Canadian Manufacturing

Cdn. finance minister says ‘mutually sabotaging competition’ may happen through corporate subsidies

The Canadian Press
   

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Freeland also delivered a quintessentially Canadian defence of free trade, provided it doesn't automatically send manufacturing jobs to the lowest international bidder or enrich corporations at the expense of workers.

Finance Minister Chrystia Freeland warned a U.S. audience on Apr. 12 about the potential dangers of a global subsidy “race to the bottom” as government largesse fuels the growth of the new green economy.

Freeland, in the U.S. capital for the annual meetings of the World Bank and the International Monetary Fund, framed the warning with effusive praise for its principal catalyst: the Biden administration’s Inflation Reduction Act.

The controversial new law, rich with more than $369 billion in climate spending, is a “historic and transformative” bill that will “change the world for the better,” Freeland said.

The importance of having the U.S. onside in the fight against climate change, just six years removed from former president Donald Trump’s decision to abandon the Paris accord, can’t be overstated, she added.

“It is good for the United States, it is good for Canada, and it is good for the world.”

But she acknowledged the dismay the U.S. approach to kick-starting a climate-friendly economy — “the most significant transformation since the Industrial Revolution,” she called it — has engendered in some parts of the world.

European leaders, most prominently French President Emmanuel Macron, say the bill gives North American manufacturers an unfair edge, as do other incentives that competing nations may feel obliged to match.

Freeland also delivered a quintessentially Canadian defence of free trade, provided it doesn’t automatically send manufacturing jobs to the lowest international bidder or enrich corporations at the expense of workers.

“Working people in Canada, in the United States, and in democracies around the world have long understood that they draw the short straw in competition with the voiceless proletariat on the factory floors of authoritarian economies,” she said.

“There is a reason the industrial heartland became the Rust Belt. We should do everything we can to level the playing field for our people.”

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