Terence Corcoran: Markets still prevail, from EVs to Anglo-Teck

Exposing the risks of state capitalismYou can save this article by registering for free here. Or sign-in if you have an account.In a global world seemingly dominated by big government economic interventions and industrial policies fabricated out of the fantasies of politicians and bureaucrats — known as state capitalism — there are developments that suggest markets still prevail.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Two such occasions, one Canadian and the other international, stand out as welcome signs that market realities dominate. In Ottawa, Industry Minister Mélanie Joly’s major — even embarrassing — backtrack on the $70-billion merger of Teck Resources and Anglo American shows that when the cards are on the table, governments must bow to private markets.Another victory for market reality over government central-planning fantasies is the political backtracking on electric vehicles and, more broadly, on climate policies in general.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.A few weeks ago, Joly’s staff made a point of correcting a media report that the government’s Investment Act decision on the Anglo-Teck merger would be coming “next month.” Not true, said the minister’s staff. What Joly had said is that the decision would come “in the next months,” thereby pushing the deadline deep into 2026.So why was the decision suddenly released this week, essentially within days rather than months? And, more importantly, what happened to all the minister’s blither about how the announced merger deal was not “enough” and that the new company should, among other things, move its primary stock listing to Toronto rather than London?Based on information released Tuesday by the companies, nothing significant has changed since Joly launched her not-enough statements. The new company has committed to a 15-year series of targets and spending plans, but nothing on the list would amount to a meaningful change in corporate intentions and strategy. For example, it commits to spending $4.5 billion in Canada over the next five years. Was Teck not planning such spending before this week?The sudden appearance of Ottawa’s decision follows the Supreme Court of British Columbia’s final approval of the merger on Dec. 12 and a massive majority vote by Teck shareholders approving the merger on Dec. 9.Ottawa’s sudden approval of the merger confirms the primacy of a market-driven investment environment over a planning-driven environment. Anglo-Teck was a test of Canada as a market economy, and it passed the test over the heads of Joly and the Carney Liberals.Around the world, the speeding electric vehicle market is slowing down as market reality begins to overtake automobile sales. The biggest hit is taking place in the United States, where EV sales fell 42 per cent in November following the removal of government tax credits. Left to the mercy of market prices, sales inevitably declined.Globally, EV sales grew last month at their slowest pace (six per cent) since February 2024. At the same time, the European Commission this week unveiled a plan to relax the EU’s ban on new internal combustion-engine (ICE) cars beginning in 2035. The proposal was described by activists as the region’s “biggest retreat from its green policies in recent years.” EU automakers, however, argue the reduced target does not go far enough in light of market realities.The EV market in Canada has also been tilted by the inability of governments to overcome the challenge of completely replacing ICE vehicles with electric automobiles — much to the distress of activists. New statistics released this week show new Canadian EV registrations dropped from 18 per cent to nine per cent of sales in the third quarter while ICE sales rose.Clean Energy Canada, a Simon Fraser University think-tank, blamed the decline in Canada’s EV market on Ottawa for having “made a number of decisions that have collectively broken Canada’s EV market over this past year.” The opposite is true. In reality, it is the market that has broken another part of the federal government’s industrial plan to remake the automobile industry. Electric vehicles may well be the way of the future, but the future cannot be driven by massive government interventions. It takes a market. As Ford CEO Jim Farley said this week: “We can’t allocate money for things that will not make money.”EV market troubles are only one part of a shifting global reality. Industrial strategies and state planning cannot overcome and crush the market economy. Even corporations cannot break the market reality they are dealing with. A Financial Times feature last week documented how two British oil giants — Shell and BP — failed to transform their companies into pioneers of the green energy transition away from fossil fuels.In 2021, the two companies set out to become transition leaders by investing billions in electric and other non-emitting energy sources. The plan failed as BP and Shell confronted internal operational turmoil, unco-operative markets and unhappy shareholders. Both companies had to write off billions of dollars in misguided investments.The BP-Shell fiasco highlights a bigger trend.

Wall Street Journal columnist Greg Ip last weekend raised the question: “Whatever happened to the climate crisis?” Activists such as Bill Gates have pulled back, for example. But Ip writes that the real cause of change in the climate debate is “affordability, and affordability won.”By definition, that means the reality of the market won. May it always be so.• Email: tcorcoran@postmedia.com Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.