Dilkens expresses concern that Biden’s EV loans will hurt the Canadian auto industry

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Windsor Mayor Drew Dilkens on Friday criticized US President Joe Biden’s proposed electric vehicle subsidy package as a threat to the Canadian auto industry, comparing them to former President Donald Trump’s steel and aluminum tariffs. .


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As part of Biden’s massive spending bill aimed at reviving the post-COVID-19 U.S. economy, the U.S. government is considering offering up to $ 12,500 in subsidies for electric vehicles made in U.S. plants, by unionized U.S. workers. They largely use American parts.

“When we come to a new agreement (CUSMA), we have this new president who pretends to be more fair and reasonable and is following exactly the same path as his predecessor,” Dilkens said.

“I’m not sure that much has changed when you look at the White House in terms of the way they are approaching this.

“This is the kind of thing you do when you can’t compete on your own.”

Dilkens said he is not afraid that GM, Ford and Stellantis will renege on the roughly $ 6 billion of new investments in electric vehicle production they have announced for their Ontario plants.


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Potential damage to Southern Ontario’s auto industry lies in the construction of battery plants and a supporting supply chain alongside the existing automotive support sector.

“It is one of these initiatives that is clear at first glance that it goes against the rules of the World Trade Organization, but also the CUSMA agreement,” said Dilkens, referring to the trade agreement between Canada, the United States and Mexico that replaced the NAFTA.

“At the end of the day we will fight it and it will take us a couple of years to win it, but when we do, there will be a chill in the industry.

“That will make those looking to build battery plants and new plants to build electric vehicles stop and think, is it easier to build this in the United States?”

With Biden’s $ 1.75 trillion spending package creeping toward the finish line, there is a growing chorus of voices seeking to remove protectionist elements from electric vehicle subsidies.


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Mexican government officials have also spoken out this week against the subsidies.

Canada’s federal Minister for Small Business, Export Promotion and International Trade, Mary Ng, sent a letter to Washington last week exposing the simmering dispute.

Canada's federal Minister for Small Business, Export Promotion and International Trade, Mary Ng, is featured in a file photo.
Canada’s federal Minister for Small Business, Export Promotion and International Trade, Mary Ng, is featured in a file photo. Photo by screenshot /Windsor Star

Ng’s letter reminded Americans that the damage the proposal would inflict on the Canadian auto industry would also impact the United States due to deeply integrated supply chains.

Ontario Economic Development Minister Vic Fedeli followed up with a letter of his own on Oct. 26 sent to officials in the Biden administration and leaders of Congress and the Senate.

Both Ng’s and Fedeli’s letters were forceful in outlining Canadian intentions to launch a CUSMA trade dispute challenge if the United States goes ahead.


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Fedeli’s three-page letter also reminded Americans of their need to access critical minerals from Canada as vital to their vision of creating an electric vehicle battery supply chain in North America that reduces their dependence on China.

“Discriminating Canadian production runs counter to the goals of the Canada-US Joint Action Plan on Critical Minerals Collaboration, particularly given the importance of critical minerals to the future of electric vehicle production in North America,” Fedeli wrote.

“Ontario has deposits of key critical minerals and metals needed to make batteries and electric vehicle parts, such as graphite, nickel, aluminum, copper, lithium, cobalt, manganese, molybdenum and rare earth elements.


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“To minimize reliance on less reliable business partners, it is important that we continue to cooperate in critical minerals to maintain the viability of our two automotive sectors.”

A Bloomberg study ranks Canada as the fourth largest country in the world’s battery supply chain and its growing mineral supply and processing capabilities are expected to move it to third place by 2025. The US ranks No. position 15 th in the study.

This file photo shows Ontario's Minister of Economic Development Vic Fedeli.
This file photo shows Ontario’s Minister of Economic Development Vic Fedeli. Photo by Jack Boland /Toronto Sun / Postmedia Network

Dilkens met with senior Global Affairs officials in Ottawa in early October about this file.

“The federal government is very committed on all the right fronts to removing these provisions before they become law,” Dilkens said.

The mayor added that he expected to discuss the issue as part of a Friday afternoon call with Fedeli.


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After speaking with a few OEMs, Dilkens feels that Canada has allies in the auto industry.

“We have had discussions with two automakers who have expressed some concern that these provisions are not helpful,” Dilkens said.

“They have their government relations staff working to find what they think is an easier path.”

Dilkens hopes that as Congress and Senate begin to look at the spending package, along with continued lobbying from Canada and Mexico, a resolution can be found.

“It will cost all of us money to fight this: Canada, the United States and Mexico,” Dilkens said.

“There is no doubt that we will win, but it is about what happens between now and the day we win.”

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