Cdn. government says they will watch how Biden addresses the Inflation Reduction Act issues
Biden last week characterized one of the most important aspects of the law for Canada - content requirements for critical minerals that favour countries with a free trade agreement with the U.S.
Prime Minister Justin Trudeau said on Dec. 5 that Canada will be “watching closely” as the United States responds to complaints from Europe about the North American protectionism built into President Joe Biden’s signature climate change initiative.
Biden received an earful from French President Emmanuel Macron about “super aggressive” climate incentives in the Inflation Reduction Act — incentives that favour manufacturers in Canada and Mexico, as well as the U.S.
It wasn’t always that way. Biden’s original Build Back Better package included a tax credit scheme for electric vehicles that reserved the most generous incentives for U.S.-assembled EVs built with union labour.
That package fell apart, but its 11th-hour replacement — a kitchen-sink, pre-midterms effort framed as an inflation fighter — brought North American vehicles and critical minerals into the fold, thanks in part to concerted Canadian lobbying.
Now, Europe is complaining about the very aspects of the law that prompted sighs of relief from north of the border, and Biden has acknowledged “glitches” that he insisted last week were never meant to alienate allies.
“It’s something we’re watching closely and we’re engaged with our European counterparts, as well as our American counterparts, to make sure that we’re working together,” Trudeau told a news conference on Dec. 5.
He was with Ontario Premier Doug Ford in Ingersoll, Ont., to celebrate the launch of Canada’s first full-scale commercial EV plant, a GM Canada facility that’s on tap to build 50,000 electric delivery vans a year by 2025.
With Macron at his side, Biden last week characterized one of the most important aspects of the law for Canada — content requirements for critical minerals that favour countries with a free trade agreement with the U.S. — as an error.
“He didn’t mean, literally, ‘free trade agreement,'” Biden said, an apparent reference to Sen. Joe Manchin, the West Virginia swing-vote Democrat who successfully retooled the legislation with Senate Majority Leader Chuck Schumer.
“It was never intended, when I wrote the legislation, to exclude folks who were co-operating with us. That was not the intention.”
And yet that was exactly what happened with the original iteration of the bill, Biden’s doomed Build Back Better legislation, which triggered an all-hands effort from business leaders, provinces and Ottawa to convince the U.S. it would be shooting itself in the foot, economically speaking.
