The Biden administration’s new proposal to include all North American-made electric vehicles in tax credits from the U.S. government has the Canadian auto industry heaving a sigh of relief.
“Effectively it would have made production of electric vehicles in Canada not viable, given 85 per cent of what we make in Canada goes to the U.S.,” says David Adams, president and CEO of the Global Automakers of Canada association.
“Now it’s time for the Canadian government to act—we’re not keeping pace with the U.S. on tax credits,” said Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, in an interview with Ward’s Auto.
Vic Fedeli, Ontario minister of economic development, job creation and trade, says, “We’re very pleased with the news that the rebate will be given to vehicles made in North America and not just the USA.” This will help sell EVs produced in Ontario, he says, adding that C$16 billion ($12.5 billion) of investment in EV manufacture and sourcing has been announced within the province in the past 20 months.
The expanded tax credit is very good news for Ontario’s parts sector, is made up of over about 700 businesses, and employs a large number of workers. The Canadian federal government also is responding positively: “This is good news for Canadian workers, jobs and our manufacturing industry,” says international trade minister Mary Ng.
“We have a totally integrated North American automotive market and that’s how we have created a highly competitive vehicle supply chain,” Kingston says. “That was the concern regarding country-specific purchasing incentives. You can’t disincentivize a highly efficient supply chain. That’s not the right approach.”