October 23, 2021

Canada says EV tax credits would cause 'serious' harm to auto industry

Washington — The Canadian government argued in a letter to congressional leadership Friday that "the protectionist elements" of proposed electric vehicle tax credits would damage the North American auto industry and aren't consistent with existing trade agreements.

Canadian Trade Minister Mary Ng told lawmakers and officials in the Biden administration that the two nations' auto supply chains are deeply integrated, and the proposed credits "would cause serious and irreparable harm" to both the Canadian and U.S. auto industry.

Canada's Prime Minister Justin Trudeau is accompanied by Mary Ng, Canada's Minister of Small Business, Export Promotion and International Trade, as they arrive for a meeting with Ethiopian women entrepreneurs, in Addis Ababa, Ethiopia Sunday, Feb. 9, 2020.
"If passed into law, these credits would have a major adverse impact on the future of EV and automotive production in Canada, resulting in the risk of severe economic harm and tens of thousands of job losses in one of Canada’s largest manufacturing sectors," Ng wrote in the letter obtained by The Detroit News. "U.S. companies and workers would not be isolated from these impacts."

Ng stressed the interconnected nature of the two auto economies: Every vehicle assembled in Canada contains around 50% U.S.-made parts, the two countries are the top importers of each others' auto exports, and the two countries agreed earlier this year to collaborate on sourcing critical minerals needed to make electric vehicle batteries. She also wrote that the proposed policies are inconsistent with trade obligations under the United States-Mexico-Canada Agreement, and that a weaker Canadian automotive sector would negatively impact the Great Lakes region in particular.


"Canada and the United States share the common objectives of transitioning to green economies, combating climate change, and ensuring the vehicles, components and critical minerals of the future are produced here in North America," she wrote. "Canadian unions and labour standards are as robust as those in the United States. Therefore, it is imperative that Canadian assembly, including Canadian unionized assembly, is not discriminated against and is eligible for the maximum incentive available."


https://www.detroitnews.com/story/business/autos/2021/10/22/canada-says-ev-tax-credits-would-cause-serious-harm-auto-industry/6138806001/