Canada would be willing to “align” its own EV incentives with those south of the border if the United States ensured that Canadian-made cars and trucks were eligible for President Joe Biden’s proposed tax credit scheme, he says. Prime Minister Justin. Trudeau.

The two countries have been making cars together for more than 50 years, Trudeau noted Monday. That alliance is increasingly threatened by Biden’s controversial proposal to encourage the sale and manufacture of “plug-in electric drive” vehicles that are assembled in the United States with union labor.

“We are working very hard with the United States to understand that this proposed rebate for electric vehicles only for US-made cars is obviously not good for Canada, but it is also not good for the United States,” Trudeau said at a press conference. . .

“There are a number of solutions that we have proposed. One of them would be to align our incentives in Canada and the United States, to make sure there are no slippages or unfair advantages on one side or the other. We are happy to do that.”

Deputy Prime Minister Chrystia Freeland and Commerce Minister Mary Ng warned Congress last week of retaliatory tariffs and other punitive measures if the tax credit proposal becomes law. In a letter published Friday, Freeland and Ng proposed making the Canadian-assembled vehicles and batteries under the US plan eligible, which would be worth up to $ 12,500 in tax credits for a potential car buyer.

However, Trudeau’s comments suggest that Canada could offer a comparable package that would apply to vehicles assembled in any country.

Friday’s letter was addressed to key members of the U.S. Senate, who are expected to vote in the coming weeks on the Biden administration’s $ 1.75 trillion social and climate spending package, which includes the new tax credits for electric vehicles.

However, it does not appear that Canada’s lobbying efforts have changed their mind in the White House.

“The president advocated for these tax credits because he wants to make it more affordable for the American people to buy electric vehicles, and because he feels it is … a great opportunity for American automakers,” press secretary Jen Psaki said Monday. when asked about the letter. .

Biden and Trudeau discussed the proposal at length when the two met last month in the Oval Office, he acknowledged, before suggesting that little has changed since then.

Canada Willing To ‘Align’ #EV Incentives With US To Avoid Tax Credit Crisis: @JustinTrudeau. #CDNPoli #USpoli #EVTaxCredit

“We have a good working relationship with Canadians. We had a good conversation about it, but I don’t have any additional policies that I would expect or changes to that,” Psaki said.

The federal government is already planning to remodel its existing rebate program, which currently only applies to new zero-emission vehicles with a maximum base price of between $ 45,000 and $ 55,000. Liberals vowed during the election campaign to spend $ 1.5 billion over the next four years to expand the program in an effort to get more electric vehicles on the road.

The US proposal amounts to a 34 percent tariff on electric vehicles assembled in Canada and violates the terms of the US-Mexico-Canada Agreement, or USMCA, Freeland and Ng wrote, not mentioning the affront. representing in a country that has been an American Partner in auto and truck building for half a century.

“We want to make it clear that if there is no satisfactory solution to this matter, Canada will defend its national interests, as we did when faced with unjustified tariffs on Canadian steel and aluminum,” the letter read.

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He promised an upcoming list of American products that Canada is prepared to target with tariffs, both inside and outside the auto sector.

Senate Majority Leader Chuck Schumer wants a vote on the legislation, which has already passed the Democratic-controlled House of Representatives, before Christmas. Few see the schedule as realistic, especially after Friday’s new economic data set the inflation rate at 6.8 percent.

Biden was scheduled to speak by phone later Monday with West Virginia Sen. Joe Manchin, a moderate Democrat who has doubts about the bill, including the proposed tax credit. The White House believes that Manchin’s vote is essential in a Senate evenly divided between Democrats and Republicans.

Psaki advised against viewing the discussion as a negotiation, but rather as “a conversation between two people who have been in public life for some time and have had bona fide discussions directly. This is just a continuation of that.”

Vehicles made in Canada comprise about 50 percent of US content, the letter said, and Canadian manufacturers import more than $ 22 billion in US auto parts each year.

“To be clear, we do not wish to go down a confrontational path,” it reads. “That has not been the history of the relationship between our two countries, nor should it be the future.”

The letter also threatens to hit the pause button on certain concessions that Canada has already made to US dairy producers under the USMCA, arguing that the tax credits for electric vehicles would comprise “a significant change in the balance of the concessions” agreed under. the agreement.

This Canadian Press report was first published on December 13, 2021.

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