a retired GM worker who volunteers with Green Jobs Oshawa. “Using fleet vehicles to expand electrification is tremendous.”
“It’s an eye-watering amount of public money that they are handing over and it’s for private corporations,” he said. “They could look at expanding public ownership and control.”
Flavio Volpe, president of the Auto Parts Manufacturers’ Association, said that while this vision of Canadian-made all electric school buses is “noble” and “honourable,” it ignores the fact that World Trade Organization rules would not allow the province to require that they’re made in Ontario.
“Suggesting that we take a public procurement and direct it locally is naive to our trading partners’ presumed immediate response,” he said.
Volpe pointed to the Green Energy Act, which required a percentage of wind and solar equipment to be manufactured locally. Japan and the E.U. appealed to the WTO and won. The promised green manufacturing jobs in Ontario never materialized.