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

[MichMan]

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/

[Fiendish Thingy]

1. No explanation of exactly how the tax credits harm the auto industry, only rhetoric. Nt

[MichMan]

3. It was clearly stated in the link

"Vehicles built by union workers would qualify for $4,500 worth of credits, and vehicles with batteries made in the U.S. would get an additional $500 consumer credit. Beginning in 2027, vehicles would have to be assembled in the U.S. to qualify for the full $12,500 worth of credits. "

[Fiendish Thingy]

5. Still missing lots of information

What models and how many EV’s are made by non-union workers in Canada? How many of those vehicles are exported to the US vs. Sold in Canada?

The level of negative impact on Canada’s auto industry is unclear based on this article alone. Of course, Canada could ramp up their EV manufacturing with similar incentives, as well as more aggressive measure to reduce extraction and burning of fossil fuels.

(I live in Canada, and if non-union workers are making EV’s, fuck ‘em if they lose their jobs due to US incentives).

[MichMan]

7. It doesn't matter how many are being built now

If the US manufacturers are determining where to source future EV production, would they locate it in Canada if the US tax credits meant that vehicle would be more expensive to US consumers than one built in the US?

If I worked for one of the assembly plants in Canada, I would be concerned. From my understanding vehicles built in the US and by US union workers will get much more favorable tax credits than those imported from other countries.

[napi21]

2. I understand why Biden proposed this tax. Every EV that's purchased reduces the Fed Tax on

gasoline which is how we pay for our road upkeep. If the EV tax is such a problem, how does Canada pay to keep their roads in good shape? What other method could we use that would fund road repair and not tax people who don't use those roads?

[MichMan]

4. It has nothing to do with funding the roads

The dispute is over the tax credits for buying an EV that are weighted towards US assembled vehicles built by US union workers.

[Fiendish Thingy]

6. What are you talking about? The article is about tax CREDITS, reducing the cost of EV's

Not an additional tax on the purchase/ownership of EV’s.