Canada’s ambassador to the United States said the federal government should monitor US investment in electric vehicle manufacturing, but would not explain how it intends to compete with subsidies offered by the Energy Reduction Act. border.
Kirsten Hillman told Vassy Kapelos, host of CTV’s Question Period, in an interview aired Sunday that it’s important for Canada to remain competitive in the EV market, an area where it already has several advantages, including , expertise and essential mineral resources. She said experts are working to ensure Canada leads the way and encourage investment in the electric vehicle sector, but she didn’t specify how.
“I think we need to be aware of what’s going on here,” Hillman said in the interview from Washington, DC. “And we need to understand its implications for the Canadian economy.”
“Of course, responsible policymaking is about making sure we understand what the environment is for Canadians and Canadian investment, and about maximizing the benefits for us,” Hillman said.
But when pressed, the ambassador did not provide details on how Canada would counter the US Inflation Cut Act – passed in August 2022 and aimed at stifling inflation, reducing the deficit and investing nearly 400 billions of dollars in clean energy – which offers significant subsidies to electric vehicle battery makers.
“The Cutting Inflation Act and the investments it makes in green technology are important and are similar to the investments we have made, issues that we have focused on, in Canada for several years now,” Hillman said. .
“The government is committed to staying competitive,” he also said, adding that Canada made significant investments in the area of battery technology in particular last year. “So we’re doing very well in this space, but we can never be complacent.”
The ambassador is expected to travel to Mexico City this week to attend the North American Leaders Summit – the tenth annual trilateral meeting – despite violence in Mexico following the arrest of one of the sons of Joaquin “El. Chapo” Guzman, famous drug baron imprisoned .
Representatives from Canada, the United States and Mexico are expected to discuss climate change and the environment, among other topics. Electric vehicles will certainly be a topic of discussion.
Before the US Congress passed the Inflation Reduction Act in its current form last August, an earlier version targeted massive subsidies only for US-made electric vehicles and their parts, which worried Canadian manufacturers and could have wreak havoc on the Canadian auto industry.
But the legislation has been expanded to include vehicles built in Canada and Mexico, not just the United States, after nearly a year of lobbying from Ottawa and industry.
“It is important, along with our American friends, that we continue to emphasize that we are both most successful when we are committed to ensuring each other’s success,” Hillman said, adding of the inflation-reduction bill: “We have been success in doing so by including Canada in the electric vehicle tax subsidy and electric vehicle battery subsidy.
Meanwhile, Deputy Prime Minister and Finance Minister Chrystia Freeland — who also plans to attend the Mexico City meetings — told The Canadian Press in November 2022 that two new federal cleantech tax credits included in the economic statement the government’s fall are just “the down payment on the work ahead of us to meet the Inflation Reduction Act.”
Any more significant response or opposition to US legislation will have to wait until this spring, when Freeland presents the next federal budget.
“I think what’s important is not necessarily doing exactly what Americans do, they have their national environment and they have their own ways of attracting investment, their value proposition and we have ours,” Hillman said. “We’ve invested in this space for a long time and we have an ecosystem that is already healthy in this space, the US is less so.”
He added that the Canadian market will benefit from US growth in the EV market due to the nature of the business relationship between the two countries.
“So yes, [the U.S.] it’s a big country with a lot of money to invest and they’re doing it,” he said. “It’s a good thing for the environment.”
