US Zero Emission Vehicle Tax Credit | Canadian auto industry calls for a response

(Ottawa) The business and labor sectors are in dire straits. Faced with the Biden administration’s “devastating” proposal to offer generous tax credits for the purchase of zero-emission vehicles built in the United States, many are calling urgently for a plan of attack to do so. step back the US president.

Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland took advantage of their visit to Washington a few days ago to warn the big names in the US Congress, Democrats and Republicans, of the consequences this measure would have – in violation with the new NAFTA, according to the Canadian camp – on continental trade.

However, they returned home empty-handed. Even on the day of their return to Ottawa, the House of Representatives passed the mammoth bill Buy American in which is found this proposal for incentives of up to $ 12,500 for the purchase of electric vehicles. The game is not over, the ball is now in the Senate’s court.

But now is not the time to wait, believe many players who would be harmed by the measure.

On the union side, we are already concocting a response to the “declaration of war”, said in an interview with Press Jerry Dias, president of the powerful Unifor union, which represents tens of thousands of workers in Canada’s auto industry.

He returns this Thursday from Mexico City, where he went to convince Mexican trade unions to form a united front to curb American inclinations.

The leader is proposing a draconian strategy to say the least: cut supplies to the United States temporarily in order to prove how integrated this market is.

If they want to move forward, I would pick a date when Canada and Mexico would stop sending all coins across the border. It would cripple the American auto industry in a minute.

Jerry Dias, President of Unifor

Whether the threat is carried out or not, one thing is certain, Canada cannot “have a long-term approach” because “it is making decisions on investments as we speak”, argues the pugnacious union leader.

He urges the government to bring together the stakeholders to launch an offensive similar to the one that had been deployed, in a concerted and sprawling manner, ahead of the renegotiation of NAFTA.

An “emergency” approach required

This is also the opinion of Robert Asselin, Senior Vice-President of the Business Council of Canada. “You have to have this same emergency approach, threats of retaliation, make it a kind of daily obsession. We have to talk to all the governors of important states, members of Congress, ”argued in an interview this former close advisor to Justin Trudeau and former Minister of Finance Bill Morneau.

Because “they, the Americans, they operate in a new economic ideology. They have a protectionist industrial policy, and the last thing they think about is Canada, ”he says.

In its negotiations, the Trudeau government could use as a selling point the extent of its reserves of critical minerals, which go into the manufacture of batteries for electric vehicles, adds Mr. Asselin.

“We are the ones who have them, these minerals, and they need them,” he says.

Prime Minister Trudeau put forward this selling point last week in the American capital.

Why would the United States source its supplies from China rather than turn to its “reliable” neighbor to stock up on these minerals? Yes, “it’s going to be more expensive” to buy in Canada – but it’s better than doing business with some countries that treat their workers with such low regard and, moreover, “don’t care about environmental standards” , he insisted last Wednesday.

” It’s always the same thing ”

Former Quebec Premier Jean Charest believes that we should also bet on this asset. “It’s a major issue for them. We could do a package around that and make it obvious what should be, ”he points out. “The principle around which Biden organizes all his policies is in reaction to China,” explains the one who was part of the government behind the original version of NAFTA.

Without necessarily going so far as to deploy an operation “on the same scale” as that orchestrated to counter the intention of former President Donald Trump to throw the tripartite agreement in the trash, the situation demands that we have an approach. “Team Canada” to find a solution that “does not lose face” to Joe Biden, he argues.

Yes it has to. Because power in the United States is very dispersed… And you have to be very insistent, because the Americans are hard of hearing.

Jean Charest

The former Prime Minister is not overly moved by this affront to Canada. “It’s always, always the same. It’s still the same dynamic. You have to go back again and again. The best method we know to counter that is the one we have used all the time, that is to say that you involve everyone, ”he remarks.

The Trudeau government has not yet wanted to open its game or specify a strategy.

“We will always take a Team Canada approach, working with Canadian businesses, exporters, manufacturers and workers, as we have done over the past six years and as we will continue to do,” said Chris. Zou, in the office of the Minister of International Trade, Mary Ng.

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