Arizona makes for an unlikely ally in Canada’s fight against Biden’s EV tax credits

From its arid desert climate to its mercurial, centre-right politics, the southern border state of Arizona hardly seems to have much in common with Canada beyond winter-wary snowbirds.

But President Joe Biden’s controversial plan to use protectionist tax incentives to promote U.S.-made electric vehicles, which threatens misery for the Canadian auto sector, is making for all kinds of strange bedfellows.

With its proximity to both Silicon Valley and the U.S.-Mexico border, without the high taxes and regulation of tech-savvy neighbour California, the Grand Canyon State is striving to play host to the looming EV revolution — a vision endangered by Biden’s scheme.

“We’re going to be one of the next hubs in the United States for next-generation electric-vehicle manufacturing,” said Chris Camacho, president and CEO of the Greater Phoenix Economic Council.

“We just want, from a federal policy standpoint, a fair and balanced approach so that consumers can buy the products that they want. Whether they’re produced in states like Arizona or other states across the country, we think prudent policy to induce consumer behaviour should be done fairly.”

Arizona is far from the only state opposed to the measure, which if passed would allow would-be electric vehicle buyers to enjoy tax credits worth up to $12,500 provided their preferred car or truck was assembled in the U.S. and built with union labour.

But few have been more vocal critics. Last month, Phoenix chamber of commerce CEO Todd Sanders and Jaime Molera, Arizona director of a conservative environmental group called The Western Way, penned an opinion piece denouncing a “poorly drafted” scheme that would “hobble” the state’s EV ambitions.

Sanders, for his part, is taking little comfort in the fact that Biden’s Build Back Better bill, the $1.75-trillion climate and social spending package containing the tax credits, suffered a setback before Christmas when renegade Democrat Sen. Joe Manchin declared he would not support it.

“What you learn early on is nothing’s ever dead,” Sanders, himself a veteran of public-policy debates within government at the state-legislature level, said in an interview.

“If we can bring in Canada into this, obviously our friends from Mexico and then our congressional delegation, that starts to at least raise the concern that we have that this isn’t necessarily the right way to go.”

Along with up-and-coming EV players like Rivian, Nikola and ElectraMecchanica, Arizona is attracting parts and manufacturing service suppliers as well — including Jomi Engineering Group, based in Barrie, Ont., which by mid-year will have some 120 employees at its new facility in Casa Grande, just south of Phoenix.

Officials in Ottawa confirm that Arizona’s congressional delegation, and Sinema’s office in particular, continue to be a focus of the federal government’s lobbying efforts, which peaked late last year with D.C. visits by multiple emissaries, including Prime Minister Justin Trudeau.