Ultimate magazine theme for WordPress.

Let’s build North American automobiles and economics together

By Rachel McCormick
Consul General of Canada for New Mexico

As the Consul General of Canada in New Mexico, I have experienced firsthand the prosperity that comes from trade between the United States and Canada. Canada, for example, is the most important export market for hatch chillies. And look no further than the auto industry. Thanks to years of specialization and integration, our two countries are now global leaders in the manufacture of cars, trucks and other vehicles. And while we fight climate change together, the US and Canada are better positioned than almost any other country to become world leaders in the production of zero-emission vehicles.

Unfortunately, this future threatens to stall. As you may already know, there is a new electric vehicle (EV) tax credit proposed in the Build Back Better bill currently in the Senate. Canada supports the use of tax credits to usher in the adoption of electric vehicles to meet our shared climate goals. But what you may not know is that there are certain portions of that tax credit that put the US and Canada auto industries at risk and threaten to kill jobs in the US

Here is how.

Right now, Americans and Canadians are seamlessly building cars together. Companies on both sides of the border routinely sw – parts back and forth five or six times before a final vehicle rolls off the assembly line. And because that integration is so balanced, cars made in Canada already have, on average, about 50% US content. Canadian cars are US cars. Overall, the $ 100 billion in auto sales that the United States and Canada make each year help maintain 1.1 million high-paying jobs, many of which are unionized.

Unfortunately, there are elements in the tax credit that will thwart the economy of our common industry. With vehicles assembled in Canada not eligible for tax credit, jobs in the United States supported by orders from Canada are at risk. These orders will simply dry up as integrated supply chains are disrupted and uncertainty about cross-border trade takes hold. The changes in the economic framework that have made our automotive industry globally competitive for decades are putting jobs at risk at a time when we cannot afford to lose our global competitive advantage in electric vehicles.

Just like the USA, Canada has committed itself to an emission-free vehicle future here in North America. For this very reason, our heads of state and government agreed on a plan earlier this year to make our two countries world leaders in the production of EV batteries. After all, Canada is the only country in North America that has all of the critical minerals needed to manufacture batteries for use in electric vehicles. It only makes sense to continue to source metals and minerals like cobalt and nickel from Canada instead of overseas.

If Canada is excluded from the US electric vehicle market, Canadians will pressurize to respond. But the good news is that there is still time to find a solution. Congressmen, particularly in the Senate, are currently discussing the details of this electric vehicle tax credit. Let’s encourage them to come up with a solution that will keep the integrated Canada-US auto market so we can shift into high gear and win the electric vehicle race together.

Comments are closed.