Purchases of electrical automobiles | Canada is able to align its incentives with these of america

(Washington) Prime Minister Justin Trudeau says Canada will ‘align’ its own EV incentives with those south of the border if Canadian-built cars and trucks can qualify for proposed state tax credits – United.

Posted on 13.12.2021

Mr. Trudeau noted that the two countries have been building cars together for more than 50 years – an alliance threatened by President Joe Biden’s efforts to boost sales of vehicles made by unionized workers in the United States .

Deputy Prime Minister Chrystia Freeland and Trade Secretary Mary Ng last week warned Congress of retaliatory tariffs and other punitive measures if the tax credit proposal becomes law.

In a letter released Friday, Mr.my Freeland and Ng proposed qualifying vehicles and batteries that are assembled in Canada for incentives under the US plan, which would total up to $12,500 in tax credits to a prospective car buyer.

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

The federal government is already planning to overhaul its existing rebate program, which only applies to new zero-emission vehicles with a maximum base price between $45,000 and $55,000.

During the federal election campaign, the Liberals pledged to spend $1.5 billion over the next four years to expand the program to get more electric vehicles on the road.

“We’re working very hard with the United States to get them to understand that this proposed rebate on US-built electric vehicles is obviously not good for Canada, but it’s also not good for the United States,” Trudeau said Press conference.

“We proposed several solutions. One would be to align our incentives in Canada and the United States to ensure there are no slip-ups or unfair advantages to one side or the other. We’re happy to do that. »

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

The proposal amounts to a 34% tariff on electric vehicles assembled in Canada and violates the terms of the United States-Mexico-Canada Agreement or CUSMA, Ms.my Freeland and Ng — not to mention the affront he represents in a country that has been the United States’ partner in building cars and trucks for half a century.

“We want to make it clear that Canada will defend its national interests when there is no satisfactory solution to this problem, as we have done in the face of unjustified tariffs on steel and aluminum,” the letter reads.

The letter also promises an upcoming list of US products that Canada plans to target with tariffs both in the auto sector and beyond.

However, it appears that Canada’s lobbying efforts have had no impact on White House positions.

“The President has pushed for these tax credits because he wants to make buying electric vehicles more accessible for American citizens and because he believes it’s a great opportunity for manufacturers. Americans,” White House spokeswoman Jen replied Psaki, on Monday on the Canadian government’s letter.

Joe Biden and Justin Trudeau discussed this topic at length when the two men met in the Oval Office last month, Mr.me PSAKI before implying that not much has changed since then.

“We have a good working relationship with Canadians. We had a good conversation about this, but I don’t expect any new policies or changes in this regard,” she continued.

Senate Majority Leader Chuck Schumer wants to vote on the bill before Christmas, which has already been approved by the Democratic-controlled House of Representatives. Few see the timeline as realistic, especially after new economic data on Friday put inflation at 6.8%.

Vehicles built in Canada contain about 50% American content, according to M.’s lettermy Ng and Freeland with over 22 billion US auto parts imported by Canadian manufacturers each year.

“To be clear, we do not want to take the path of confrontation,” the letter said. “That was not the history of relations between our two countries – and that should not be the future. »

The letter also threatens to hit the pause button on some concessions Canada has already made to US dairy farmers under CUSMA, saying EV tax credits would represent “a significant shift in the balance of the concessions” made in the agreed under the Agreement.

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