Canada is fighting for a place at the table as the world turns to electric vehicles

OTTAWA – Canada is looking beyond the US to entice European companies to join forces to build supply chains for a greener auto industry, as a new protectionist push south of the border threatens the Canadian auto sector .

In the week before Prime Minister Justin Trudeau went to Washington in a tense effort to argue that the United States should aim to build supply chains across North America, and not just promote American industry, the Minister of Industry, François-Philippe Champagne, made his own world tour. .

Champagne traveled to the US, Mexico, Germany, Belgium and France, where it met with major automotive and industrial manufacturers as well as their government counterparts to market Canada as a critical player in the future of manufacturing. electric batteries, and key to comply with its climate action. commitments.

Champagne met with business leaders in the chemical, battery and electric vehicle sectors at Evonik Industries, Bosch, Mercedes, Eberspächer, Stihl, Porsche, Siemens, Max Aicher North America, Puritos, Roquette, Total, Stellantis, Alstom and Thales, as well as with European legislators.

“I think we have a once-in-a-lifetime generational opportunity to move towards electrification,” Champagne said in an interview, saying he is keen to build a new “ecosystem” of electric vehicles over the next 30 to 50 years.

Canada has been trying to position itself in that market for several years, but the effort has gained new momentum since countries signed stricter climate action plans that include stringent zero-emission vehicle sales mandates by 2030 or 2035.

And while US President Joe Biden tries to push the competition aside and give unionized US manufacturers a boost, Canada and Mexico are backing down.

Proposed rebates totaling $ 12,500 for US consumers purchasing electric vehicles that are built in US plants for unionized labor violate the continental free trade pact, Canada and Mexico say, and could ultimately hurt workers. in all three countries.

Ahead of Thursday’s meeting with Trudeau, Biden said the relationship between Canada and the United States is the “easiest” with which he has to juggle.

But Biden offered no indication that he or Democrats in Congress would backtrack on EV rebates or any other aspect of their “American Buy” agenda, which would also restrict non-US bidders from getting $ 1.2. trillion (US) in “rebuilding better” infrastructure investments.

And whether intentionally or not, the message from the US president could not have been clearer: On the day that Trudeau traveled to Washington to defend Canada on Capitol Hill, Biden traveled to Detroit to open a new electric vehicle for General. Motors. plant.

“We’re going to make sure the jobs of the future end here in Michigan, not on the other side of the world,” Biden promised after zooming in on a new Hummer EV.

“Here in Detroit, we are going to set a new pace for electric vehicles,” he said. “This is not hyperbole. It is a fact.”

But if the goal is to build an efficient and resilient industry, Champagne says Canada offers distinct advantages for the US and Europe: lots of renewable energy, stable electricity supplies, critical minerals that are key to producing batteries and semiconductors, work from like-minded and environmental standards and an already integrated car manufacturing industry that is transitioning to electric vehicles.

Canada and the United States face certain realities even if they try to go it alone, he said, noting that most of the chemical industry that makes cathodes necessary in the battery-making process is based in Europe.

So, Champagne’s speech notes that large mining companies are already based in Canada and that Canada has the only plant in North America to refine cobalt, which is used to make batteries.

In Washington, his message was simple. “If you want to meet the Glasgow climate target, what we have to do is innovate more together, build more together and sell more together to the rest of the world,” he said. “Therefore, it is in the best interests of both parties to work together, because we have made the two commitments that we want to achieve.”

Champagne’s trip to Europe was to sell the package.

“Sometimes I feel like a matchmaker,” he said. “I am talking to the mining company. I’m talking to the chemical company, which will make the cathodes, I’m talking to the battery assembly manufacturers, and I’m also talking to the (automakers) … because they all have skin in the game to build the ecosystem. “

Flavio Volpe, director of the Association of Manufacturers of Automotive Parts, says that Champagne is “on the trail of several investments in batteries” and is launching to Canada with force.

But Volpe said Canada’s ambitions could be thwarted by the immediate threat of proposed tax rebates to favor American cars that he said would certainly draw automakers south.

The Star, he noted, has reported on the uncertain future of the 3,163-employee Chrysler plant in Brampton.

“It is a critical issue,” Volpe said.

Canada and Mexico can hope to persuade the US to expand proposed tax rebates to include electric vehicles made in North America, but if Biden or Congress won’t budge, Volpe says Canada should launch a formal challenge.

Champagne, however, is an optimist who believes that Americans will realize the benefits of following an American strategy.

And he wouldn’t call his rush to European manufacturers an attempt to put Canadian EV eggs in other baskets. Rather, he says, “we want to negotiate between trusted partners.”

He dares to predict that the effort will soon produce results, both in the short and long term.

“I’m optimistic that part of this (investment) will decide to come to Canada,” he said, “but you have to be in his face, always, like Canada.”