Building Back Better requires a Canada-U.S. approach to electric vehicles: Joe Comartin
DETROIT — While there have been many tragedies resulting from the COVID-19 pandemic, the past few years have reminded us in our professional and personal lives of the importance of friendships. As the consul general of Canada to Ohio, I witness every day that Ohio’s communities and families have no better friend than Canada, and Canadians value their relationship with the Buckeye State. The coming months will provide our two countries with an opportunity to do things “better” in that relationship. Unfortunately, instead of relying on our friendship, the United States is proposing to go it alone in the development of electric vehicles (EVs).
The U.S.-Canada auto supply chain has been intertwined since 1904 when Henry Ford opened a Canadian subsidiary in what is now Windsor, Ontario. Today, companies in Canada and Ohio routinely trade auto parts back and forth across the border five or six times before a final vehicle rolls off the assembly line. Canadian cars are U.S. cars no matter where they roll off the line. “Canadian-made” cars have, on average, about 50% U.S. content.
That is the case in Ohio: Pre-pandemic, Canada bought about $3.3 billion (in U.S. dollars) worth of auto parts from workers in the Buckeye State. U.S.-Canada automotive trade overall adds up to about $100 billion annually — helping to support 1.1 million well-paying U.S. jobs, many unionized.
The auto industry, of course, is changing. The United States and Canada are better-positioned than nearly any other countries to become the global leaders in zero-emission EV production. Building on our mutual advantages, President Joe Biden and Prime Minister Justin Trudeau agreed on a plan to make our two countries the global leaders in EV battery manufacturing. After all, Canada is the only country in the Western Hemisphere with all the critical minerals needed to make batteries for use in EVs. It only makes sense to continue to source metals and minerals like cobalt and nickel from your neighbor and friend Canada, instead of distant countries that may not always have the United States’ best interests in mind.
The Build Back Better bill pending in the U.S. Senate ignores the integrated nature of U.S.-Canada auto manufacturing and requires that EV tax incentives only apply to U.S.-assembled automobiles. These provisions will cost Ohioans. For example, since Canadian-assembled vehicles will not be eligible under the tax credit, the thousands of jobs in Ohio that are supported by orders from Canada will be at risk. Those orders will simply dry up as the integrated supply chains are disrupted and uncertainty around cross-border trade takes hold. This, unfortunately, will provide other countries around the world opportunity to step in and attempt to take the lead.
Canada provides EV tax credits but it does not restrict those credits to cars assembled only in Canada. If Canada is shut out of the U.S. EV market, there will be pressure from Canadians to respond. But the good news is that there is still time to find a solution.
Members of Congress, particularly in the Senate, are debating the details of this EV tax credit right now. Let us encourage them to find a solution that preserves the integrated Canada-U.S. automotive market so we can shift into high gear and, together, win the race on EVs.
Joe Comartin is consul general of Canada to Detroit, covering Ohio, Michigan, Indiana, and Kentucky.
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